PLY: The prolific Emma Tomkinson makes more pertinent suggestions for Australia based on the UK experience in social investment… Interesting reading wherever you are in the world.
The Alternative Commission For Social Investment – Learning For Australia
Emma Tomkinson
Australia has a real opportunity to learn from the UK social investment market. We have an opportunity to learn from and replicate things that went well. We also have an opportunity to correct some of the things that didn’t go so well, rather than repeat the mistakes.
Particularly relevant lessons for Australia from the Alternative Social Investment Commission’s report are:
1. Minimise the hype: e.g. “Best available estimates are that the domestic market could reach A$32 billion in a decade (IMPACT-Australia 2013)”. This is not a forecast, but the most optimistic of goals. We can track the progress we do make, rather than set ourselves up for failure and disappointment. We can likewise cease talk of social investment filling the gap left by funding cuts unless there is any evidence that this has occurred.
2. Increase investor transparency: information on investments made will help organisations seeking finance navigate investors more efficiently. It will also help coordinate efforts and highlight gaps between investors.
3. Don’t just replicate the mainstream finance market for social investment: some mainstream finance models don’t transpose well to social investment – we can develop a social finance market that is fit-for-purpose and takes advantage of modern technology. There are lots of left-field suggestions in the report.
4. Understand the market we seek to serve: we can avoid some of the ‘us and them’ mentality that has arisen in the UK by seeking and listening to the voice of the investee in order to develop social investment that is useful to them.
5. Fill the gaps: similar to the UK, there is a funding gap for small, high-risk, unsecured investments. If this is the type of investment we are going to talk about all the time, let’s provide it.
6. Redefine social investors: social investors don’t have to be just rich people and financial institutions. In order to achieve the three points above, we should encourage and highlight social investments by social purpose organisations, individuals who are not ‘wholesale’ or ‘sophisticated’ investors and superannuation funds. Individual investment currently occurs in Australia through cooperatives, mutuals and small private investment. Crowd-sourced equity funding reform is being considered by the Australian Treasury and may reduce the regulatory burden and cost associated with making investments available to individuals who aren’t already rich.
This paper enables us to learn from the mistakes of the UK market. It should also encourage us to embrace our own failures and learn as we go. We can build an Australian social investment market that better meets the needs of social purpose organisations and the communities they serve.
There are actually lots of great ideas in the paper that I haven’t spent much time on – heaps of ideas for organisations and initiatives that could translate well here.
If you would like to read my analysis of how each of the 50 recommendations applies to the Australian context, please download this PDF table of recommendations.