Australian social entrepreneurs have much to rejoice about, for help is (finally) on its way.
The School of Social Entrepreneurs (SSE) Australia has committed to raise $1.5million in the first five years of an initiative called Partnering for Scale and Impact (PSI) during its launch to the Australian business, financial and philanthropic community in Sydney today.
The social enterprise sector is very much in the early stage in Australia, and the initiative is designed to transform it. The PSI operates with many of the core principles of the well-known Silicon Valley business model that led to the success of Google and Instagram.
Giving fledging social entrepreneurs the right support
The initiative will help form and grow fledging and promising social enterprises. It aims to support their growth to become robust, self-sustaining and profitable entities by providing advisors, expert support, networks, and money around selected social enterprises.
SSE Australia Chair, Paul Bide, believes the social capital market for more developed social enterprises is better established than the market for earlier stage ventures, since foundations and philanthropic capital providers generally find it easier to donate money to more established, less risky ventures that are less likely to fail.
According to Bide, this leads to a structural gap in the social capital market where higher risk, earlier stage ventures cannot find philanthropic support. These ventures are too underdeveloped for the impact investing market and consequently, are starved of capital and face difficulties in getting their businesses off the ground.
“PSI seeks to provide capital to those social ventures so they can take off. We want to be able to grow that kind of venture so they are de-risked and in more easy reach of those that do not have a risk appetite for start-ups,” he added.
Getting the ball rolling on impact investment
In five years, the PSI initiative will invest at least $1.5million directly into relatively early and still developing social enterprises. The program will seek annual commitments totalling $100,000 from individuals or collectives over three years.
CIO of QBE, Garry Brader, was consulted during the development of the initiative and is passionate about the potential for impact investments to drive social change and at the same time, provide a quality, non-correlated asset class for his investment portfolio.
“I’d like to invest $100million into this asset class. The sector needs a viable pipeline of opportunities for this to happen,” he said.
SSE Australia CEO, Celia Hodson outlined that PSI is an extension of SSE Australia’s core mission to bring a community of support and knowledge to a social entrepreneur and their enterprise.
“There are too many silos in our community and we are driven by the belief that a community can solve its own problems when individuals and the business, government, social and community sectors are all connected.
“As the early stage sector continues to grow, so too does the need for investment and engagement. It needs new sources of capital,” she said.
Overwhelming support on the ground
Bide reveals that the initiative has gained an overwhelmingly positive response from like-minded social enterprise capacity builders.
“The support from the sector has been truly outstanding and demonstrates that collaboration is the key for delivering success.
“We will continue to partner with leading organisations throughout the course of the initiative and I am confident our collective track record and success as capacity builders of very early stage ventures will help mitigate risk and attract philanthropic capital from foundations, organisations and people that might not ordinarily invest their social capital in early stage ventures,” he commented.
Bright ideas that make the world a better place now have a better chance of shaking up the world.