The Significance of an Investment Readiness Fund in the Australian Market

At TDi, we have been advocating for an Investment Readiness Fund in Australia for many years. Through countless conversations with government, philanthropy and others in the social sector, there never quite seemed to be enough people who were willing and able to make this become a reality. In
 2014 that changed when our long term partner, NAB, stepped up to the plate and placed the first $1 million into a catalytic grant fund seeking to leverage small amounts of grant funding for targeted capacity building that would enable enterprises to take on investment.

Both NAB and TDi have experienced the lack of impact investment opportunities in the Australian market. In May 2013, we ran a forum regarding the need for an Australian version of the UK’s Investment and Contract Readiness Fund (ICRF). We continued to work both in partnership and individually around trying to strengthen investment opportunities by working with individual organisations in the social sector, to develop their capacity for investment, and strengthening the broader marketplace.

 

“Traditionally not-for-profit and charitable organisations have been able to rely on government and philanthropy for their funding… however, with the continuing decrease in available funds, another approach is desperately needed.

— Bessi Graham, CEO at TDi

 

Traditionally not-for-profit and charitable organisations have been able to rely on government and philanthropy for their funding, justifying their continuation by demonstrating the depth and increasing effects of the social problems they’re attempting to address, such as homelessness, environmental degradation, and poverty. However, with the continuing decrease in available government and philanthropic funds, another approach is desperately needed. Despite the very necessary services they provide, for many their continued existence is under threat. The increasing interest in impact investment from potential investors means that investment capital is a viable method of making these organisations sustainable, however most traditional not-for-profits and charities do not have business models that would allow them to take on investment.

The gap in the market that exists between organisations in need of funding and investors actively seeking impact investment opportunities is widely recognised. The Federal Government has previously attempted to address it through the establishment of the Social Enterprise Development and Investment Funds (SEDIF). But the last few years have shown more clearly than ever that we need to address the lack of capacity within organisations to meet the requirements of investment capital if initiatives such as SEDIF are to be successful.

We’ve had growing success in coming to agreement on what an Investable Social Enterprise (ISEs) needs to look like, and the interest from investors in engaging with these organisations is continuing to grow. In late 2014 NAB announced groundbreaking cornerstone funding to establish the NAB Impact Investment Readiness Fund. What will this fund do for the social marketplace? We envisage the introduction of this fund as the next step in helping unlock, not only the potential of SEDIF, but also the broader growing interest in the field of impact investment from a range of potential investors.

Our focus in co-designing this much-needed fund has been on making sure we create a fund that delivers solid outcomes that see significant leverage of any catalytic grant capital distributed. This fund is not solely focused on traditional not-for-profits or charitable organisations, but has instead intentionally chosen to allow a broad range of organisations to apply. We believe that a business with a social or environmental mission at the core of what it does can help solve some of society’s most complex problems, regardless of its legal structure. The fund recognises the challenges organisations in this field face when trying to simultaneously address their mission and a commercially viable business. We therefore seek to bring clarity to the parts of the business model that need assistance, and to provide necessary funding to cover those costs

]We look forward to other Funders, both government and philanthropic, contributing to the Fund and expanding its reach. We strongly believe Australia has the potential for a thriving impact investment sector, and the creation of the NAB Impact Investment Readiness Fund is a significant step towards realising this potential.

Spread the love

Meet Difference Maker, Ruth

Ruth has worked closely with us on several projects including the Laikim Sister program, as well as our ongoing work with bilum.

Holiday Recommendations – 21/22

Looking for some reading, listening or watching recommendations for the holiday season?Throughout the year, in our Newsletter, we have shared various recommendations for reading, listening and watching. We share some of these below that you might like to enjoy over...

Meet our WOW participants

We introduce you to some of the participants of the Women of the World program, due to begin in early 2022.

PNG Local Business Coach focus: Mari Ellingson

Empowering women in business is something we’re very passionate about. So when we get to build local capacity in our women-led business coaching program it’s even more exciting, as the potential impact is so much greater. Mari is one of our Local Business Coach...

Women of the World

Women of the World – a cohort business program offering economic independence and health literacy programs for migrant and refugee women.

PNG Local Business Coach focus: Mary Handen

We are excited to be partnering and building local capacity in our women-led business coaching program in PNG. Mary is one of our Local Business Coach (LBC) participants and we have loved working with her over these past few months. We caught up recently and want to...

Business and mindset coaching offers key to covid recovery for women-led businesses in PNG

TDi are working with PNG Women’s Business Resource Centre to recruit and coach a total of 100 women-led SMEs (or deliver 800 hours of coaching) over four rounds of coaching from May through to December, with an average of 200 hours of coaching per round. Alongside, 4 Local Business Coaches are being trained in TDi’s method to continue to support women-led SMEs in PNG. Here are the results for the first of the four rounds of coaching.

What 10 years and deep curiosity has taught us

Last year TDi celebrated 10 years, and over that time we’ve had the opportunity to travel with a number of organisations and often get a bird’s eye view of what’s going on. Recently, TDi’s CEO Anthea Smits, had the opportunity to reflect on what the past 10 years and deep curiosity has taught us. This article is a reflection on our top 6 learnings.

Meaningful Conversations about Reconciliation

This month’s Meaningful Conversation coincided with the start of National Reconciliation Week so we took the opportunity to explore the notion of reconciliation, and particularly this year’s theme which invites brave action.

Using the Business Model Canvas

When it comes to creating a new business, one question looms larger than all others: “Does this have potential?” The Business Model Canvas is a great starting point. This blog by TDi’s Isaac Jeffries describes how to fill out it out.