In 2009 the Monitor Institute released a report on catalysing the emerging social impact investment market. Their view was that “…impact investors want to move beyond “socially responsible investment,” which focuses primarily on avoiding investments in “harmful” companies or encouraging improved corporate practices related to the environment, social performance, or governance. Instead, they actively seek to place capital in businesses and funds that can provide solutions at a scale that purely philanthropic interventions usually cannot reach. This capital may be in a range of forms including equity, debt, working capital lines of credit, and loan guarantees.”^

In December 2010 the Commonwealth Government launched the $20M Social Enterprise Development and Investment Funds initiative (SEDIF). It was the Government’s stated intention to “catalyse” the emerging social impact investment market in Australia.

Three of the key premises of the initiative was that a “fund manager” be identified to prudently manage the investment funds, that the Government’s contribution be matched with private investment capital on a 1 to 1 basis and that the investment funds be economically sustainable into the future. The Government recognised that a key factor in ensuring success for the initiative was that it should be modelled on a commercial basis using an existing investment management framework and that it be scalable.

History will now record that the SEDIF initiative successfully introduced $32,000,000 into the social impact investment market, but it also achieved other things. The Monitor Institute report identified that to increase capital in the sector, there was a need to build efficient intermediation and enabling infrastructure for the industry.

The SEDIF initiative focussed on structure ensuring the investment capital was well managed and brought to the demand side in a stable and sustainable way. We believe the $6M investment commitment made by Christian Super in supporting SIA’s own Community Finance Fund is significant in validating the Commonwealth’s approach. Industry superannuation funds are subject to prudential regulation by the Australian Prudential Regulation Authority. They are responsible for managing the retirement savings of thousands of Australians and are held to account by long established fiduciary duties to their members. Their investment attitudes and actions consequently influence the views of other institutional and professional investors.

^ Jessica Freireich, Katherine Fulton, Investing for social and environmental impact: a design for catalysing an emerging industry, Monitor Institute, January 2009

28 October 2011

Foresters Community Finance was today named as an appointed fund manager for the Australian Government’s Social Enterprise Development and Investment Fund (SEDIF).

Officially launching the SEDIF program, Minister for Employment Participation, Kate Ellis, announced $6 million has been awarded to Foresters Community Finance with a further $6 million to be provided by Foresters’ investment partner Christian Super Fund.

Foresters will use the allocated funding to create financial products and capacity improving initiatives for social enterprises nationwide. This will be delivered through our Social Enterprise Solutions program.

CEO of Foresters Community Finance, Belinda Drew advised the organisation was excited to be a part of the SEDIF initiative.

“This program is an unprecedented initiative for Australia with significant scope for changing the social impact investment market.

“For those of us committed to aiding social enterprises and making them sustainable and investment attractive, this is a very exciting time.  The SEDIF program will undoubtedly be transformative, allowing social enterprises to access capital and business expertise at a greater scale than previously seen in Australia.”

Social Investment Australia, a wholly owned subsidiary of Foresters, will be the trustee of the two funds. Eligible social enterprises will be able to apply to either:

1. The Community Finance Fund - Social Enterprise (CFFSE), a $10.3m fund, which will provide a range of tailored financial products, such as mortgage loans and enterprise loans. These loans will be provided to established social enterprises to allow them to grow and scale their operations. Mortgage Loans assist Social Enterprises by providing loan finance secured by first mortgage over real estate.  Mortgage loans may assist in the acquisition of a Social Enterprise’s principal place of business or to secure a finance facility for the strategic growth of the social enterprise. Existing real estate may be offered as security for this purpose. Enterprise Loans are designed to provide flexible, structured finance to Social Enterprises segregated into two tiers ranging from high level structured finance (secured or unsecured) of between $25,000 and $250,000 or lower level flexible finance of less than $25,000.

1. The Social Enterprise Finance Fund (SEFF), a $1.2m fund, will provide similar loans as the CFFSE, but with a focus on incubating innovative and emerging social enterprises. The broader goal being to help social enterprises build their capacity to be able to meet the criteria of more mainstream financial products. In addition, the SEFF may invest in what is called “social equity” or quasi equity arrangements. Social equity investments are typically described as patient investments that put social returns ahead of financial returns. This kind of approach is a new offering to social enterprises in Australia.

Both the CFFSE and SEFF will assist eligible social enterprises with targeted business advice and support  during the application and assessment process to ensure the social enterprise’s ability to become financially sustainable over time.

The funds will require a social enterprise to demonstrate social value but will not limit applications to any one sector. The focus of social enterprises will be wide and varied and could include a focus on such social values as employment inclusion, affordable housing, cultural production, the environment and so on. In many instances a social enterprise may deliver more than one of these outcomes.

The funds will build a portfolio of investments ranging from the acquisition of a property from which a social enterprise will operate through to loans that support growth and increased social impact.

Proposals from social enterprises may come in many forms and may include:

• An independent social enterprise who wants to access finance for business growth but who would not meet the criteria of a mainstream financier.
• An enterprising not-for-profit looking to increase its social impact through a business proposal.
• Flexible finance to a lawn care social business employing people with a disability wanting to acquire new lawn mowers and garden equipment to expand their business.
• A secured property loan to help a social enterprise that assists parents returning to the workforce to purchase its place of business.
• Flexible finance that allows a centre for people with disabilities to purchase equipment to expand a hospitality social enterprise creating employment opportunities and increasing social inclusion.
• Tailored support and financing to purchase property on which traditional land owners can establish tourism or other enterprises and at the same time increase access to land and cultural and environmental management of country.

Social enterprises will be able to register their interest in applying to either the CFFSE or SEFF from 9^th August 2011 by contacting Foresters on (07) 3851 8000 or emailing This e-mail address is being protected from spambots. You need JavaScript enabled to view it with the subject line Register interest in CFF and SEFF.

Anyone interested in investing will be able to register their interest by contacting Valda Wheeler at Social Investment Australia on (07) 3851 8050 or by making an enquiry by clicking here.

09 August 2011

We are pleased to advise the Social Impact Property Fund No. 1 offer closed on 31 March 2011 and the Fund was established.