Charities Community Organisations Governance Fundraising Funding Associations Finance Events

Social change funding should mirror corporate world

Sarah Harding September 18, 2014

2 min read

Calling the current system ‘inefficient and dysfunctional,’ 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,” says Traill.

Speaking to philanthropists, Traill challenged the mindset that only start-up organisations were worthy of funding, and the common approach of philanthropic funds providing support for a limited time regardless of how effectiveness of the program. He also challenged the reluctance of philanthropists to fund administration in organisations arguing that they probably wouldn’t invest in corporate enterprises that have no depth around marketing, finance, or strategy.

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,” says Traill.

“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.”