‘Funding Social Enterprises in Australia and narrowing the knowledge gap - Improving Social Impact Measurement and Social Impact Bonds’

Zoe attended the 2018 OECD Forum in Paris. She is currently studying a Bachelor of International and Global Studies at the University of Sydney Faculty of Arts and Social Sciences and in the near future will be working in Indonesia with the Empowering Indonesian Women for Poverty Reduction Program.

Overview

In order to foster prosperity and fight poverty through economic growth and financial stability, communities need to have confidence in markets and institutions. It is imperative to stress that this growth must be both sustainable and inclusive in order to recreate this sense of security. A relatively new and innovative solution are social enterprises. These are organisations that run like a business, although they have goals and values equal to those of a charity. Social enterprises generate creative solutions to complex social issues, and are, more often than not, driven by the local community. Community-driven change is imperative, and by empowering individuals and local communities to take initiative to create businesses it will lead to greater social reform and recreate confidence in the market.

Although they are a relatively new concept in Australia, the community is rapidly expanding. With this expected growth comes an increase in opportunity for the Australian government to utilize this innovation to achieve the most effective and sustainable social outcomes. Social impact bonds are also growing in popularity around the world, especially in countries where much of welfare is privatised for example the UK and US. There is an increasing body of research that is investigating effective ways of measuring social impact, however, they are not necessarily communicating with enterprises who need effective measurement strategies. Additionally, social impact bonds provide a way for the government to invest in solutions that have proven the intended social outcome. However, for these bonds to be the most effective there needs to be a thorough understanding of the appropriate uses of social impact measurement. 

To productively shape the future for social enterprises in Australia, this paper provides two specific policy recommendations. Firstly, to utilise the wealth of knowledge on social enterprises in Europe by connecting with them through a conference. This conference should focus on social impact measurement and should connect academics, government, and social entrepreneurs. And secondly, to expand the current piolet programs for social impact bonds to create more sustainable funding methods for social enterprises. In addition, with social impact bonds, the government is only paying for programs which have proven results. 

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