Philanthropy Australia and Impact Investing Australia today launched Impact Investment Ready, a new initiative designed to help nonprofits and for-purpose businesses explore impact investing opportunities through capacity building.
The initiative includes two grant programs: the Impact Investment Ready Growth Grant, managed by Impact Investing Australia, and the new Impact Investment Ready Discovery Grant, managed by Philanthropy Australia, which provides grants of up to $50,000 to help nonprofits become impact investment ready.
Philanthropy Australia CEO, Sarah Davies, says the Discovery Grants aim to kick-start the process of strengthening the capacity of the nonprofit sector to develop and implement impacting investing programs.
“It’s exciting to see the enthusiasm shown by our members for the Discovery Grants program,” Davies says, noting that Philanthropy Australia’s national impact investing workshop series in 2016 helped improve understanding about impact investing and its capacity to strengthen the nonprofit sector.
“The funds for the Discovery Grants were raised through a match-funding initiative in which NAB provided $250,000, and PA members raised the other $250,000, but actually, they exceeded it.”
Jodi Geddes, GM Corporate Responsibility at NAB says the bank’s support of the initiative is consistent with its long-term commitment to purpose-driven organisations and nonprofits.
“The Discovery Grants demonstrate our commitment, build on our market leadership and aim to unlock impact investment opportunities which will help nonprofits reach even more people with their valuable work in the future—and do so more efficiently,” Geddes says.
The Discovery Grant program received support from significant philanthropic funding partners including English Family Foundation, Rowley Trust, Snow Foundation, Vincent Fairfax Family Foundation, CAGES Foundation, Equity Trustees and Payce Foundation.
Gemma Salteri from CAGES Foundation, which has 20 per cent of its portfolio invested for impact, says not only will the Discovery Grants help build the impact investment sector in Australia, they will also provide “an important peer to peer learning environment where we will be able to learn from other investors and nonprofits.”
“The impact investment sector in Australia is still emerging and while we are seeing an increase in deal flow it is still challenging to structure smaller deals with nonprofits,” Salteri says.
“The Discovery Grants initiative will enable a wide range of nonprofits to build their internal capacity around accessing impact investment dollars to diversify their revenue streams, make them more sustainable and free up philanthropic grant money for the delivery of social services that do not have the same revenue generating avenues.
“It is important for investors wanting to access or structure impact investments with non-profits to recognise that not only are there typically high levels of transaction costs for the investor but there is also a significant cost to the non-profit wanting to participate in an impact investment deal. If a nonprofit has internal capacity to structure an impact investment these barriers will be reduced and we are likely to see more investment opportunities arise.”
The Discovery Grant program will distribute $500,000 to support the sustainability of the nonprofit sector and grow the investment pipeline—a key consideration for The Snow Foundation.
“The Snow Foundation chose to back the Discovery Grants because as a foundation we are keen to grow the social impact investment pipeline,” explains foundation CEO, Georgina Byron.
“There is such a large amount of capital sitting in corpuses with philanthropic foundations, and a number of foundations are interested in making investments rather than grants to nonprofits, yet few investments are being made,” Byron says.
“This is because most nonprofits do not have the expertise, or perhaps the skills, to structure and develop an impact investment proposal.
“My hope in the long-term is that this fund will ultimately enable more nonprofits to provide greater impact in their communities by expanding their funding income, enabling them to do more, and become less reliant on government.”
The second grant program of the Impact Investment Ready initiative is the Impact Investment Ready Growth Grant, managed by Impact Investing Australia. The Growth Grants provide impact businesses and mission-driven organisations with grants of up to $100,000 for business, financial, legal and other capacity building support from providers to secure investment.
For more information about Impact Investment Ready Grants, visit the website.