Foresters Community Finance (Foresters) is a Community Development Finance Institution focussed on delivering community asset building strategies to the social sector in Australia. Community Asset Building focuses on building the strength and sustainability of social sector organisations to deliver their social mission. In the Foresters model Community Asset Building takes the form of real estate – either purchased by a social sector organisation or purchased by Foresters and leased to the social sector organisation with an option to buy in the longer tem.
The social impact achieved through community asset building includes security of tenure, increased sustainability through a stronger balance sheet, changes in organisational culture that result in a more enterprising spirit and increased profile as innovative organisations. These strategies are well developed in both the United States and the United Kingdom where it is widely recognised that community asset building can have positive and powerful effect on the strength and sustainability of the social sector, in turn increasing the social impact these organisations can deliver.
Community Asset Building strategies are underpinned by capital sourced from social investors. Foresters has been delivering social investment to the Australian market for over fifteen years. This has included the management of an ethical superannuation fund, ethical bonds and other community focussed benefit funds. Three years ago, Foresters established the Community Investment Fund, an exempted managed investment scheme, which invests in mortgages and property for the not-for-profit sector.
More recently the company undertook a successful application for a wholesale Australian Financial Services Licence (AFSL), through a wholly owned subsidiary company called Social Investment Australia (SIA). Social Investment Australia will actively support the community asset building strategies of Foresters; align the interest of social investors with the needs of the social sector and deliver social investment product into mainstream investment markets. SIA is currently the only company in Australia capable of delivering on this mission and will release a range of investment product into the Australian investment market over the next six months.
As a precursor to this Foresters has been undertaking a wide ranging analysis of the opportunities to engage social investors. This analysis has contributed to a view that there is an increasing appetite for social investment in Australia. So far we understand social investors as having a number of characteristics including:
- A need to make an investment either in place of or alongside philanthropy;
- A need to use their capital investment to earn an income return;
- A need to see their capital investment achieve a social impact.
The product designed through the expertise of SIA will deliver on these needs by delivering a commercially competitive investment product with a clear investment proposition, backed by a social impact proposition, which provides a strong point of difference when compared to mainstream products in the same asset class.
The challenge to deliver a well designed social investment product on a scale that builds the market interest remains, but the task is well underway. Australian investors have a growing appetite to move beyond financial returns as the only criteria for investment and Foresters and SIA are committed to responding to market demand and engaging with the broader sector to stimulate product development.
Watch this space!
About the Author
Belinda Drew has been in the role of CEO at Foresters Community Finance for four years. In that time leading the transformation of the organisation into a social business providing finance, investment and training to the community sector. During this time she has developed a unique synthesis of skills across the areas of finance, investment and social impact.
Belinda has worked in the community sector in Queensland for over a decade in the areas of homelessness, disability, child protection and housing, holding a number of positions in social policy organisations. And is committed to the development of an industry of organisations that can act in various ways to strengthen civil society organisations and in turn increase their social impact.
Belinda is a Board member of the Queensland Council of Social Service and holds various roles on advisory committees engaged in philanthropy and social enterprise.
Copyright 2009, Belinda Drew, Foresters. All rights reserved. All material in this article is the Intellectual Property of Belinda Drew, Foresters and cannot be reproduced, copied, published, quoted or disseminated without the prior permission of Belinda Drew, Foresters.
Tags: community finance, social ventures
[...] Foresters Community Finance: Community Asset Building Strategies – Belinda Drew, CEO, Foresters Co… [...]