Completing this survey may prove to be a solid investment

Posted on 18 Oct 2023

By Greg Thom, journalist, Institute of Community directors Australia

A first of its kind survey is designed to learn more about the for-purpose sectors attitude to responsible and impact investment.

There is increasing societal pressure on organisations to ensure the investments they make not only have a positive impact, but are ethical, sustainable, and responsible.

The charity and not-for-profit sector are no different.

That’s why the Community Council for Australia and Philanthropy Australia have joined forces to support a first of its kind survey designed to learn more about the for-purpose sectors attitude to responsible and impact investment.

The survey, which is open until November 20, is being conducted by investment advisors Koda Capital.

The goal is to produce a benchmarking report designed to highlight the opportunities for growth - and barriers to success – for purpose-led organisations when it comes to making the right decisions about how to invest.

Responsible investment is defined as one that considers people and society, governance, and the environment, along with financial performance when making and managing investments.

Impact investment is that made with the intention to generate positive, measurable social and environmental impact alongside a financial return.

Koda Capital partner and head of philanthropy and social capital David Knowles, said the company embarked on the survey to gain and share a deeper understanding of how for-purpose organisations think about the question of responsible investment.

“The key to progress lies in identifying the barriers and opportunities facing non-profit, charitable and philanthropic investors,” said Mr Knowles.

“By amplifying their voices, we can share valuable insights for the benefit of everyone involved in the process of allocating precious community assets.”

Koda Capital CEO Paul Heath said the survey and subsequent report are an acknowledgment that responsible investment is growing in popularity for mainstream investors and that it’s important that the financial services sector and the for-purpose sector develop a deeper understanding of responsible investment and feel equipped to respond. 

“Our work in the area of responsible investing and impact investing is driven by the belief that financial success can be achieved alongside social and environmental responsibility,” said Mr Heath.

“We want to help the decision-makers charged with the responsibility of investing on behalf of a non-profit, charitable or philanthropic foundation understand what this means for their organisation.” 

“Our work in the area of responsible investing and impact investing is driven by the belief that financial success can be achieved alongside social and environmental responsibility.”

Koda Capital CEO, Paul Heath.

While Koda Capital have already identified some trends around how for-purpose organisations approach this type of investing, there are still gaps that need to be filled.

For example, the company has found many not-for-profits, and charities tend to shy away from investing in controversial areas such as gambling, alcohol, tobacco, and adult entertainment, because doing so could undermine the work they do in the community and potentially upset their supporters.

Philanthropic foundations on the other hand, are generally more interested in impact investment, which is viewed as another tool for change, in addition to grant-making. 

These trends can’t be universally applied to all organisations however.

Mr Knowles said that to help not-for-profit, charity and philanthropic foundation investors get to grips with responsible investment, advisers like Koda need to obtain, better understand, and share data and insights with executives, committees, and boards. 

“It’s this mapping and sharing that will assist organisations working with for-purpose investors to better understand responsible investment considerations and make sure they’re clear about what responsible investing means in instances where they choose not to include it in their portfolios,” said Mr Knowles.

Social impact investing — For purpose organisations are increasingly turning to responsible and impact investment options.

For the financial advice and management industries, the data would provide a clearer view of barriers such as insufficient awareness, misconceptions about the effectiveness or profitability of responsible investment or lack of access to impact investment opportunities, and what can be done to address them.

The seven-minute survey is aimed at for-purpose trustees, CEOs, CFOs, board members and investment committee members.

In exchange for taking the time to complete the survey, Koda Capital will provide participants with:  

priority access to the report findings
an invitation to a launch event for the report

benchmarking data for their organisation or foundation against the findings

Koda Capital plan to repeat the survey in the future, to benchmark progress and measure changes in attitudes, intentions, and commitments from for-purpose organisations over time. 

“If responsible and impact investment is to flourish in Australia, we need to better understand where the barriers and growth opportunities are,” said Mr Knowles.

“We decided that the best way to do this was to survey the for-purpose sector in relation to those things and to learn more about how the sector currently invests.” 