$25k grant announced for businesses seeking to do good in the world

Kirsten Joiner, director of Impact Investment for Enterprise Angels. Photo / supplied

BayTrust has announced a $25,000 grant to help encourage more investment in businesses doing good in the world.

The funds will be used by Tauranga's Enterprise Angels network to help establish a new social enterprise system to better support businesses who are making a social or environmental impact alongside a profit.

Kirsten Joiner, director of Impact Investment for Enterprise Angels, said she believed that was where business was going.

"A lot of investors are saying 'we've made money – now I'm interested in seeing what I can do with my money to make a difference in the world'. We also need to help social enterprises get into a position where they're ready to receive that investment."

The social enterprise system is expected to lay the groundwork required for an investment to successfully take place.

"We model it on the ecosystem that currently exists for commercial companies. There are lots of players required to create a 'happy habitat' for commercial start-ups."

Joiner said entrepreneurs may have a great idea but they often needed other people to help them fully develop their product and business plan. Early stage investors, like angel investors, will then step in to lend them initial funds and offer valuable support before larger venture capital investors enter the picture later on. Support from government partners and other agencies is also often required.

"All of these parties need to connect and work well together. We want to contribute to building everyone's capacity and understanding of the different roles they play when it comes to social enterprise."

Enterprise Angels plans to raise a $20 million Impact Investment fund, which is expected to be up and running by July 2019.

BayTrust chief executive Alastair Rhodes said impact investing was gaining momentum worldwide as investors looked for new ways to tackle social issues such as housing affordability and environmental problems.

Last year, BayTrust set aside $12m (6 per cent of their $215m investment portfolio) for impact investments to help drive social change in the Bay of Plenty as well as delivering economic returns.

"This investment approach gives us the ability to maximise our impact above and beyond our annual community grants budget, which is ultimately what all foundations and trusts like ourselves are trying to achieve," Rhodes said.

"We think creating a supportive ecosystem is a smart move and we're pleased to help Enterprise Angels with this project which ultimately will benefit our whole community. We would love to see more social enterprises grow and thrive, and this is an important first step to creating more investment opportunities for the sector."