The Social Enterprise World Forum (SEWF) is coming to Australia later this month (Brisbane 28-29 Sept), and that’s in large part due to the advocacy and dogged hard-work of Luke Terry and the team at White Box Enterprises.
The story of how they wrangled the global event is a good one, but so is the story of hope and optimism about the nascent but growing social enterprise sector in Australia, and the exciting opportunity for Queensland to host a global event.
For impact investors, it’s an opportunity to both immerse themselves in the world of #socent, but also, to broaden their assumptions, and their investing models, when it comes to issues of impact-fist vs finance-first, and expectations of ‘market-rate-returns’ whatever that may mean.
With the event only weeks away, Luke Terry is a busy man, but he gave OnImpact some time to discuss his love for the sector, his hopes for the event, and the growth of social enterprise in Australia.
I’m Deep in Love with Social Enterprise
We can discuss wonky definitions of ‘sustainable enterprise’, and we can gripe about the missing middle for many great businesses that need funding to scale, but in the end, we just need to embrace the reality of this new breed of businesses that have purpose at their core, and which leverage success to grow that mission.
“I’m deep in love with social enterprise,.” Luke Terry says.
“I set up my first social enterprise as a young person in the early 2000s at a time when there were no social enterprise jobs in Australia. So I headed to the UK where I got a job with a big mental health nonprofit called Mind, where I got funded to build as many social enterprises as I could that would employ people who have lived experience of mental illness.”
Luke Terry founded White Box Enterprises in 2019, an intermediary that helps build and nurture social enterprises.
“I love this idea of a business where every dollar can go back to doing social good. And I think there is a tremendous opportunity to showcase how we can do more in that space.”
Luke doesn’t waste time talking about a definition of social enterprise, instead, he wants to get on with spreading awareness of the many social challenges facing Australia, and the market-mechanisms that already exist to help solve them.
“I don’t think there shouldn’t be any variance of that term. I think it gets people talking about what’s important to them in business. So I love that people ask; what is it? or, should it go left or right? I want more conversation and debate, as long as it means more social enterprise.” Luke says.
White Box ‘Accidentally’ Ended Up Hosting the SEWF
Australia hosted the second ever SEWF in 2009 in Melbourne. Since then it has been a struggle to get the hosting rights back on home soil. To win the right to host it would take lots of lobbying, and some serious hustle to get it funded.
But what’s most amazing is the sector’s persistence.
“People like Belinda Morrissey, from English Family Foundation, and Tom Allen from Impact Boom were really central to getting the event here to Brisbane.” Luke says.
“It has taken a real collaborative effort to get us where we are today. White Box stepped in to take on the co-host role after a previous funder pulled out.”
This is where the true commitment comes in.
“At the time, it was only nine months old, so we had to hustle. We went to an impact investor in Sydney, we initially asked for a $10,000 grant to hire someone, and make a plan. But Sam Benjamin, from Seventh Street Ventures, really came through. He lent us $100k to get started, backed by ticket sales, and we were off.” Luke says.
“We were able to get a whole bunch of other partners on board, and Westpac Foundation and Torrens University both came on board as lead partners.”
Multi-day conferences cost A LOT to host, and it requires a balance of sponsorship funding, as well as ticket sales. And while a regular conference may charge some $1600 to $1700 for a ticket, Luke knew his community wouldn’t be able to manage that.
“We wanted to make it really affordable, so we’re looking at tickets for social enterprises between $500 and $700 per ticket.” Luke says.
“Plus we had to raise about $1.1 million in sponsorship to make it possible. It was a huge effort.”
Integrating Impact Investors
SEWF is about purpose-led businesses, but it’s also a showcase of the entire eco-system in which they operate. That includes procurement professionals, corporates, philanthropic foundations, and impact investors.
For investors, there’s dedicated sessions that explore how they can better engage with businesses, and recognise the opportunities for a rich pipeline of deals.
“There’s a real opportunity here, and while we often hear impact investors say there is no pipeline. We also hear social enterprises saying there’s no pipeline of the right sort of investment dollars!” Luke says.
“I think what we’re seeing is that partners are realising there is a part of the ecosystem where people can have their cake and eat it too. There’s certainly a part of the ecosystem where there are some fantastic impact deals, and that there’s also the opportunity for people to get really good rates of return.”
Impact investing faces the perpetual issue of assessing both financial returns and social impact. Whether there is a trade-off between the two depends on each deal, but shifting the mindset away from it requiring concessions is key.
“I think in Australia at the moment, there’s some incredible impact deals on the table, but, they might just have a slightly lower yield.” Luke says. “But if we can spend the next few years really investing in those sorts of transactions, so that they can scale up, they can become viable, high-growth businesses.”
White Box PBO Bond
White Box Enterprises is a social enterprise that builds social enterprises. And as part of the SEWF event, Luke Terry and the team will be launching a pioneering Payments By Outcomes (PBO) trial.
“We’re going to be showcasing things like a new PBO trial, which will see jobs-focused social enterprises paid by the Australian Government for the jobs they create.” Luke says.
“This will be the third Payment By Outcomes trial to soon be launched under the Australian Government’s Social Impact Investing Initiatives, however, it’s the first involving social enterprises and impact investors.”
Impact-First
What does it cost to fund a mission? Or, a better question, what it will cost us if we don’t deal with the underlying issues they’re working to manage?
“For social enterprises, as there’s some simple barriers at the moment that are holding back our sector, from reaching their potential, and ultimately the social change that we could all very easily create.”
“Key to this is the right impact-first level of impact investment. And I hope we generate some really good conversations on this at the World Forum, asking; How can we create the right sort of finance for the social enterprise sector?”
One key practitioner and provocateur that will be in attendance is Seb Elsworth from Access Foundation in the UK.
“The story that they’ve been focussing on around impact investment for nonprofits and social enterprises is really incredible. I recommend checking-out the Access website, I get goosebumps every time I hang out with Seb.’ Luke says.