Social Impact Investing
Since 2017-18, $52.7 million has been committed to grow the Social Impact Investing (SII) market in Australia, and create innovative solutions to entrenched social issues.
SII is an outcomes-based investment approach that brings together governments, service providers, investors, and communities to challenge social policy issues.
The SII Program aims to inform the Government approach to growing the SII market through:
- Two trials aiming to test the effectiveness of different financial models to address social disadvantage:
- State and Territory Partnership Trials: social impact investments with state governments to support vulnerable groups.
- Payment by Outcomes Trials: establish and test three outcome-focused funding arrangements. Testing Government capacity, and paying on achievement of outcomes in employment and child development.
- Two capability building trials aiming to build understanding of how the Government can support and strengthen the SII sector:
- Sector Readiness Fund: providing grants to established social enterprises for services to enable them to attract investment.
- Outcomes Measurement Initiative: to identify the outcomes measurement needs of the sector. Building the outcome measurement capability of for-purpose organisations, to attract investment.
Targeting Entrenched Disadvantage
The $199.8 million Targeting Entrenched Disadvantage package was announced in the 2024-23 Budget. This package includes two SII measures:
- A new $100 million Outcomes Fund to:
- develop partnerships with the for-purpose organisations, state, territory and federal governments.
- deliver agreed measurable outcomes tailored to the needs of specific groups.
The Government will collaborate with the sector in 2023-24 to co-design Outcomes fund.
- $11.6 million of funding for the Social Enterprise Development Initiative (SEDI) to provide:
- capability building grants to eligible social enterprises
- online education and mentoring to the broader SII ecosystem.
The SEDI aims to support social enterprises delivering services to disadvantaged Australians, to build capability, grow their business and support improved social outcomes.
Learn more about SEDI.
Australian Government Principles for Social Impact Investing
These initiatives are established in line with Australian Government Principles for Social Impact Investing, which were developed in consultation with the SII sector. Where the Australian Government is involved in social impact investments, agencies must take into account the following Principles:
- the Government's role as an enabler and developer of the market
- value for money co-design with stakeholders
- fair sharing of risk and return
- robust outcomes-based measurement and evaluation, and
- outcomes that align with Australian Government policy priorities.
For further information on these principles and how they were developed, visit The Treasury at Social Impact Investing.
Evaluation of the SII Initiatives
The SII Evaluation seeks to answer questions about:
- the Government’s role in building the SII market
- the effectiveness of outcome-based financial models; and
- how to better address entrenched social disadvantage.
The Evaluation will also look at how the SII initiatives:
- Have contributed to the broader SII market
- Have changed the social sector
- Have supported government reforms
- Could help the Government address significant social disadvantage, and
- Could define the Government's role in the SII market to:
- deliver social outcomes better
- strengthen social enterprises; and
- attract private investment