Impact for Social Finance

How we think about impact in our investment process 

At Sefa, we often talk about our clients as ‘for-purpose’ organisations, ‘purpose-driven’ organisations or simply organisations delivering ‘impact’. In Australia, the ecosystem is not yet large or mainstream enough for there to be a common, consistent definition of these terms. Therefore, we felt it would be helpful to elaborate on how we apply these terms in practice during our investment process.  

Our approach is to invest in organisations that are able to demonstrate additionality in their objectives and core activities.   

Intentional positive contribution

It should be clear to your stakeholders – both internal and external, direct and indirect (e.g. clients, beneficiaries, staff, suppliers, partners) – that the reason for your organisation’s existence and the majority of your operations have the intent of addressing social disadvantage or environmental degradation. This intention should be embedded within your organisation, reflected in every aspect of its composition and conduct.

Structural or systematic change, or a reduction, mitigation or prevention

Structural or systemic change or prevention typically involves pursuit of a longer term vision of the world where the common ‘ways of doing things’ are different to the current approach, though short term benefits are often present as well.  

A reduction or mitigation in social disadvantage or environmental degradation tends to reflect a shorter term impact, often with the aim of creating the conditions to facilitate structural or systemic change at a later date.  

Social disadvantage or environmental degradation

We recognise the validity of many different types of impact and proudly work with a range of organisations that pursue a variety of causes. Whilst we don’t rank or judge the relative value of different types of impact, we will want to understand how your organisation has defined the social disadvantage or environmental degradation that it is tackling, and on that basis can you provide evidence of the progress you have made thus far? The specific activities that you choose to engage in may evolve over time, but your ultimate goal should be an unwavering ‘North Star’ constantly guiding your organisation.