Powered by momentummedia
nestegg logo
Powered by momentummedia
nestegg logo
nestegg logo

Invest

Philanthropic investors given opportunity for financial guarantee

By Grace Ormsby · August 19 2019
Reading:
egg
NAB
Philanthropic investors given opportunity for financial guarantee

Philanthropic investors given opportunity for financial guarantee

author image
By Grace Ormsby · August 19 2019
Reading:
egg
NAB

A new financing model to address complex social issues such as chronic homelessness will be able to guarantee financial returns for investment into social impact projects.

The contingent grant model, as developed by NAB, the Victorian government and Sacred Heart Mission, will reportedly enable philanthropic organisations to provide a financial guarantee to investors that fund social impact investing programs.

According to NAB, the new instrument “unlocks philanthropic capital to underwrite the risk of losses and lowers the cost of financing” and is the first transaction in Australia that includes guarantees from philanthropy in the delivery of a government pay-for-performance contract.

The bank’s chief customer officer in corporate and institutional banking, David Gall, said, “This is financial innovation of the best kind because the end result is more tangible help for vulnerable people in our society.”

Social impact investing is typically able to tackle a range of social and environmental issues such as homelessness, mental health and offender rehabilitation.

Advertisement
Advertisement

For Sacred Heart Mission general manager Catherine Harris, “the contingent grant model gives service providers, such as us, and governments the ability to unlock the potential of philanthropic capital”.

“It’s a win-win for governments, not-for-profit groups and philanthropic organisations,” she said.

 

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article
author image

About the author

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

From the web

Recommended by Spike Native Network

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Copyright © 2019 MOMENTUM MEDIA