In a speech delivered at NSW Parliament House tonight Social Ventures Australia (SVA) CEO Michael Traill AM urged a rethink of the way the Australian community funds social change.
Watch the entire 2014 SVA Oration here: (42:44)
Calling the current system ‘inefficient and dysfunctional’, Mr Traill argued that investing in social change needs to look more like investing in the business world. Speaking to both government and philanthropic funders, he said that a failure to fund based on the outcomes achieved by particular social programs was at the heart of the dysfunction.
‘While capital allocation in the business world is not perfect, it generally flows based on common metrics of performance. Defining performance expectations in the social purpose world is much more challenging, but it’s critical if we are to make sure that we are funding the right programs.’
Speaking to philanthropists, Mr Traill challenged the mindset that only start-up organisations were worthy of funding, and the common approach of philanthropic funds only providing support for a time limited period, regardless of how effective the funded program or organisation is. He also challenged the reluctance of philanthropists to fund administration in organisations saying, ‘how many businesses would you invest in that have no depth around marketing, finance, strategy?’
Speaking to government, Mr Traill outlined their main challenges that result from government being the major funder of the social purpose sector; short-term political cycles and a focus on ‘quick wins’, alignment problems across the different levels of government, and obsession with process and the acquittal of paperwork.
Mr Traill also argued that the $1.8 trillion superannuation market could be a source of game changing funding for social purpose, and that emerging ‘impact investing’ products held great opportunity for greater and more efficient funding allocation for social services.
‘New impact investing products encourage new capital into the market and enable the government to effectively measure and pay for the outcomes achieved.
‘Despite a generation of economic growth and in many areas significant funding growth, we haven’t made much progress on the core moral and economic issue we face in this country; that many Australians live in a continuing cycle of exclusion and cannot participate fully in the community.
‘It’s time to think afresh about how to shift the current status quo, so that all Australians have real opportunity to reach their full potential.’
The arguments in the speech are expanded upon in an SVA Quarterly article entitled Investing in social change: building an efficient capital market for social purpose.
The Hon. Andrew Constance, NSW Treasurer and Minister for Industrial Relations welcomes guests to the 2014 SVA Oration: (7:42)
Jack Manning Bancroft, CEO and Founder, Australian Indigenous Mentoring Experience, introduces Michael Traill to deliver the 2014 SVA Oration: (3:26)
