Creating change is the fundamental driver behind many mission-driven enterprises. And change delivered at scale can result in transformational benefits for society. In Australia, there are thousands of social enterprises or mission driven businesses trying to deliver the social or environmental benefits society clearly needs.
But despite the growing pool of enterprises seeking to create change, few have the capacity to deliver it at scale. Many enterprises reach a plateau because they can’t find the right advice, support and funding needed to take them, and their impact to the next level. On the other hand there is no shortage of investors actively seeking impact investment opportunities.
To help rectify this issue and bridge the gap between investors and mission-driven businesses, Impact Investing Australia and NAB partnered to create the Impact Investment Readiness Fund, with NAB providing an initial $1 million for investment readiness support. The Fund provides targeted advice and support to help enterprises secure investment for scaling up their social or environmental impact, and is a response to a specific recommendation made in Delivering on Impact, the Australian Advisory Board on Impact Investing’s strategy to catalyse the impact investment market in Australia.
The Fund offers grants of up to $100,000 for not-for-profit organisations and social enterprises to receive specialised capacity building support from providers such as advisory, financial, intermediary or legal services. The need for the Fund has been quickly demonstrated by a large number of enterprises applying for a grant. Since its establishment in March 2015, the Fund has made five grants, with two organisations already going on to secure an impact investment following the grant.
Successful grant recipients include:
- Maths Pathway (pictured) combines world class teacher training and support with an online learning platform that aims to address a decline in the maths competencies of school students by transforming the way the subject is taught in the classrooms. They received a grant to help pay for an advisor to attract investors for an investment capital raise of $700,000. They have been successful in raising $800,000 to date.
- HireUp is an online platform which enables people with disability, and their families to directly find, engage, manage and pay for their support workers, and in doing so, become the empowered managers of their own lives. They received a grant for an investment capital raise of $2,000,000 to help with advisory services association with the process of raising capital which they achieved in late 2015.
- Ethical Properties Australia is a company that brings together organisations wanting to co-locate, and then raises impact investment to purchase and refurbish properties, carry out the pre-purchase due diligence and any capital works required, and provides asset management and property management services. They received a grant for strategic advice, developing the business model, incubation and systems development for an investment capital raise of $2,000,000.
- Ashoil is an Indigenously owned manufacturer of an environmentally friendly fuel, biodiesel and fuel logistics/transport organisation. They received a grant for costs relating to negotiating a fuel supply contract that would enable the business to significantly increase its scale and attractiveness to investors, for a capital raise of $750,000.
- Sydney Renewable Power Company is an enterprise established to enable Sydney residents to invest directly in renewable energy projects located within their community. They received a grant to assist in the design, implementation and administration of a public share issue and the processes associated with that for an investment capital raise of $1,400,000.
With the Fund’s aim to continue to support more impact investment deals to occur, we are looking to grow the fund to $10-20 million. Investors, philanthropists and businesses that want to play a catalytic role in helping social enterprises and mission-driven businesses thrive and scale are invited to contribute to the fund.
With the market for impact investing estimated to reach $32 billion domestically and $1 trillion globally over the next decade, the fund is a critical pillar in growing the opportunities for impact investing and delivering social and environmental change at scale.