FAQs

What is Partnering for Scale and Impact?

Partnering for Scale and Impact (PSI) is SSE Australia’s latest initiative designed to extend its social enterprise support to a stage beyond the reach of core SSE programs.

PSI will fill the gap between the social capital market funded by community and private networks that support individuals starting up social ventures and that part of it funded by large philanthropic and impact investor capital markets that support larger and more developed social ventures with no start-up risk. Both of those classes of social investor have business models that require ventures to be further up the development path than start ups.

In that gap, ventures are too big for, or have exhausted, the smaller and private networks that provided start up capital and are too small, undeveloped and risky for the larger providers. PSI has the patience, support and risk appetite for ventures in this very unique and vulnerable stage of development that fall into this gap and never come out of it.

How does PSI work?

PSI works with successful applicants (“PSI Ventures”) over a three-year period; during this time PSI Ventures receive philanthropic grant funding on a pre-agreed drawdown schedule via a Grant Agreement and a team of 3-5 experienced and knowledgeable business people (“PSI Advisors”) that are suited to their specific needs.

These PSI Advisors oversee and guide the deployment of the money and execution of a pre-agreed strategy and business plan that is submitted (and refined if necessary) via the application and grant negotiation process. The strategy and business plan informs the PSI Advisor team about business direction, needs and the drawdown schedule and use of the PSI grant monies. The 3-year term of engagement reflects the PSI mission to shift the PSI Venture along a strategic growth plan and for money to be more than just survival capital.

Why is PSI needed?

Social start-ups need capital to flourish. Start-ups are small, relatively new and untested. As a result, their trading histories are limited, their scale is suboptimal, access to capital and financial resources limited and the path to sustainability is hard to imagine.

Social entrepreneurs can exhaust their private networks quite early in the hunt for start-up capital. Most philanthropic funds overlook them in favor of more established, lower risk missions. The social enterprise model is also a relatively new way of delivering a social mission and, as a result, many in the philanthropic community are unsure how social enterprises fit into their portfolio of support.

The riskier nature of social start-ups also reduces the availability of social debt capital and even those with a lower risk profile may not have free cash flow to support a debt facility. PSI will help ventures exploit the economies of scale and operating leverage available to businesses and make it more likely that they will be able to demonstrate an ability to service debt interest and principal repayments.

Over the course of the 3 years it commits to a venture, PSI will help ventures grow to a point that a larger pool of social capital becomes more available to them.

How many ventures does PSI work with?

PSI will work with up to two ventures in Series 1 which has commitments for $300,000 over three years. PSI will determine the number of “ventures per series” based on the amount of money raised in each series. As a principle, PSI wants to provide a significant boost to the ventures it supports and will keep its engagement and impact levels per venture high, and not dilute that by granting to too many ventures.

How much money does PSI grant to PSI Ventures?

Each series of PSI will provide a minimum of $85,000 per annum in each of the 3 years of an engagement to a limited number of ventures.

Who is eligible for PSI?

Ventures applying to PSI must:

a) Have Deductible Gift Recipient (DGR) status*, or;
b) Be a registered charity or social enterprise without DGR status. PSI encourages non-DGR entities to apply.
Provide CVs of all key staff;
Disclose salary and other remuneration arrangements and any related party transactions;
Provide any strategy documents, a copy of your venture’s constitution and its vision, values & mission statement.
Provide a business plan supported by any trading history, relevant financial statements, market research, key assumptions backed by available data;
Provide a history of funding received from all sources to date;
Provide a list of supporters, key partnerships and business relationships;
Provide indications of their ability to match or source matching contributions made by PSI to their venture;
Be between [approx.] 2 and 5 years old;
Have turnover [of no more than] approx. $1.5 – 2m per annum;
Not currently be a student in a SSE or similar learning program;
Describe how social impact is delivered, and to whom;
Provide a description of customers;
Describe key value proposition in product or service sold;
Describe the market in which the social mission is delivered, and;
Describe the market in which services and/or products are sold.

*Series one applications are open to DGR-status ventures only. Subsequent PSI Series will seek to support non-DGR status entities, which are invited to express interest by sending an executive summary to info@psi.org.au.

What if my business or program does not have Deductible Gift Recipient (DGR) status?

PSI is interested in developing partnerships with funders that do not need a tax deduction to provide philanthropic capital. PSI is also interested in working with organizations that have already identified such a funding source and wish to access PSI networks and Advisors separate to financial support.

Ventures without DGR-status are invited to express interest by sending an executive summary to info@psi.org.au.

Does an applicant have to be an associate or fellow of SSE Australia to apply?

No, PSI is open to all applicants that meet the selection criteria.

Are any pre-requisite courses or programs necessary to apply?

No, PSI is open to all applicants that meet the selection criteria.

Is PSI separate from SSE Australia?

PSI is sponsored and is being incubated by SSE Australia. SSE Australia sees PSI as an attractive partnership proposition for other social intermediaries; corporate, philanthropic or individual donors; government, and; those in the more traditional not for profit sector. It is developed as separate identity in order for that potential to be explored by partners.

What is SSE Australia’s role in PSI?

SSE Australia hosts the PSI Secretariat, made up of the PSI Coordinator, and Partnerships and PSI Manager.

The function of the PSI Secretariat is to service the key PSI stakeholders (Ventures, Advisors and Funders), to facilitate the progress of PSI Ventures, collect evidence of success and report on this progress.

How is PSI different to SSE Australia’s Programs?

SSE Australia’s core learning programs are highly structured and are designed to take social entrepreneurs and their early ideas through a series of steps that focus intent into development action aided by knowledge building, business process planning and practical problem solving methods. At the end of a core SSE program, participating social entrepreneurs and their start ups will be at various stages of business and mission development. Some will be operating a pilot or small scale, early version of what they want their business ultimately to be or are otherwise on their way. Others will continue to develop and refine their idea with the knowledge they have taken away from the SSE program.

PSI is designed to assist social enterprises that have an already operating social business, to grow and scale up.

It is a non-structured, high-engagement level relationship that aims to help social business leaders do what is required to grow their business. PSI tailors bespoke expert advice to the needs of ventures and allows them to use grants effectively to grow and scale their social impact.

There are no student fees, prescribed program days, specified themes or curriculum.

Can current SSE Australia students apply?

No, PSI is not available to current students in one of the 3 core SSE programs (Accelerator, Incubator and Social Change 101).

Who are the PSI Advisors?

The PSI Advisors are people who are willing to commit their experience and expertise to emerging social ventures pro-bono. They may be with the PSI Venture for the entire 3-year term of engagement or they may attach to the PSI Advisors team for a shorter-term project or specific need.

They may have any or all of general business skills, a sector focus, great networks, a professional services background or possess technical skills. All will have had significant success in their field. They are practical, ‘do what it takes’ problem solvers that have signed up to ply their skills and experience on PSI Ventures.

What is the difference between venture philanthropy and impact investment?

Venture philanthropy refers to philanthropic giving to social ventures that operate a business model and is generally associated with social start up or growth capital needed to deliver or grow a social mission.

Venture philanthropy, and philanthropy generally, means the donator is not seeking anything other than a social return or community (non-private) benefit. Such giving may be tax-deductible if the venture being donated to has Deductible Gift Recipient (DGR) status.

Impact Investing is a term that relates to investments that the investor requires  a combination of a commercial or private benefit (a dividend, cash payment and/or a capital gain) and a social or environmental community benefit. Impact investing can be in the form of equity and/or debt.

Where can I find out more?

psi.org.au | or write an email to info@psi.org.au

If PSI isn’t for you, then perhaps one of SSE Australia’s programs might be of interest. Visit www.sse.org.au to see current programs.