Three three years after launching the first impact investment fund by an aid organisation in Australia, Save the Children’s second, larger fund is open to investment.
The organisation’s first fund was a proof of concept that raised $7.5 million at the height of the COVID-19 pandemic. The second fund, Fund II, is seeking to raise $25 million this year with a view to achieving both deep impact and commercial returns.
Save the Children Impact Investment Fund Director Paul Ronalds said Fund II offers socially minded investors the opportunity to earn competitive returns while achieving impactful change for children.
“Our previous successes and the sheer scope of the issues we are tackling means we are stepping up our financial target for Fund II, aiming for $25 million, with at least $10 million of that to be invested in Australia. Our impact-investing activities are novel and ambitious, but we know that by working with like-minded investors and social entrepreneurs we can achieve great outcomes for kids who need it the most”.
The fund intends to support founders and social enterprises that are impact first, technology-enabled, solutions-driven, innovative, and have a business model that can scale. Save the Children’s long-standing relationships with communities, governments and investment partners in Australia, Asia and the Pacific enable local solutions to local challenges and amplify positive impact for children.
Philanthropy and grants will always be critical to Save the Children achieving its mission, but large, alternative forms of funding are needed to close the funding gap to meet its Sustainable Development Goals. Here, impact investors represent a huge, largely untapped opportunity.
As Ronalds recently noted, a handful of other leading charities and some of the world’s most progressive philanthropic foundations are now adopting similar strategies of using blended finance mechanisms, guarantees and first loss capital to encourage private sector investment into initiatives that help achieve sustainable development goals.
While this investment remains a drop in the ocean compared to what is required to tackle the need in our world, it is an approach that offers hope of creating deep impact and providing Australian companies, social investors and philanthropists the chance to make a real social impact.