Canberra cash splurge for social ventures

The Albanese government recently announced it would contribute the funding as part of the newly launched Social Enterprise Loan Fund (SELF).

The fund is the first in the nation specifically designed for social enterprises that provide employment pathways.

Canberra is partnering with investors and philanthropic organisations to make it easier for social enterprises that provide jobs for disadvantaged Australians to access capital.

The new fund will provide loans of up to $500,000 with a focus on lending that enables greater social impact and job creation.

The fund has already raised a total of $4.2 million from contributors including Westpac Foundation, the Macquarie Group Foundation, the English Family Foundation, the Ian and Shirley Norman Foundation and the Victorian Government.

The federal government said supporting social enterprises helped give more people a fair go at earning a decent living and providing for their loved ones.

Canberra acknowledged, however, that having access to the right capital at the right time has held back the growth of the social enterprise sector.

SELF was established by White Box Enterprises to provide capital for social enterprises, especially those providing employment opportunities for people facing barriers to work.

Mark Daniels, COO of White Box Enterprises, said the fund aimed to give social enterprises the financial tools they needed to succeed and make an impact.

“We’ve seen time and again how limited access to capital stifles growth in this sector,” he said.

“Social enterprises often struggle to secure the capital they need when they want it because philanthropy operates on a different timeline.

“The SELF intends to change that. If you are ready for investment, the SELF can get you the money you require when you need it.”

Daniels said the fund was designed to bridge the gap between traditional finance and philanthropic funding, offering access to capital that empowered social enterprises to grow sustainably and reduce reliance on grants.

A report released by social enterprise industry body Social Traders in November highlighted the economic and societal value of social enterprises and called for more federal government support for the sector.

Report on Identified Social Enterprises (RISE) was described as the largest and most comprehensive analysis of social enterprises in Australia.

The report found that the 5,795 social enterprises analysed in the study – nearly half of the nation’s estimated 12,000 social enterprises – contributed more than $16 billion to the Australian economy.

The report also revealed social enterprises spent $5.7 billion a year on delivering impact and created more than 89,000 jobs for people facing barriers to work.

Social Traders CEO Tara Anderson said it was fantastic to see the federal government recognise the value of social enterprises by supporting the new loan fund.

“Social Traders has been supporting the sector as a social enterprise industry body since 2008, and we know the importance of affordable and right-sized finance,” said Anderson.

“The sector is growing, with 80 per cent of certified social enterprises increasing revenue in the past financial year. This new fund fills a key gap which will further support the sector’s growth.”

Anderson's thoughts were echoed by Jessica Mendoza-Roth, founder and CEO of the Social Impact Hub.

“It is wonderful that the federal government is extending their support of social enterprises by investing in this loan fund, and congratulations to White Box on its launch after years of hard work.

"The Impact Investing Taskforce Expert Panel called for the establishment of a Foundation for Impact Investment (FII) to support social enterprises with appropriate capital, and hopefully this demonstration project can give government confidence to invest in larger initiatives with scale, like FII."

Mendoza-Roth said mainstream capital was not appropriate for many social enterprises, and it was important they had access to flexible, patient capital such as that provided by the new fund.

"Another example is our Catalysing Impact initiative with QBE Foundation, which is supporting social enterprises to raise other investment capital.”

The CEO of Social Ventures Australia, James Toomey, said it was good to see the Commonwealth committed to supporting development of the social sector with the additional injection of investment.

"We know that social enterprises are an important part of the landscape to drive positive social change.

"This contribution from the Commonwealth highlights the importance of partnerships between philanthropy and governments when building employment opportunities for marginalised communities."

Expressions of interest in SELF are now open.

More information

Making social impact great again

Social enterprises punch above their weight: report

New report identifies the scale of social impact challenge