We have a lot to reflect on. I’d like to start with David Brookes. David, we started last week with the Social Traders Conference. What were some of the key takeaways that you’d like to share with everybody, and how might we move forward after what’s been a really big week of events?

[David Brookes] – Thanks, Tom. Could I just start by acknowledging QSEC and Impact Boom for partnering with us on this even this morning. It’s great to be here in Brisbane, and I also just wanted to say that Social Traders has run similar breakfast events here in Brisbane over the years. It’s great to be doing this again in 2019 with David LePage, in conjunction with the annual conferences that we’ve held over the number of years. We’ve brought a number of international guests out. It’s great to be able to do this again this year with David to provide a bit of a perspective and insight in terms of the sector here. We’ve been able to do that in the past, going back several years ago with people like Peter Holbrook, and Nancy Neamtan, so it’s great to be back here.

I want to acknowledge QCOSS here today, because we’ve actually hosted a number of these breakfasts in Brisbane with QCOSS before QSEC was formed. Mark, it’s great to have you here in the audience today, and our staff here in Brisbane are co-habitating with QCOSS.

I think here in Queensland, through the Queensland Social Enterprise Council, that you probably are certainly leading on that front; being the most coordinated and organised grassroots movement here. As we saw and heard last week, networks forming at state levels around the country… in Victoria, where SENVIC was launched by the Victorian minister. South Australia is doing great stuff, and in New South Wales and ACT a new council along the models of QSEC is being formed as well.

The ecosystem is developing… it’s still fragmented, I think we’ve got some gaping holes on the finance front as well, but I think where the trajectory is that way, rather than that way, or that way, we’ve got a lot to be positive about and confident. David and I, over the last few days, have had some really positive discussions. Not only in Queensland and Victoria, but with New South Wales. Also, some recent positive discussions at a federal level.

We have 2021 marked as a strong objective to get that national strategy in place; strongly informed by local and state strategies.

[Emma-Kate Rose] – I’m still recovering. Who came along? Hands up. Yeah… half the room… awesome.

It was amazing actually. I think it was a huge leap of faith for people to trust the process; an Unconference is not a conventional thing to invest your time in; turning up with no agenda and no idea of who’s going to be there. But the actual process was incredible and I think not just the content, (the quality of the content was obvious), but the main aim was really to take advantage of all of us being in a tight geographical area over 36 to 48 hours, with little opportunities to escape. Actually, five days before we arrived, the camp decided to impose a no alcohol ban… so we couldn’t even imbibe afterwards. Which was kind of good in a way, on reflection.

So, a lot got done. I think there’s already three or four Facebook groups that have already popped up of people connecting and wanting to work together. There were a lot of people there who were seeking support, who came up to me afterwards and said, ‘I got everything I was looking for after this weekend; all my questions were answered.’ Just to see the great mix of people; not just social entrepreneurs, but also Belinda and Allan from the English Family Foundation braved the school camp accommodation and terrible food to join us, and really hear from the grassroots, and be complete participants in the whole process. So, it was fantastic.

One of the things that came up out of the weekend, was that it’d be really great to do this again, but in other regional areas. And to follow the model of pitching for world forums; get the regions to pitch to QSEC to host an Unconference once a year. So, watch this space; it’ll be really exciting. I think it’s just the first of many for us. As a very young organisation, I think with the coming of a couple of staff to bolster our professional support, I think there’s only good things to come for QSEC.

[Tom Allen] – Absolutely. Part of the beauty of that Unconference model is recognising that all of you here today are experts in your own right, and giving to the sector in your own way… it really gives everyone that equal platform to contribute, put sessions forward, and hold talks.

So, Belinda Morrissey, you’ve been supporting the sector as part of the English Family Foundation for quite a while now. Part of your focus is looking at how you can provide the right capital at the right time as well.

We’ve been focused on the social enterprise sector for about the last six years, and being a Family Foundation, we have the absolute privilege of being able to be nimble and fund into areas where there are the gaps. About 18 months ago, we decided to really flip our model and fund specifically into the ecosystem; because the ecosystem was where it was the unsexy area. And it is so hard to get funding into that ecosystem.

One of the main barriers that we have been seeing is the lack of support for the intermediaries. I think, David, to your point earlier, is a thriving ecosystem needs thriving intermediaries to really support that.

The other areas that still have major concern in Australia is the lack of capital. I do talk about access to the right capital, at the right time. Because in Australia, without having a really strong legal structure to support the social enterprise space, a social entrepreneur has a vision and they have to decide very early on what legal structure they’re going to take. That legal structure then dictates their access to capital. Are they going to a charitable model, and not for profit and therefore go down the philanthropic grants route, and only be able to access debt? Or, are they going to be able to be a Pty Ltd, for-profit, for-purpose company, and access equity?

[Tom Allen] – Thanks, Belinda and David.

David LePage, you provided those six key points for ecosystem development, and you’ve spent a solid week or so now having many, many conversations. Are there any specific points that you see really should be reiterated and focused on within those six points? Gaps that you see, that we should be focusing on in Australia?

[David LePage] – Well, I actually think that the previous three comments cover it really well. The networks are growing… but it takes a lot of work. It’s not something that a lot of people are resourced to do. We’re finding a shift in Canada as people get much more engaged in growing and having larger businesses. So, someone like Marcia Nozick, who’s CEO of EMBERS, is running a 12-13 million dollar a year business. She can’t necessarily drop that business for a week and go camping for bad food.

So, I think we have to be very careful that we are aware of where our focus is. I totally agree with Belinda. We have so much money in Canada, and I tell you, the government just put 755 million dollars into a new fund, and I said that is not what we need.

We don’t need more money; we need the right money. We have banks that make 10 billion dollars a year in profit, who have no responsibility to invest in patient capital. We have foundations sitting on hundreds of millions, if not a billion dollars in an endowment which is invested in the stock market, which is creating the problem they’re trying to solve with the money they make in the market.

So, the whole thing to me is, there’s enough money. SOCAP, which is the social capital meeting that happens every year in San Francisco, started 15 or 20 years ago by a group like this, very grassroots. SOCAP was sold to investors four years ago because the profits around the event are so great, and the discussion. So the tsunami of money coming is actually money, as a friend of mine calls it, looking for google with a halo.

They are not creating social capital, and they are not creating social value capital. They are creating investor capital.

I think what we’re seeing is when we can have that discussion here… it’s amazing. Then Social Traders, with creating an amazing… to have 62 buyer members, and a lot of those being private sector, and using government purchasing to drive the private sector partners is just strategic. But, I think what we need to keep doing is be aware that, at least we’ve realised in Canada, you can have an election and that falls apart.

People always say, how do you do public policy, and I say, you just stay focused, stay persistent, and when the window opens, jump in.

So, I think that’s the thing; the flexibility matched with focus, is really going to be the challenge because you have some great opportunities, but we all know they come and go; and so, how do we stay focused?

It’s hard, because last week, someone said, ‘well should we look at the short term?’ And I said, ‘yes, you have to measure your short term.’ They said, ‘well you just contradicted yourself, because you’re talking about the long term.’ I said, ‘no, the short term has to focus on achieving that ecosystem.’

Don’t be afraid when we fail sometimes, because sometimes we try really hard to create a new market or create a public policy, and it doesn’t happen. But every time we try, we’re building the networks and we’re building the knowledge. I think that’s really something that has to be maintained.

[Tom Allen] – Thanks very much, David.

We’ve got a lot of great voices in the crowd, here, and it’d be great to give that opportunity to a couple of you to ask a question to the panel. So, were there any questions?

[Sabrina Chakori] – Thank you for your insight, but I was at the Social Traders Conference in Melbourne, and I spoke with many social entrepreneurs. They agreed that the highest cost that any business in general has, is salaries and rent. So, I think when we talk about resources, we talk a lot about capital, but if that capital then is invested in rent… well, it’s not really supporting the thriving ecosystem.

So my question is a bit for everyone. With the growing population, especially in Australia, with the free markets that we can’t stop in our cities that are being designed and sold to bigger corporations, how can we actually allocate affordable, accessible spaces?

[David LePage] – I think there’s another way to look at that. We just set up a social enterprise in Vancouver, and Vancouver probably has the highest real estate wherever you want to go. What we did is we went to the social housing authority and to government, and said, you own a lot of property, and a lot of your property has commercial space in it. So, we actually signed a lease for 100,000 square feet of commercial and retail space from the social housing. It’s the first floor below. Social housing above, street level commercial, and we signed a 15 year, plus 5 year option, lease at a very accommodating rate, because they realise that their space can be more than just property, because it’s government owned and it has a blended value. Then we can rent to nonprofits and social enterprises at operating costs, and then the commercial tenants pay market rent. The profits can be reinvested in social enterprise.

So I actually think there’s some very creative opportunities to review the real estate market from the social enterprise lens, as opposed to assuming that it’s always going to be privately owned and privately controlled. I think we’re seeing movements around land banks, and changing the ownership, transfer of ownership, especially when, I don’t know about in Australia, but in Canada, government owns a lot of property. They have just accumulated it, and we have big arguments with the City of Vancouver, because they think it’s an income stream; we think it should be a social value stream.

So, I would reexamine how property is used. And even with Social Traders, with the procurement thing, we have some nonprofits who actually sit in the SAP office in Vancouver. So how can we reexamine space to look at it through a different lens than just a rent lens.

[Belinda Morrissey] – Just to add to that, there’s also something unlocked in Australia… and obviously I come from a philanthropic lens, but a few years ago, the government did actually put into the tax legislation for foundations that they can unlock value, and that value might look like a grant, but it might look a dollar a year rental stream. Both of those can actually become financial incentives. We haven’t unlocked or tapped into that in Australia.

Something that we’re trying to do within philanthropy in Australia is actually encourage the philanthropic sector to consider how they can unlock social value… and that’s something that is in motion, because a lot of philanthropists run big business; so they could actually unlock a portion of their office space or their own properties that they could actually do that really low rental. So, I agree.

[Tom Allen] – Thanks very much Sabrina, David, and Belinda. I had a thought there about our anchor institutions; the universities. With the amount of space that they have… perhaps that’s an opportunity for that sector?

[Johanna Klout] – Thank you. To carry on from that, my start up is based in regional Queensland. So, to get the traction that I need, I need to come to Brisbane to set up here. So I’m paying a mortgage and I’m paying rent… and then how am I supposed to pay for office rent as well? So, fortunately Advance Queensland is fantastic. They have a landing pad at The Precinct that I use. But if that wasn’t available, what would I do? There are limitations to long term aspects of that as well.

But going back to what you were saying about impact investment. As a startup, (it’s a for-purpose, for-profit), I started looking at impact investment. I approached organisations in Australia, I spoke to Charlie Kleisner in the States, and they all seem to come back with, ‘once you’re turning over 50 thousand a year, come and talk to us.’ I found that quite disappointing as an attitude. I think it really should be looking at the proposition you provide, the value proposition, rather than what your possible impact is, rather than this floor of, ‘come and see us when you’re turning over 50 thousand a year.’ So, I think that’s another area that we can be looking at as well… that risk factor.

In the meantime, I’ve been very fortunate. An international IT company has seen the purpose that can be achieved, so I have an investor now, but I think it’s a bit of a shame that the impact investment sector didn’t stop and look at the impact that was possible with the particular startup I have. Because in the meantime, when you’re [running] something like me, you’re paying all the bills yourself, you mortgage your house to be able to achieve what you’re achieving, because you have this mission, this purpose, that drives you. Then, it’s the very sector that you think that would pick you up, is the very sector that says, ‘well, until you’re actually turning over a certain amount, try somewhere else.’

[Tom Allen] – Thanks Johanna. Do we have any reflections on that? Time is quickly escaping us, so I’m wondering if there are some final reflections?

[David Brookes] – I think it’s a really good point, and as Belinda was saying…

I think there’s a really huge need to have a whole spectrum of finance available for enterprises at different stages of their development.

Social Traders, in its earlier days, ran a patient capital fund for start up in early stage, which was a mix of non-repayable investment and then loan repayments. Then, we provided business support behind that as well. So, there’s not a lot of that sort of finance available. I think some of the philanthropists are doing some of that work really well, particularly in Victoria, we’re very lucky down there, but I do think there’s a huge role for government to incorporate some of that into their thinking as they put out a strategy. Those strategies need to be funded and implemented, and that’s one of the things that I think government can do in conjunction with philanthropy and impact first with actual investors.

[Emma Kate Rose] – Just to add to that, we’ve been lucky in Brisbane, I guess to a point, where we’ve had a little bit of support from Brisbane City Council in providing some incubator style support for Elevate+. This is a big missing piece in next stage growth, but I do see a role where universities can start getting a bit more agile in that space as well, and start providing a lot more resources to assist with that sort of technical support.

In terms of funding, watch this space in terms of Advance Queensland 2.0. I know that Shannon Fentiman in particular, and Kate Jones, are both very interested in social enterprise, especially Minister Fentiman, she’s a bit of a champion for us. Kate Jones, having previously a climate change portfolio, is pretty aware of the issues, too. So, I feel like there are some stars lining up there and with Leanne Kemp as the Chief Entrepreneur, just signed up for another extra year, she has started to advocate for the circular economy; still working on that, and I know that there has been some meetings on impact with her as well.

I think it will be really interesting to see what happens in the next 12 months in terms of State Government support for social enterprise.