Global Context; Local Solutions:Innovation & Investment Sandy Blackburn-WrightApril 2014

www.impactstrategist.comsandy@impactstrategist.com

Global Issues are Driving Change

Our Future World: Global megatrends that will change the way we live, CSIRO, 2012; Australia to 2050, third Australian intergenerational report, Australian Treasury, January, 2010 et al

Australia

Ageing and growing population

Escalating demand for services

Economy in transition with reduced tax base

Environment vulnerable to climate

change

Growing gaps between sub-groups and communities

Need to boost productivity and

innovation

Funding for Services Faces Challenges

Source: Accenture & Oxford Economicshttp://www.accenture.com/au-en/company/newsroom-australia/Pages/future-demand-public-service.aspx

❏By 2025, public service expenditure is forecast to be US$419bn, or 24% of GDP

❏Projected demand on current trajectory is an additional $54 billion per annum in 2025 (or 3% of GDP

❏Ageing population and healthcare are main drivers

Payment by Outcomes and Social Impact Investment

Initiatives being lead by State

Governments, particularly

Queensland, ACT and NSW

❏Focus on outcomes-based contracting arrangements

❏Risk adjusted return to providers of services❏Co-definition of the desired outcomes and

social innovation to produce service delivery models

❏Focus on prevention and cost savings over time

❏Requires open data arrangements and detailed measurement

❏May require capital raising and risk sharing structures

Traditional investment vehicles + diversification

Calvert Foundation – community investment notes

GS Social Impact Fund

New Instruments - eg Social Impact Bonds

There is Growing Global Momentum

Source: www.businessweek.com, 6 June 2013See also https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/225547/G8_Social_Impact_Investment_Forum_-_Outputs_and_Agreed_Actions.pdf

Global Institutions Driving Change

International Impact Investing Taskforce

Potential Size of the Market over 10 years

❏ Impact Australia Report, 2013

❏ Impact Investments: Perspectives for Australian Superannuation Funds

❏ Impact Investments: Perspectives for Australia Charitable Trusts and Foundations

New Reports to Support Investment

Available to download on www.impactinvestingaustralia.com

Role of Philanthropist and Foundations

❏ Making grants as a Social Venture Capital❏ Reducing risk for hesitant mainstream

investors through leveraging grants❏ Funding the establishment of a social risk

rating framework to stimulate institutional investment

❏ Funding intermediation and investment readiness activities

❏ Unlocking corpus to impact investing

Primary Catalyst

Role