Social enterprises funds are being urged to apply to a $20 million federal government scheme that aims to drive innovation and development in the sector.
In July 2010, the Government announced it would provide a $20 million cornerstone investment to seed the establishment of at least two Social Enterprise Development and Investment Funds. Applications to take part in the fund close next week.
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Social enterprises are classed as organisations which apply market-based strategies to achieve a social purpose, including non-profit organisations that use business models to pursue their mission and for-profit organisations whose primary objectives are social.
The funds will be used to leverage matched funding from the private and philanthropic sectors to enable new systems, achieve greater impact and generate innovation in service delivery to support highly disadvantaged Australians.
According to a spokesperson for the Department of Education, Employment and Workplace Relations, there is an emerging market for capital and investments that generate social and environmental value in addition to financial return.
“Advocates and practitioners of this approach highlight the potential to achieve a cultural and practical shift from traditional grant-making and government funding towards approaches that can improve access to capital… and have potential to mobilise significant additional investment in a more sustainable way,” she says.
The spokesperson says the government is funding the SEDIF as an early catalyst in this developing market.
“This is intended to address the lack of access to capital for such enterprises to develop and scale their businesses beyond early stages,” she says.
“The Australian government is seeking to leverage its investment in social enterprises through fund managers securing additional investment from other sources on at least a 1:1 basis and attracting investment over time to build and sustain the funds for the medium- and longer-term.”
“To meet the eligibility requirements, applications must provide evidence of at least indicative commitments for the initial leverage of at least 1:1 on the Australian government’s investment and evidence that such funding can be secured and payment made prior to, or at the same time as the funding, which will be no later than June 30,” she says.
Applicants must demonstrate they have a vision which is in line with the objectives of the SEDIF, and prove they have the capabilities, experience and resources to realise that vision, meet the objectives and operate the SEDIF successfully.
Applicants must address the following criterion:
1. Vision, strategy and objectives
Set out the vision for the fund, the proposed strategy to achieve it, and how this is intended to achieve the objectives for the SEDIF.
2. Investment strategy and portfolio management
Provide an overview of the investment strategy, and proposed approach to achieving social and economic impact sought, contextualised for the social enterprise sector in Australia, and the objectives for the SEDIF.
3. Investment, financial model, risk and governance
Provide an overview of the proposed scale of the fund, investment model, and risk management and governance for the fund.
4. Performance, impact and investor relations
Provide an overview of the proposed approach to measuring and demonstrating impact, performance management and reporting, and other aspects of investor relations.