In an Australian-first for an aid organisation, Save the Children has launched an impact investment fund, aimed at supporting enterprises that emphasise social innovation and address pressing social and humanitarian issues.
The Save the Children Australia Impact Investment Fund aims to raise at least $10 million in private capital in an initial offering.
Save the Children Australia CEO Paul Ronalds said the creation of the fund reflected the need for the sector to respond to a changed operating environment and find new sources of funds to scale up promising social innovation.
“Traditional approaches to aid are not, by themselves, enough to solve the world’s social and humanitarian problems. Unprecedented demand for our services, including from increasingly severe and frequent disasters, means we must find new sources of funding for social innovation. This includes finding ways to leverage private sector investment,” said Mr Ronalds.
“On the other hand, new technologies present huge opportunities to address social problems in new ways. Breakthroughs in edtech, fintech and ehealth offer the opportunity to deliver services more efficiently and effectively.”
The Impact Investment Fund is just one element of Save the Children’s forward-focused strategy to respond to exceptional change and volatility.
“Australian Government aid funding continues to decline and is now at an all-time-low. The proportion of Australians donating to charity is falling while there are more charities and not-for profit organisations in existence than ever before.
“While our traditional funding sources – government, public donations and philanthropy – remain integral, a change in mindset and approach is a must if we are to meet our ambitious goals for the advancement and protection of children’s rights and wellbeing.
“Disaster preparedness, mitigation and recovery are central in our work, increasingly so in the context of climate change-influenced disasters. We see firsthand the effects of climate change in the areas in which we operate, both in Australia and abroad.
“Our Impact Investment Fund aims to support enterprises that work to find ways to best position communities and the aid sector to address these and other significant social and humanitarian challenges.”
The fund, which is overseen by a newly established Board and supported by an Investment Committee, will be invested in enterprises with a strong business model, some revenue and a robust measurement approach to social impact, supporting vulnerable children and families.
It is intended for this to be the first of a number of impact investment funds set up by Save the Children members around the world.
A pipeline of potential investments is already being developed. These include a tech start-up developing a platform for electronic cash transfers during emergencies, an agency which specialises in child protection, training and certification and an innovative health organisation which aims to reduce child deaths from pneumonia in developing communities.
Further opportunities will be sourced using Save the Children’s extensive networks.