Charity impact fund goes global

“We face a $2.5 trillion gap per year to achieve the sustainable development goals, so we know we’ve got to find new forms of finance that can be creatively deployed to help Save the Children’s mission.”

Following the success of Save the Children Australia’s social impact fund on home shores, the charity’s CEO is now taking the innovative finance model overseas. 

Launched at the start of 2020, the 10-year impact fund was the first of its kind to be run by a charity in Australia and raised $7.5 million via a range of investors such as QBE in its first year. 

With a focus on funding edtech, e-health and fintech innovations that improve the lives of disadvantaged children and families, the charity has so far invested in initiatives such as a specialised Indigenous learning centre, a biodiversity credit business, and a data science company using machine learning to improve fundraising outcomes. 

Paul Ronalds, the CEO of Save the Children Australia, told Pro Bono News that with 25,000 staff working in 115 countries, the time was right for the charity to look further afield. 

Working with a small global team of people based in South America, Europe and North America for the next six months, Ronalds said that they were looking at a range of “creative finance” products that went beyond just impact investing.

“We are looking at things like parametric insurance, which is essentially an insurance product that pays people when disaster strikes, rather than when someone suffers a loss,” he said. 

“So there is currently a drought in the Horn of Africa, and every farmer that has one of these policies gets paid $5,000, irrespective of their loss. 

“What that means is that cash gets injected into these communities much faster.”

He said that without thinking outside the square, charities could not fulfill their missions of helping vulnerable people. 

“Globally, we face a $2.5 trillion gap per year to achieve the United Nations sustainable development goals, so we know we’ve got to find new forms of finance that can be creatively deployed to help Save the Children’s mission,” Ronalds said. 

“By doing this, it will mean there’s more money going into the sorts of issues that are impacting on the world’s most vulnerable children and families.”

An answer to the existential crisis facing the humanitarian sector

With Australian government aid funding at an all-time low, Ronalds said it was crucial the humanitarian aid sector found more ways to leverage private sector investment.

“We either start to leverage these people or we go out of business eventually,” he said. 

He added that not funding the best and brightest entrepreneurs across the world was a missed opportunity by large charities. 

“It’s so important we leverage our platform to make an extraordinary difference for children and families,” he said. 

“And if big international NGOs in Australia are not grasping that opportunity yet, they’re not serving their mission, and that’s really scary.”