Impact Investing Australia’s report, Paving Pathways: A Review of the Impact Investment Ready Growth Grant, launched today and outlines how $1.4m in grant funding has generated a median grant leverage of 23 times the capital, with a total expected capital raise of $73m.

Established in March 2015, the Impact Investment Ready Growth Grant (the Growth Grant) is an initiative that holistically addresses market gaps for impact-driven businesses to raise the investment required to scale and grow. It provides grants of up to $100,000 for the business, financial, legal or other capacity building support required for social enterprises to raise capital. 

The report outlines the success of the Growth Grant which has deployed over $1.4m in grant funding, and supported 22 mission-driven organisations, eleven of which have already successfully raised a cumulative $40m in debt and equity.

Sally McCutchan, CEO of Impact Investing Australia, commented “The findings from the Review highlight the important role the Growth Grant has played in developing the market for investments in mission-driven organisation. The comparatively small amount of Growth Grant funding has had a catalytic effect in enabling businesses to raise capital and build and sustain organisational capabilities.”  

“A real highlight of the program is the degree of sector support and collaboration that has underpinned its success”, Ms McCutchan continued. 

The report shares key design elements of the Growth Grant that have driven its success. They include, among others, specific eligibility criteria for applicants, a highly experienced and diverse panel, incentivisation through staggered payments and openness to program adaptation and flexibility.

The review highlights that while the ecosystem supporting mission-driven organisations has come a long way since the Growth Grant was launched, there are still significant gaps that need to be addressed. These include gaps in: earlier stage funding for social enterprises; support for contract readiness; and the number and reach of high quality providers. An understanding of what constitutes investment readiness also continues to be a challenge for many social enterprises. The report suggests that there is an important role that governments, trusts and foundations can play in bringing further support and growth to the social enterprise sector.

For Jennifer Ziegner, Program and Business Development Manager of the Growth Grant, while data and learnings are important, there is nothing like a story to bring the impact of the Growth Grant to life.  She notes “We are excited to share the stories and hands-on experiences of our grantees, their providers and their investors with the market. They are extraordinary individuals who are driven to make a positive impact through their organisations and pave the way forward to a better world”.