August 3, 2017
Lord Mayor’s Charitable Foundation (LMCF) CEO Catherine Brown shares her passion for supporting social enterprise to address key social issues and her views on philanthropy’s role to support social enterprise into the future.
- Tell us a bit about your background working in philanthropy and with LMCF.
It has been a great opportunity for me to lead the Lord Mayor’s Charitable Foundation since 2011. When I was approached about the role, I could see that my previous experience working with foundations, especially community foundations, all around Australia together with my roles in not for profit organisations before that and my governance experience could all be useful.
In the past, I was especially inspired by attending the Global Community Foundation in Berlin in 2003, where I was a speaker, and also the work I did with the Sidney Myer Fund advising on the establishment of the Foundation for Rural and Regional Renewal. I began to see the full potential of community philanthropy as an agent of positive change, a capacity builder and an investor in emerging ideas and innovation. The idea of bringing people, knowledge and resources together to tackle current community challenges is the core of community philanthropy. That is what I have tried to realise at the Lord Mayor’s Charitable Foundation.
- You’ve been involved in supporting a number of social enterprise projects, is social enterprise a personal passion of yours?
I have been interested in social enterprise since I went to work with the MS Society as an in-house lawyer many years ago. I thought I was leaving Mallesons to work in human rights and government relations but actually I was also advising three social enterprises– an attendant care agency (which still exists), a telemarketing business and a mail house.
I could see the potential for social enterprises to help achieve a charity’s mission and also grow another revenue stream. The most successful social enterprise at the time was the one closest to the MS Society’s core business of supporting the independence of people with MS.
- How did LMCF first become involved in working with social enterprises?
Our first project was with Youthworx in 2009. YouthWorx was first funded before I arrived at the Foundation and is a great example of a social enterprise that provides training and employment (in the film industry) for young people facing various forms of disadvantage. Not only have we funded them at different stages of their development but we also use their services quite regularly.
- Was it a deliberate strategy for LMCF to build relationships with social enterprises?
Yes. We added social enterprise into our grants guidelines for capacity building funding quite soon after my arrival. I try to stay up to date with developments and am particularly interested in understanding the key points when philanthropy can really make a difference to the life of a social enterprise. The first is obviously developing and testing an idea. We support Social Trader’s Crunch as part of this. The next step is business planning – also assisted by the ST Crunch program. Start-up is a big role for philanthropy and then scaling up down the track.
Building a social enterprise is a journey and sometimes a foundation has to stay involved for many years until the social enterprise is sustainable. This is not usually recurrent funding but often funding for a few years at start up and then injections of funding at key moments.
- What are some recent examples of LMCF investing in a social enterprise to support them to create impact?
I am most proud of these social enterprise grants:
- The investment in HomeGround Real Estate Agency when it was just getting started.
- The support for financial modelling expertise for the Women’s Property Initiative.
- The scaling up grant for Fitted for Work’s social enterprise – after PWC had done some excellent business planning work with them.
- The start-up support of the Australian Centre for Rural Entrepreneurship through an Innovation grant and our recent follow on proactive grant to help them buy a building (and have some funds to expand the program at the next stage).
- Innovation grant to Outer Urban Projects, which is working with young musicians in the outer north of Melbourne.
- The following on grant for 2 and 5 in Norlane.
- YouthWorx follow on grant.
We also have funded the wonderful social entrepreneurs Good Cycles, Social Studio, Scarf, STREAT, Homie Street Store and others. We are proud of them all.
- Investing in social enterprise can be a bit different to traditional grant-making, are there any risks or challenges you’ve had to overcome?
We have made impact investments in two for profit social enterprises, Hire Up and Yume. Both use technology platforms to achieve a social purpose. Hire Up is enabling people with disabilities to choose and manage their own carers. Yume is connecting excess food, for example, ‘ugly fruit and vegetable’ that don’t meet supermarket standards but still taste the same and have the same nutritional value, or providers who have orders cancelled, with people who can use it (school and hospital canteens, restaurants). Yume is also providing food at risk of going to waste to food charities.
Impact investment is different from granting. These decisions are made by the Investment Committee and the Foundation looks at the potential social and/or environmental outcomes and impact as well as the forecast financial return. We have 2.5% allocated to impact investment within the strategic asset allocation – one day I hope it is more! However, from a corpus of $240 million, we can still make a difference with the current allocation.
- LMCF has also branched out into impact investment with the Affordable Housing Loan Fund, how did that come about?
I have been interested in impact investment for a long time. Even when I worked at Wesley Mission in the 1990s we were thinking about housing for disadvantaged people and growing income streams. We took some time to learn about impact investing. I was fortunate to be mentored by Peter Hero, the former CEO of the Silicon Valley Community Foundation (who sadly passed away last year) and he opened my eyes to the potential of impact investing. Peter Hero, Richard Fahey and Dipender Saluja – all connected with the Skoll Foundation – gave our Inspiring Philanthropy oration and panel a few years ago. They showed the Foundation and our philanthropy colleagues what was possible. I was also fortunate to be invited to the Skoll World Forum where I met many other people working in this space.
We initiated the Affordable Housing Loan Fund as a way of moving more capital to help solve the problem of increasing the supply of affordable housing. We met with a number of potential social finance partners and chose SEFA (Social Enterprise Finance Australia). The Loan Fund was ‘co-designed’ with Ben Gales, SEFA’s former CEO. Habitat for Humanity has drawn down $1.4 million and I am very proud of what they are achieving building homes with families facing financial disadvantage who contribute sweat equity to their own home.
I am very pleased to be working with SEFA and a fantastic Advisory Committee on the Affordable Housing Challenge. We are working through the site selection process at the moment and will have more to say when we are ready to invite proposal from partnerships between not for profits or community housing associations or other not for profits with commercial developers or builders.
- Why do you think it’s important for philanthropic organisations to look at new and innovative approaches to funding?
Two main reasons:
If we want to make the most impact on the community challenges that we are addressing, we need to encourage innovative solutions. We need to find ways to maximise fresh thinking and provide the resources to support leaders within the not for profit sector.
The world around us is changing fast. We are in a time of disruption on many fronts – digital, technology, climate change mitigation and adaption, population movements, and more. Every sector is being disrupted and philanthropy must be open to new ideas and approaches. There are many opportunities for philanthropy to be part of cross sector problem solving.
Find out more about Lord Mayor’s Charitable Foundation at www.lmcf.org.au