Federal budget wrap-up

‘Some good steps on the journey to double giving in Australia’ 

Philanthropy Australia welcomes measures outlined in this week’s Federal budget on the collaborative path our sector is building with government. Amplified commitment to the Investment Dialogue for Australia’s Children, $200 million to support social impact investing along with community foundations reform are all welcome initiatives to address entrenched social disadvantage and tackle some of society’s most challenging issues. 

Philanthropy Australia’s CEO Jack Heath said: “The initiatives outlined by the Treasurer  are  positive developments for philanthropy and how philanthropy can collaborate  with government for greater impact.  “We are encouraged with  the direction of travel and we know that immense potential lies in the decision to partner with philanthropic bodies to address some of the biggest challenges facing society today, such as entrenched poverty and childhood disadvantage. 

“Philanthropy Australia particularly welcomes the government’s emphasis on placed-based initiatives because we have long known that the people who best understand and develop effective programs to improve communities are the communities themselves and must be supported to do so.  

“With an eye to the 2024 Federal Budget, we look forward to working  with government and our members  to build on these positive developments and chart the course to double giving in Australia. The current Productivity Commission Inquiry into Philanthropy provides a once in a generation the opportunity to shape the giving landscape for decades to come.    

Key announcements included: 

• Social impact investing:  

The Government committed $100 million for a Commonwealth Outcomes Fund and $11.6 million for a Social Enterprise Development Initiative to help social enterprises become “investment ready”, but broader elements of a full package are yet to be finalised.   

The government notes it will convene an Investor Roundtable to explore how private capital can further boost impact investment, including through institutional investors providing wholesale capital and support for new and emerging for-purpose organisations.  

The Outcomes Fund will make payments to service delivery organisations according to the measurable outcomes they achieve, while enabling them to attract additional private capital to tackle entrenched disadvantage. The fund will enter into outcomes-based contracts, with non-profits and social enterprises who have a deep understanding of local disadvantage and proven track records in addressing it. The fund follows a recommendation from the Government’s Social Impact Investing Taskforce, on which Philanthropy Australia’s board member Amanda Miller was co-chair. 

Taskforce chair Michael Traill said: “Momentum around impact investing has been growing in Australia, however we have not reached a point where it is at a scale required to bring significant social impact. Tonight’s Budget announcement of the Outcomes Fund and commitment to further efforts consistent with our core recommendations to unlock private capital is a good start to achieving this.” It is also hoped the Government will pick up other elements from the Social Impact Investing Taskforce, including: 

1. A foundation to support early-stage social enterprises, providing flexible loans and funding (such as grants) for capacity building activities, enabling social enterprises to prepare to raise capital and become investment or contract ready, resulting in a scaling of their impact.  
2. A central policy unit within Government, operating as an independent statutory authority, to drive impact investing policy and monitor and assess the success of Government impact investing initiatives.  

• Investment Dialogue for Australia’s Children:  

Building on the outcomes of the Jobs and Skills Summit, the Government will partner with leading philanthropic bodies to support this important initiative. The Dialogue is a cross-sector collaboration to improve the wellbeing of children, young people, and their families, by working with Australian communities to reduce intergenerational disadvantage. Over the coming months, Government and philanthropy will work with sector and community leaders to design and establish the Investment Dialogue processes. This work will be conducted with a dedicated convener within the Australian Research Alliance for Children and Youth.  

In addition to the Budget commitments made by Government, philanthropy will contribute $100m over the next four years, as we work towards a 10-year commitment of sustained investment, innovation and reform efforts. All partners have a shared vision of contributing towards an inclusive and equitable Australia where all children, families and communities can fulfill their aspirations. 

The founding philanthropic partners include: Besen Family Foundation, CAGES Foundation, Dusseldorp Forum, RM Ansett Trust (as managed by Equity Trustees), Fogarty Foundation, Gold Coast Hospital Foundation, Hand Heart Pocket, Minderoo Foundation, Paul Ramsay Foundation, Philanthropy Australia, Stan Perron Charitable Foundation, The Berg Family Foundation, The Bryan Foundation, The Ian Potter Foundation, The John Villiers Trust and Tim Fairfax Family Foundation. 

The Bryan Foundation’s Executive Director Matthew Cox, who was instrumental in bringing the initiative together, said the Dialogue recognised many local communities were already showing the way with innovative and effective programs focusing on children. 

“This is about bringing extra firepower to those efforts, adding value to them and listening to local people about what will make the biggest difference in their communities,” Mr Cox said. 

“We see an enormous opportunity in taking a more cohesive approach towards the services that are currently delivered – seeing where the successes and challenges are, working with communities to improve support for local families and taking the lessons from that experience to inform work in other places. This partnership has the potential to transform the lives of tens of thousands of children across our country.” 

The Investment Dialogue for Australia’s Children is a significant governance reform, involving stronger collaboration between philanthropy and government to drive social impact.  Once bedded down, this approach could be used in other fields – such as First Nations justice, climate change and the arts – to drive even more widespread impact.  Philanthropy Australia has called for this broad governance reform in its submission to the Productivity Commission, available here (see section 3.2). 

The Budget also provided $64 million over six years to extend the Stronger Places, Stronger People program, which delivers place-based initiatives in partnership with 10 local communities and state and territory governments to improve outcomes for disadvantaged children and their families and enhance place-based initiatives in 6 of these communities. 

Another significant development was the allocation of $7.8 million over two years from 2023–24 to develop a whole-of-government Framework to Address Community Disadvantage that will identify strategic objectives and key principles to guide how the Commonwealth will work in partnership with communities to enable them to build their capability to address cycles of disadvantage. 

• Community foundations reform:  

The Government reconfirmed its commitment to specifically list 28 Community Foundations in the tax law.  The 30 June 2027 end date will be removed, with Deductible Gift Recipient status to be subject to ongoing endorsement by the Commissioner of Taxation under new Ministerial guidelines.   

• Climate action and First Nations 

Philanthropy Australia’s partner on the Climate Lens investing tool, the Australian Environment Grantmakers Network, notes that while there is much further to go, the budget was the most promising for the environment in a decade, with Treasurer Jim Chalmers noting that “Australia’s biggest opportunity for growth and prosperity is the global shift to clean energy”.  

Also included was funding for the Net Zero Authority, further outlined here by Philanthropy Australia member Climateworks, to facilitate a just energy transition, among other initiatives. And almost $2 billion for Aboriginal and Torres Strait Islander health, housing, education, employment and the Voice to Parliament. See more in the National Indigenous Times.