Indigenous-owned social start-ups set to flourish via new fund
Friday, January 11, 2013/
Government-backed organisation Indigenous Business Australia is looking for an organisation to establish and manage a new source of funding for indigenous social enterprise start-ups.
IBA, a commercially-focused organisation, promotes and encourages self-management, self-sufficiency and economic independence for Aboriginal and Torres Strait Islander people.
IBA has put out a request for tender for the management of a social enterprise capital fund, made possible by the government through its Social Enterprise Development and Investment Fund.
IBA is establishing this fund to supply, or facilitate access to, capital to eligible indigenous-owned social enterprises for the purpose of establishment or planned growth.
The fund will be established with an initial seed funding of $1 million.
Tom Jenkins, IBA senior manager of sustainability and community engagement, says there is a gap in the market, particularly for start-ups or those looking to grow.
“They don’t have the financial [capacity] or the internal expertise or capacity to take on some debt to enhance their opportunities,” Jenkins told StartupSmart.
“What we’re looking to do with this fund is fill that pipeline. It’s going to be a very small pipeline because it’s a pretty small fund.”
According to the request for tender documentation, IBA sees social enterprise as an “important pathway into the broader economy” for some indigenous organisations.
“IBA has explored ways in which it can participate in the social enterprise sector,” it said.
“IBA proposes to establish a fund to offer emerging indigenous social enterprises access to grants or patient [long-term] capital aimed at providing the financial base from which such organisations can successfully engage with the SEDIF or similar financing options.
“The fund is seen to be a ‘pipeline’ program with the express aim of providing indigenous social enterprises with the ability to seek further assistance from established programs.
“It does not aim to replace these programs. Similarly, the funding provided by the fund is not proposed to be the sole source of financing for indigenous social enterprises.”
The fund will be open to social enterprises that meet the following criteria:
- It must be indigenous-owned – that is, an organisation of which at least 50% of beneficial interests are owned or held on behalf of Aboriginal or Torres Strait Islander people.
- It must be a non-profit organisation established for the purpose of facilitating economic self-management or self-sufficiency for Aboriginal or Torres Strait Islander people.
- It must be an emerging enterprise – that is, it must either be a start-up or within its first three years of operation.
- The board and management of the organisation must collectively have the qualifications, skills, experience and reputational standing to manage the proposed business.
- It must not operate in a prohibited business, such as the sale of takeaway alcohol, or involve co-investors or other parties whom do not meet IBA’s expectations as to ethics, reputation or standing.
The successful proponent will be required to establish and manage the fund, but all tasks will be undertaken in consultation and collaboration with IBA.
Submissions are due by January 25, and funds are expected to be available from June 2013. Tenders from Aboriginal and Torres Strait Islander people and organisations are welcomed.