Hands in pockets, eyes on outcomes

Americans have a long and impressive tradition of philanthropy, which is just as well, given the United States’ social safety net is far thinner than Australia’s. Australia is now looking in a similar direction. With the economy facing serious headwinds and governments juggling competing funding priorities, the Albanese Government has set a target of doubling philanthropic giving by 2030. As the Prime Minister said at the Telethon gala ball in October, “government can’t do everything … [but] when government, business, community and people work together, we can achieve so much”.

Giving more is only half the answer, though. The other half is making sure the money goes to what works.

In 2013, around 60 investors, including high-net-worth individuals, Christian Super and The Benevolent Society, put $7 million behind a simple idea: with the right support, parents could safely bring their children home from out-of-home care. Their money funded Newpin (New Parent and Infant Network), a family restoration program run by Uniting, through Australia’s first social impact bond.

Over seven years, Newpin restored 391 children to their families. That’s a 60.9% restoration rate, against an expected 20% without the program, and investors earned a 10% return each year. Best of all, it worked so well that the NSW Government kept funding Newpin on a payment-by-results contract, now extended to 2030.

Governments simply can’t block-fund every charity with a good idea. Budgets are under pressure, grant rounds are oversubscribed, and some not-for-profits spend more time chasing the next short-term grant than building services that last.

Social impact investment changes the equation. Investors fund the work up front, and government pays when agreed outcomes are achieved. Governments (read: taxpayers) and other social impact investors pay for results, not promises.

The real measure of a not-for-profit’s success isn’t a growing budget; it’s outcomes. Are lives changing? Are children safe at home? Are people in sustained work? Are families off the streets? Are we building the foundations for generational change?

Outcomes-based funding puts these questions front and centre. It rewards organisations that can show their impact, and it builds evidence about what works. Newpin’s rigorous measurement is the reason it’s still funded today.

In tough economic times, a fiscal and social return on investment is critical, and governments are opening doors. The Australian Government’s $100 million Commonwealth Outcomes Fund is entering new rounds focused on keeping kids safe at home and overcoming barriers to employment. In Queensland, Treasurer David Janetzki’s Office of Social Impact invests $20 million a year in social enterprises and the impact economy, guided by a four-year roadmap released in 2025.

Beyond government, institutional investors, high-net-worth individuals and charitable organisations are increasingly seeking out and rewarding organisations that are ready for outcomes-based funding.

Newpin shows what’s possible when a good program meets smart funding. At SAS Impact, we work at the nexus of government, capital and social enterprise, helping not-for-profits and other impact-driven organisations build their business, measure their outcomes and tell their story.

Let’s build impact that lasts and find the next Newpin.