Philanthropic foundations form impact investing fund to make “meaningful change”

Several philanthropic foundations, including the Paul Ramsay Foundation, have formed an alliance focused on impact investing called the Foundation Impact Investors Group (FIIG).

The rest of the foundations involved are Minderoo Foundation, the Macquarie Group Foundation, the Westpac Foundation, UBS Optimus Foundation Australia, Hand Heart Pocket, Lord Mayor’s Charitable Foundation, the English Family Foundation and the Snow Foundation.

Impact investing is investments made not only to make a profit but with an element of social good or an environmental impact.

FIIG will look to help foundations share practices on impact investing, as well as streamline the process for social enterprises and other for-purpose organisations looking for investments.

The group will be chaired by Ben Smith, the Paul Ramsay Foundation’s head of impact investing.

“By working in partnership, foundations can reduce the barriers to impact investing, including transaction costs,” Smith said.

“For-purpose organisations will have a more accessible route to philanthropic capital through events in which they can present to the FIIG and receive feedback.

“Group members can then independently pursue the investment opportunities while sharing the resource of due diligence and learning from each other.”

PM&C secretary Glyn Davis’s prior job to taking on his current role was as CEO of the Paul Ramsay Foundation.

The announcement comes after the May federal budget established a $100 million fund over five years for social impact investment called the Outcomes Fund, available for social enterprise.

Additionally, an $11.6 million Social Enterprise Development was set up to provide grants, online education and mentoring.

When making the budget announcement, treasurer Jim Chalmers said there was a “strong appetite” for philanthropic organisations to partner with the government.

“A national approach on its own will never be enough if we’re serious about addressing entrenched, community disadvantage,” Chalmers said at the time.

“To make a meaningful change, we need to work together with state and local governments along with the philanthropic and business communities.”

On the establishment of FIIG, Impact Investing Australia CEO David Hetherington said Australia could do “much more to unlock finance as a tool for good”.

“This is a great initiative to help us catch up with countries that are sprinting ahead in driving change through impact investing,” Hetherington said.

FIIG is modelled after the Social Impact Investors Group in the UK and the Mission Investors Exchange in the United States.

The group is open to other foundations to join.

This article was first published by The Mandarin.