From an investor perspective, both via grants and impact investments in social enterprises that operate within our impact areas, there have been many affirming and light bulb moments.
A social enterprise is an organisation that is using business principles for a purpose. They may be not-for-profit, or a subsidiary of a not-for-profit, or they may be for profit provided the intention of the enterprise is to achieve a social or environmental impact within the community.
Depending on their legal structure and tax status, they may be funded by earned revenue, philanthropic grants, government grants and/or impact investments. Most aim to become fully sustainable through earned revenue using grant or investment injections at key times, such as start-up and scaling-up. Many social enterprises take time to become sustainable, and funders and Boards need to be patient supporters.
The theme of collaboration between social enterprises was strong at the Social Enterprise World Forum. This is not only collaboration to share ideas and learnings about funding, growing and scaling a social enterprise, which takes business skills and a focus on social impact, but also collaborating to win contracts from government to provide services. Auckland City Council, Scotland, Canada and our own Social Traders in Victoria provided a very practical session on how social enterprises are winning government business by forming consortia. Some contracts now weigh community benefit very highly, alongside cost, quality and capability.
I was honoured to be part of a panel session on impact investing with Big Society Capital (Cliff Prior), Impact Investment Exchange (Natasha Garcha) and Asian Venture Philanthropy Network (Patti Chu) facilitated by Dan Madhavan. I shared our own experience in impact investment (an investment that intentionally aims to achieve both a financial return and a social or environmental impact).
A highlight has been the affordable housing loan fund that we co-designed with Social Enterprise Finance Australia (SEFA), from which $1.4 million has now been drawn down by Habitat for Humanity to provide working capital for its affordable housing building program for families on low incomes. These families contribute 'sweat equity' to the build and receive 5 per cent off the purchase price.
In the sustainable food systems impact area, I also mentioned Yume, which is a technology platform linking unwanted food from producers and suppliers directly to school and hospital canteens and restaurants to save, so far, 22,000 kg food from going to waste. Also following the theme of collaboration, I noted that we had invested in this equity investment alongside three other philanthropic foundations. During this session, it was inspiring to hear about the contribution of the Australian Government to a relatively new international development women's fund established by the Impact Investment Exchange.
Other inspiration was found in the Employer of the Future session, including the fabulous achievements of social enterprises such as DC Kitchen, which employs hundreds of disadvantaged people at above award wages in sustainable and profitable social enterprises. A key goal is to reduce recidivism. Be Access was also a great local NZ example of taking a fresh look at the possibilities for employees with access issues through its new project, Be Lab. Little Yellow Bird is an ethical fashion manufacturer making a real impact on employment creation and sustainable supply chains.
It was a unique opportunity to learn from international and local experts. Lord Mayor's Charitable Foundation provided financial support to six social enterprises that are demonstrating strong outcomes to attend the World Forum. The leaders of these enterprises were very energised when we met to debrief each day. They have made new connections and gained knowledge to apply in their own enterprises. The six are: Good Cycles, Outer Urban Projects, SKY Design, Able Bakehouse, Earthworker and The Community Grocer.
The need to support the social enterprise ecosystem is important. There are many tools available including from Scotland who has been a leader in this field - see Readyforbusiness.org There is no need to reinvent the wheel!
Measuring both the financial return and the social return of social enterprises and impact investing is important. As Royston Braganza of Grameen Capital told us: 'You need both social and commercial indicators. You need both legs to build scale and go far and go fast!'
This is a sector building a track record with great further potential.