The First Chapter Single pages low res

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THE FIRST
CHAPTER

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We would like to take this
opportunity to thank our wonderful
Founding Partners, donkey wheel
Foundation and the Sidney Myer
Fund, our incredible partner and fellow
practitioners at NAB, and the McKinnon
Family Foundation for their support.
We would also like to acknowledge
the commitment and work of our staff
both past and present in making TDi
what it is today.

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THE FIRST
CHAPTER

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The more you do, the clearer your
thinking will become. When you start
something quite new you don’t have
all the answers—you don’t even
know what all the questions will be
—but with action comes clarity.
Peter Baines
Doing Good By Doing Good

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Contents
Preface
The Setting —
Stepping Intro the Unknown
The Petronas Towers
The Basics —
Social Enterprise
Impact Investing
Investable Social Enterprise
Blended Value
Business Models
The Journey —
Worldview, a Self-fulfilling Prophecy
Failing to Name the Real Problem
The Buck Stops with Me
Grasshopper Soccer
The Work —
What did we want to achieve?
The Next Chapter —
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28
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90

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It is not the critic who counts; not the man who points out how the
strong man stumbles, or where the doer of deeds could have done
them better. The credit belongs to the man who is actually in the
arena, whose face is marred by dust and sweat and blood; who strives
valiantly; who errs, who comes short again and again, because there
is no effort without error and shortcoming; but who does actually strive
to do the deeds; who knows great enthusiasms, the great devotions;
who spends himself in a worthy cause; who at the best knows in the
end the triumph of high achievement, and who at the worst, if he fails,
at least fails while daring greatly, so that his place shall never be with
those cold and timid souls who neither know victory nor defeat.
Theodore Roosevelt
Citizenship in a Republic

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PREFACE
As I reflect on Theodore Roosevelt’s famous words I am proud of the fact that
TDi is firmly ensconced in the practitioner camp. We are “in the arena”, our
faces are “marred by dust and sweat and blood”, and we are “daring greatly” in
pursuit of something we hold dear. That being, our confidence in the concept
of Blended Value; that you can do good and make money in the same
business model.
TDi: The First Chapter is a beautiful opportunity for reflection, celebration and
thanks. As Peter Baine said so powerfully “with action comes clarity”, this has
certainly been true for us at TDi. We initially embarked on this journey five years
ago as a project of the donkey wheel Foundation. We later evolved into a
separate organisation, growing and refining its model, particularly over the
two-year pilot period.
As with any start-up, many of our assumptions about how the business model
would work didn’t play out as planned… We were agile and changed. The
market proved far more immature than we hoped… We were responsive.
Funders didn’t follow through on their commitments of support… We were
innovative and worked even harder. Everything took far longer than hoped…
We were resilient! As a result we are still here, making us stronger and better
positioned for the next chapter in TDi’s development.
It’s our hope that reading, or flicking through, this book will give you a sense of
our work, our approach and the exciting results we are beginning to see. This is
truly only the The First Chapter. We have only just scratched the surface and we
firmly believe that the best is yet to come.
Bessi Graham
CEO and Co-Founder

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THE
SETTING

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STEPPING INTO
THE UNKNOWN:
PHILANTHROPY AND
THE PIONEER GAP
We live and operate in an era that
requires great acts of bravery,
creativity and fresh approaches to
entrenched social problems.
So, why do we need to be brave?
We need to be brave because the
stakes are high, the need is great
and the challenges we face are
complex.
There is no denying that the ways in which humankind has sought to solve
complex social and economic challenges has not been sufficiently effective.
This is the time to begin to think differently about the way we act and enable
change. Stepping out of the familiar, and into unchartered territory is, by its very
nature, risky. If, however, our aim is to maximise the positive social impact we
enable, then it is a risk worth taking.
What does brave philanthropy look like?
Brave philanthropy requires an honest assessment of the system in which
we operate, the system in which we enable change. It also requires action,
consistent action. If in the survey of the current landscape you uncover
important issues with the potential to create positive social impact that lack
sufficient advocates, resources, attention and long-term committed partners,
this is the arena of brave philanthropy.
What have we been doing?
Our founding partner donkey wheel’s mantra is: ‘think different. act different.
make a different difference.’ At first it may seem hard to interpret the depth
of meaning within this mantra. So read it again, slowly: ‘think different… act
different… make a different difference…’
Each part of this mantra is critical, and our desire to operate with it in mind
means that the complexity of the system in which we operate provides
exciting opportunities and challenges to put this mantra into action. Embracing
innovative new approaches that push the boundaries, exploring how we can
leverage what we have, and maximising our impact through enabling others
is what we love to do. donkey wheel’s journey led them to seek ways to
leverage their corpus funds to generate blended value returns, through an
integrated approach. For them that integration comes through combining
impact investment and social enterprise with ongoing grant making. It was out
of this approach that The Difference Incubator (TDi) was born.
Impact investment does not diminish the need for philanthropy. In fact, we
would argue it both increases the need for it, and creates great synergistic
opportunities for leverage.
Social enterprise, through marrying profit and purpose, is positioned perfectly
to deliver the blended value returns philanthropists, like donkey wheel, seek.
At this point a caveat is necessary. This is a new space and is in its early days
both here in Australia and internationally. donkey wheel has become more
committed to impact investment and social enterprise being their most effective
conduits to achieve social goals. Teaching us that the social enterprise sector
is not yet mature enough to produce the commercial returns necessary to
generate true blended value.
So what is the role for philanthropy in the social enterprise sector?
Impact investors enable social enterprise to scale once they begin generating
both financial and social returns. However, courageous partners such as

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donkey wheel, Sidney Myer Fund and other brave philanthropists are required
in the early stages of a social enterprise’s journey. For most philanthropists,
their granting and support is driven by a desire to see social impact. Promising
social enterprises are often able to achieve social impact very early in their
development. The challenge is found when entrepreneurs need initial seed
funding or grants to commence operations and develop the enterprise before
they can start achieving their social purpose.
One of the greatest potentials of the social enterprise model is that we are able
to build capacity so that they can become Investable Social Enterprises (ISEs).
This means that the enterprise is then able to attract impact investment, their
reliance on grants will be decreased, hence releasing those grants for other
socially focused organisations, that are still in a grant dependent stage.
With all of this in mind, TDi was established to provide a nurturing environment
that will help grow social enterprises into financially sustainable organisations
who are less grant reliant but still delivering maximum social impact. Working
with TDi allows enterprises to test and build whilst reducing the risk of failure.
The danger here is often so high with start up businesses, particularly those
that are driven to make great social change.
Building the capacity of the social enterprise market will also open up a
legitimate avenue for Philanthropists to invest corpus funds. The blended value
returns generated by these investments enable ongoing grant making and
significantly leverages Philanthropic capital in an integrated and holistic way.
‘How will promising… business
models get to later stages where
they become investable without
support earlier on in their journey?
We call this critical gap in support
the ‘Pioneer Gap’, and we believe
that this is a key factor constraining
the availability of investment
opportunities for impact investors.
Unless we address this pioneer gap,
much impact capital will continue to
sit on the sidelines or be deployed
into sub-optimal opportunities
for impact, and fail to achieve its
potential in driving powerful new
market-based solutions…’
— Blueprint to Scale

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‘As our interest in impact investment
grew we became acutely aware
of the dearth of investment
opportunities capable of delivering
blended, social and financial return.
TDi is taking operational social
enterprises and providing them with
the capacity building advice to make
them investment ready. We believe
that this work in incredible important.’
— Elena Mogilevski
Program Manager, The Myer
Foundation and Sidney Myer Fund

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THE PETRONAS
TOWER AND
STEPPING INTO
THE UNKNOWN
I love watching TV shows about
major engineering projects; their
complexity, drama and all of the
unknown details that cause sleepless
nights for those involved as they
struggle to find solutions within tight
deadlines.I recently watched a show
that told some of the design and
build story of the famous Petronas
Towers in Kuala Lumpur.
I was struck by the fact that the build was well underway before they had even
finished testing. They hadn’t even decided on the “recipe” of the concrete to
be used for construction. Building towers of this size using concrete, instead
of steel, was tricky and it was crucial that they get the mix right to avoid delay,
added cost or worst-case scenario disastrous consequences.
They could have been paralysed by the pressure of that reality, spending years
testing and refining the mix before beginning construction. Instead, they dove
right in. They created urgency; they created a deadline; and they succeeded.
We explain the difference in TDi’s approach to capacity building through talking
people through TDi’s Evolution diagram.
The story about the concrete in the Petronas Towers sounds a lot like the
process shown at the bottom of the diagram. A typical approach of a social
entrepreneur. They have a great idea and jump straight into building something
without testing if it is robust or viable first.
We all know the inherent limits of this approach. Yet research also shows us that
there is something powerful about having restraint, deadlines, and seeking to
drive innovation through approaches such as Lean methodology, hack-a-thons
and intensives such as accelerators. Sometimes pressure produces brilliance.
Learning how to tell when you should wait and when you should push forward
is hard. Sometimes it’s best to sit patiently a little longer in the unknown to let
creativity, design and hopefully innovation bubble to the surface.
Deciding it’s time to forge on ahead into unchartered territory and trust that you,
and your team, have what it takes to figure it out can be scary.

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There is a time and a place for both. At TDi we are constantly struggling with
when to sit and when to charge on. We don’t always make the right decisions,
but our choices are always intentional, and we are reflective on the results.
I know for our team there are moments, many moments, when I am asking them
to step far outside their comfort zones, outside what they know. I ask them to
trust us, and themselves, and to speak into the void the best they know how.
Sometimes it works; sometimes it’s a total mess! I ask them to trust us, and
themselves, and to speak into the void the best they know how. Sometimes it
works; sometimes it’s a total mess!
For us this is a journey. This is an ongoing cycle of articulating, testing,
reflecting, refining… repeat. I plan on us getting very good at this so watch
this space! We do not have all of the answers. But we do have a damn good
method and exceptional results; even in the short time we’ve been operating.
• We have designed a program that has agility built into it.
• It’s a program that recognises the need for, and power of, iteration.
• A program that respects the need for “white space” to allow the “particular”
of each organisation or situation to emerge within the “general” that is
articulate in our method.
• A program that refrains from the urge to drill down to detailed process and
instead aims to powerfully capture the essence of our approach through
communicating “method” not “process”.
We’re still figuring out the concrete recipe while we build this ground breaking
organisation, but I can tell you now this is going to be remarkable! Bring on the
messy complexity of the unknown. We were born to create in this chaos and to
restore beauty and order in the process. I see exciting times ahead.

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‘It is hard to over-state the
importance of proving the concept
as TDi is doing. Only through
such an organisation, can social
entrepreneurs be nurtured and
resources be directed sustainable to
some of our most intractable social
issues.’
— John McKinnon
McKinnon Family Foundation

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THE
BASICS

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WHAT IS A SOCIAL
ENTERPRISE?
A Social Enterprise is an organisation
with a central social or environmental
mission that has, or is developing, a
sustainable business model.
There are different, and often
conflicting, definitions of social
enterprise in use in Australia and
internationally.
At TDi we have chosen to take a
broad approach in how we define
social enterprise. We focus on why
the business exists, what it does and
how it does it. We are not concerned
with its legal structure or how it goes
about the reinvestment/redistribution
of profit.
Mission
An organisation must have a social
or environmental mission at the
core of what it does in order to be
characterised as a social enterprise.
Mission is not about legal structure;
we are agnostic to legal structure.
Instead, mission speaks to the driving
force or intention of the business
and why it exists, or what it seeks to
create in the world.
We favour integrated models where
the mission of the organisation
is realised directly through the
business, not simply funded by the
profits of the business.
Model
A social enterprise’s integrated
business model can be designed
using the Business Model Canvas
tool. This simple but highly effective
framework can help an organisation
design a sustainable business that
allows it to achieve the desired
social or environmental outcomes
consistently through the operation of
the business.

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WHAT IS IMPACT
INVESTING?
‘Social Impact Investments are those
that intentionally target specific
social objectives along with financial
return and measure the achievement
of both.’
Social Impact Investment Taskforce
If we look at the definition of impact
investment the two critical words
are the “intentional” nature of the
investment and the “measurability”
of the investment in relation
to the social or environmental
impact. Management’s willingness
to articulate the desired social
outcomes of their organisation, as
well as the measures or metrics they
will use to evaluate their success,
positions them well to be able to
engage with impact investors.
In this category you want to see
alignment between the Mission, the
Model and the ability of Management
to deliver on the Mission and Model.
Three key features of impact
investments for TDi:
1. We see impact investment as a
lens through which we can view
all asset classes and investment
opportunities
2. We focus on the intentionality of
the investment, the intentional
desire to invest in things that can
generate both a social and a
financial return
3. We prioritise the importance of
measurability as a way to ensure
accountability and the delivery
of desired outcomes. There are
many ways we can describe the
impact investment approach to
business. One key aspect is that
it is not corporate responsibility,
nor is it about compromising
on either the social and
environmental goals or on the
financial return required. Instead,
it combines these goals to create
the desired outcome ofblended
value.
‘If impact investing is what we do,
blended value is what we produce.’
Bugg-Levine & Emerson
Another helpful approach is to
understand what impact investment
is not. Impact investing is not a grant
– A grant is usually provided without
the expectation or requirement of
a financial return, however impact
investment refers to placing capital in
an organisation with the expectation
of a financial return.
Impact investing is not a specific
asset class – It is more accurate to
view impact investment as a lens
through which we can see all asset
classes. The lens approach also
prevents a narrow understanding of
grouping all impact investments in
one category and expecting there
to be common risk return profiles for
these investments.
When investing in different asset
classes with an impact investment
lens, the risk return profile is that of
the particular investment.
Impact investing is not a negative
screen – Choosing investments by
ruling out those doing societal or
environmental harm was an entrylevel
activity for ethical investors in
the early days of the movement, and
for some it is still the main approach.
However it fails to take a proactive
and intentional approach to choosing
what to invest in.

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WHAT IS AN
INVESTABLE SOCIAL
ENTERPRISE?
An Investable Social Enterprise
is an organisation with a central
social or environmental Mission,
a commercially viable business
Model, and the right Management
to deliver on the Mission and
Model.
Over the years at TDi we have
sought to differentiate between a
Social Enterprise and an Investable
Social Enterprise (ISE).
An ISE represents the next
step on the enterprise maturity
spectrum. If a social enterprise is an
organisation that features a social
or environmental mission and has a
sustainable business model, what are
the features of an ISE?
At TDi we believe these features
can be grouped into three main
categories: Mission, Model and
Management. Let’s break it down a
little.
Mission
Similarly to a standard social
enterprise, an ISE must have a social
or environmental mission at the core
of what it does.
Mission is not about legal structure;
we are agnostic to legal structure.
Instead, mission speaks to the driving
force or intention of the business
and why it exists, or what it seeks to
create in the world.
We favour integrated models where
the mission of the organisation
is realised directly through the
business, not simply funded by the
profits of the business.
Model
An ISE’s business model needs
to be more than just sustainable.
While sustainability is enough for a
standard social enterprise, an ISE’s
model must be commercially viable
as the organisation needs to be able
to service or repay the investment
capital it takes on.
An ISE’s integrated business model
can be designed using the Business
Model Canvas tool. This simple
but highly effective framework
can help an organisation design a
commercially viable business that
allows them to achieve their desired
social or environmental outcomes
consistently through the operation of
their business.

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Management
To appeal to investors in the area
of management, an ISE must have
the following three features: track
record, a passionate and capable
management team, and a willingness
to be held accountable for social and
financial returns.
Track Record relates to two things:
their mission and their financial
history. Does the organisation have
a proven history of delivering quality
products or services that relate to
their Mission?
And, have they demonstrated their
ability to deliver financially? A merger
or acquisition can be very powerful
for a social enterprise if you buy
a business that has cash flow and
historical financial data you can
then point to as the basis of future
financial projections. This really helps
strengthen the investment case.
However, we understand that
historical financial track record is not
always an option in a new emerging
market. Piloting and prototyping are
other approaches we use to help
build this whilst demonstrating that
we have tested assumptions, even if
at a small scale.
The existence of a passionate and
capable management team is a
critical feature of an ISE. People
make or break a deal; a powerful
combination of passion and capability
helps provide the assurance
investors need.
We can guarantee that things will not
always go to plan, so having a team
who are equipped and agile enough
to adjust and react well to anything
that comes their way is imperative.
A willingness to be held accountable
for social and financial returns is
the way in which management sets
an investment in their company
apart from a standard investment. If
we look at the definition of impact
investment the two critical words
are the “intentional” nature of the
investment and the “measurability”
of the investment in relation to the
social or environmental impact.
Management’s willingness to
articulate the desired social
outcomes of their organisation, as
well as the measures or metrics they
will use to evaluate their success,
positions them well to be able to
engage with impact investors.
The focus is set on community as
we believe there to be a critical
distinction between a team and the
individual. The right mix here can
actually make an impact investment
less risky than a standard investment
because of the passion and
commitment of a group to deliver the
Blended Value returns.
In this category you want to see
alignment between the Mission, the
Model and the ability of Management
to deliver on the Mission and Model.

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WHAT IS
BLENDED VALUE?
Blended Value is the delivery of
both a social or environmental
return AND a financial return. It’s
a win-win that does not require
compromise on either side of the
social or financial equation.
Blended Value is a central feature in
the way we think about and practise
Impact Investment at TDi. Antony
Bugg-Levine and Jed Emerson
captured the underlying drive for
impact investment in their statement
“If impact investing is what we do,
blended value is what we produce”
Bugg-Levine & Emerson.
Maximising value while considering
multiple aspects of performance
means we no longer have to operate
in a binary way; choosing for profit or
not for profit, doing good or making
money. Instead it creates the space
in which we can design approaches,
solutions and organisations that can
deliver positive outcomes on multiple
fronts.
‘…the heart of the movement is the
reorientation around blended value
as the organizing principle of our
work: using capital to maximize total,
combined value with multiple aspects
of performance.’
— Impact Investing: Transforming
How We Make Money While
Making a Difference, 2011

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WHAT IS A
BUSINESS MODEL?
‘A Business Model is the
elegant expression of how all
parts of a business work
together for success.’
— Paul Steele,
TDi Co-Founder
The Business Model Canvas, created
by Strategyzer, is elegant, clean,
and simple. This is achieved through
its incredibly clever design, refined
by years of testing and incremental
improvements. There are nine boxes,
which when filled in reflect your
entire operation, and all on a single
page.
We gain insight into our customers:
who they are, what distinguishes
them, how they interact with us, why
they like us, how they pay.
We see what goes on behind the
curtain: what are our most critical
processes and operations? Which
team members are currently
irreplaceable?
We know how the dollars flow: When
and how do we generate revenue?
What are our main cost drivers?
What’s our breakeven point? Can we
sell enough to keep afloat?
business that delivers social and
financial returns simultaneously.
It’s not easy but it is the best and
most effective way to build a social
enterprise.
The canvas asks three thematic
questions:
1. What makes your product
appealing to your customer
group? (Desirability)
2. What has to be done behind
the scenes to make a desirable
product? (Feasability)
3. How does money enter and exit
the business? (Viability)
When you get all three of these
areas working together your
business becomes a powerful agent
for change, and has the ability to
scale.
At TDi we use the Business Model
Canvas to integrate the social
mission of the social enterprises we
work with into how they run their
organisations. This is centred on one
of our key mantras: “You get what
you design for.”
An integrated business model rarely
happens accidently – you need to
design and deliberately create a

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THE
JOURNEY

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WORLDVIEW... A
SELF FULFILLING
PROPHECY
Over the years we’ve watched
the results different intermediary
organisations get, both here at home
and abroad, as they attempt to build
capacity in social enterprises, and
we’ve noticed a predictable pattern
has emerged. We refer to it as the
self-fulfilling prophecy.
As with most things in life worldview is critical. In the area of capacity
building for social enterprises, we have too many intermediaries and
funders who, when push comes to shove, don’t believe that blended
value (delivering both social and financial returns) is possible.
If I had a dollar for every time I heard “there’s no commercial model for
this kind of work”, “it’s about highlighting the social return in order to
compensate for the lack of financial return” or “if it was making a financial
return I would question the social”, I would be a very wealthy woman!
Please contact me if you want my bank details in order to make a direct
deposit for every time you uttered those words!
If you start from the belief that there is no business model when “doing
good”, you’re going to design a business that is not commercially sustainable
and is continually grant reliant. Word of warning, you get what
you design for!
If you fundamentally believe – like we do at TDi – that blended value is
not only possible but also preferable, you will build a business model
that allows you to generate both social and financial return.
It might mean your business looks different to how you first pictured it.
It might mean you need to build a business five (or fifty) times the size
you initially planned in order to become commercially sustainable, while
delivering the level of social support for your beneficiaries
It will clearly take time to achieve sustainability, during which time grants,
subsidies and other forms of support will be necessary and completely
appropriate.
We use the business model canvas as the foundation on which we conceptualise,
assess, refine and ultimately build Investable Social Enterprises
(ISEs). If you’re stuck in an approach that keeps delivering the same
results; if you’re stuck in an exhausting and stressful cycle of grant reliance;
I’d encourage you to consider a different approach. Question your
worldview; challenge your underlying belief that there isn’t a different
way of doing things.
If you really don’t believe you could possibly find a commercial model, I
challenge you to enrol in a TDi business model workshop and let us help
you design one. I bet there’s one there.

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FAILING TO NAME
THE ‘REAL’ PROBLEM
At TDi we firmly believe that unless
we accurately name the problems we
seek to address we cannot hope to
design effective solutions. So, what
is the real problem when it comes to
the persistent gap between social
enterprise and impact investment?
We believe that everyone has the responsibility to deal with the social or
environmental problems we face in society. Even though most people would
agree with that, discussions quickly descend into there being two types of
organisations that change the world. It becomes a debate about not for profit
versus for profit; a simplistic understanding says not for profits “do good” and
for profits “make money”. What we really need is a type of organisation that is
as powerful or influential as a for profit, but also delivers the “good” of a not for
profit.
To achieve this, TDi believe we need to take a marketplace approach as we
seek to build models that can crack some of these big complex problems.
Obviously, we are guaranteed to come up against significant resistance.
Paul Steele, TDi Co-Founder, shares a the story of the platypus as an example
of the level of doubt we come up against when sharing our vision for a
marketplace approach.
When the Australian platypus was first encountered by Europeans in 1798 they
thought it was a hoax. It was thought that somebody had sewn a duck’s beak
onto the body of a beaver-like animal! In the first description of the animal
in the Naturalist’s Miscellany in 1799, George Shaw stated it was impossible
not to entertain doubts as to its genuine nature. Helping people think about
commercial approaches to making the world a better place feels a lot like trying
to convince a skeptical British Scientist that the platypus is real – people always
seem to “entertain doubts as to its genuine nature”!
Our experience has shown time and again that the real problem is one of
mindset. The ethos we take to our work at TDi and Benefit Capital is built on a
belief in blended value.
Blended value is the delivery of both a social or environmental return AND a
financial return. It’s a win-win that does not require compromise on either side
of the social or financial equation.
Our fundamental belief that we can design solutions and business models
that deliver blended value is an approach hat is actually quite different to most
in the sector. Typically the social sector – including those who engage as
service providers, intermediaries, not-for-profits, Government, philanthropy and
investors – are still engaging with social enterprise and impact investment as a
game of “finance first” or “impact first”. This is not the way TDi opperates.
Some say ‘impact investment is about highlighting the social return to
compensate for the lack of financial return, and increase fundraising.’ These
descriptions couldn’t be more unhelpful or detrimental to all of us in the sector.
Our approach to blended value shapes everything we do – the way we
approach our work, the starting point, the design principle and ultimately what
we produce.

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Three Unhelpful Obsessions
If the macro problem is, “How do we solve social and environmental challenges
with a marketplace approach?” there are three unhelpful obsessions that are
read as “the problem” and subsequently lead to unsatisfying outcomes.
Finance First
A ‘Finance First’ approach takes the macro problem and names the issue as
“Money”. This leads to “If I had more money I could…”, with the solution then
being articulated as “Find more money”! This has led to solution designs like
the Social Enterprise Development and Investment Funds (SEDIF).
In the case of SEDIF, by focusing on ‘Finance First’ it failed to address the fact
that there was a need for investable business models in the social enterprise
sector, and that the establishment of the Funds would not address this. It heard
a response that said: “Access to capital is the biggest challenge for social
enterprises” and it failed to recognise that the important word in the response
was ‘access’. The problem wasn’t that there wasn’t capital out there, the
problem was social enterprises couldn’t access it. So the question needed to
then be “Why?” Asking why a few more times would lead to the real problem…
Profit Focus
The ‘Profit Focus’ takes us back to the scarcity mindset and silo mentality that
exists. For some reason we in the social sector are so hung up on the notion
of profit, yet so often we miss the point entirely due to our short-sighted and
ideologically driven aversion to profit. Definitions have a lot to answer for in this
regard. One of TDi’s pet hates is the focus on the percentage of profit used
for reinvestment or redistribution, and there are a few problems with this ‘profit
focus’.
A few problems with a Profit Focus:
• Profit is a small part of the overall business for the vast majority. We want
to focus on all of the money spent in the business, not simply what is done
with the profits.
• Profit pays for capital. Most people engaging with this topic and focusing
on profit actually don’t understand where profit goes or what it enables.
For a large organisation such as the National Australia Bank (NAB), if you
examined where the bulk of profit distribution actually flowed it is into “mum
and dad investors” often in the form of super fund investments. Our super
fund investments making returns that enable us to cover the costs of postretirement
life seems like an important social issue!
• Profit is easily manipulated so purely relying on the reinvestment or
redistribution of profit as the way in which a business model “does good”
dramatically undermines your ability to create social change.
• Redistribution of profits to “a good cause” is just prescribed philanthropy.
We want more than that! We want integrated business models, not
token percentages or side projects disconnected from the intent of the
organisation.
• Finally, most businesses need profits re-invested into their own business, so
using this as a distinguishing feature of a social enterprise is unhelpful.

36

37
Social Focus
The ‘Social Focus’, or simply focusing on the ‘good’ we do, is prevalent
throughout the sector. We often hear people say things like, “there is no
business model for doing good”, or “there just isn’t a commercial model in what
we do”. For too long we in the social sector have let ourselves off the hook too
easily on this front. We hide behind how things have always been done and
don’t do the necessary work to uncover different approaches and models that
may allow us to produce blended value. At TDi we will work a business model
until we find a way and we would love to see more people doing that also.
Too often people breeze straight passed the fact that costs far exceed the
revenue streams in their business model because they tell themselves – or are
told by their advisors – that because they’re “doing good” SOMEONE will give
them money to plug that gap. This is not a wise way to build your organisation.
It certainly isn’t sustainable, nor does it set you up to have confidence in your
organisation’s ability to deliver the social or environmental outcomes you seek
to deliver.
Grant funding, subsidies and philanthropy are all good things needed at certain
stages of development and for certain issues we face in society. For too long
though they have been used as a life support, rather than a foundation or
leg up. Used correctly, funding can be massively leveraged through building
capacity and then enabling organisations to access private capital (that they
can now pay for). So, we get distracted. Distracted by our focus on the money
(Finance First), distracted by our focus on the profit (Profit Focus), and distracted
by our focus on the good (Social Focus). These distractions often pull us away
from engaging the real problem. A mindset issue is at the heart here, with a
need to truly believe in blended value.
We now know that the platypus is real! At TDi we exist to grow Investable
Social Enterprises (ISEs). For us, demonstrating that blended value is a reality
is our mission. The solution is to design and build Investable Business Models.
Sustainable, potentially scalable models that can solve the challenge you seek
to address become possible when you take a blended value mindset and let it
shape, influence and inform the design and implementation of your work.

38
Our journey over the last few years has been one of growth and challenge. All
of the hurdles that come up when you’re trying to grow a new business were
present. All of the extra hurdles that come from trying to build a sustainable
social enterprise were present.
Like many start up organisations we have been trying to take the intuitive
practise of a small group and tease it out into articulated method. Anyone who
has tried to do that knows how excruciating that can be, for all involved!
With the benefit of sitting here, at the end of 2015, I can honestly say that
the hard work has been worth it. We have in no way “arrived” at our final
destination but we have built something extraordinary with a solid foundation.
We now have an exceptional Deputy-CEO, Annie Smits, who is helping take
TDi to the next level; and we are about to embark on a rapid expansion of our
team that will see our capacity and reach massively enhanced.
We made an intentional decision at the start of our two-year pilot that we would
go “head down, bum up” and focus on generating results rather than making
press releases and shouting from the roof tops about our work. We are after
all Practitioners so that sat well with our nature to step into action and get our
hands dirty. There are pros and cons to the approach we chose to take. As
I explain in some of these short pieces in this section we are beginning to
move into a phase of more intentionally telling our story and learning how to
communicate better.
That too will be a journey, but hopefully even in reading through this little book,
TDi: The First Chapter, you will get a bit more insight into us and our approach
than you had before.

39

40
THE BUCK STOPS
WITH ME (AND
OTHER THINGS
I’VE LEARNT FROM
OPRAH)
Communicating my vision for TDi
has been more challenging than
I expected. When we decided to
develop TDi we knew it wouldn’t
be an easy task. As a “parallel
entrepreneur” Paul has a reputation
– a deserved one – for great
success in building capacity in social
enterprises. TDi aims to replicate
and scale a combination of his
approach and the Method of my
husband – Brad Graham – and I, but
for this to happen we needed to find
a way to clearly articulate and make
explicit what we’ve been
doing intuitively.
I’ve spent the last few years translating the ideas and practices that
predominantly lived in the minds of three people – My beloved husband Brad,
Paul and myselft– and developing it into a first draft of our method at TDi.
Something that could then be transferred to our highly capable team so they
could put it into practice, as well as helping me refine and shape it so we can
reliably build Investible Social Enterprises (ISEs).
A year or so into our two-year pilot, I was forced to accept that I hadn’t done
what I set out to do. I hadn’t articulated what TDi actually was and how I wanted
the team to engage. We’re moving past that point now, fortunately, but I thought
it might be helpful to share what was going through my mind and the approach
I have ended up taking.
I saw people struggling, in what to them felt like a vacuum. I saw them fall back
into how they’d operated in past roles with other organisations. I felt their anger
and frustration as they expressed the fact that they didn’t know what they were
supposed to do and weren’t clear on how to take the information they had from
me and do the two things I needed:
1. Drill it down to the delivery of effective sessions with incubatees; and
2. Lift it up to understand and communicate to others how it fitted into a
broader vision for TDi.
I was desperately trying to figure out what I was doing wrong. I wanted to
better communicate my vision, offering enough detail to encourage people to
step into the unknown. The work we were doing had a lot of grey area. I had
to ensure my articulation stayed at the level of agile method and not detailed
process, leaving enough room for the ‘white space’ that Brad was always
talking about. So, in amongst this swirling mess of thoughts, disappointment,
frustration and searching I turned to Oprah!
You may be surprised to hear I’m a huge fan of Oprah. My respect and
appreciation for her basically boils down to the uplifting nature of the work
she does and the fact that after engaging with anything she puts out into the
world I feel a beautiful combination of encouragement and challenge. I like that
feeling…
In her “Oprah Builds a Network” special I was struck by the following quote:
“Being a CEO means the buck stops with you… Your energy, your essence…
cannot be instilled unless you’re actually there.”
Oprah, thank you for the wake up call.
I am in fact too busy, running too fast and trying to do too many things to be
able to be fully present in order to instil my energy, essence and vision for
TDi. I have to clear more space in my diary, be on the ground modelling and
communicating what this is and what it can be.

41
From the beginning we had talked about Paul and I needing to drive this long
enough that we could instil the DNA we wanted to create for TDi. After years
of smashing my head against a brick wall to fund this thing and get it off the
ground we are now in that position and it’s time to “instil the DNA”!
So, just as Oprah did with OWN (Oprah Winfrey Network) – she has now turned
that sinking ship around and not only changed course and fixed the leak but
has managed to achieve a profit – I plan on intentionally going back to the
basics. I am going to be present. I will aim to model and communicate my vision
for what TDi is and what I believe it can be. I will instill my energy and essence
by actually being on the ground more in these crucial early days.
For what it’s worth, despite this realisation it is an ongoing struggle to clear
more space in my crazy diary, but I am conscious of it and I’m trying!
We hope that what we, at TDi, put out into the world acts as a prompt to new
conversations and a challenge for what we believe Investable Social Enterprise
and Impact Investment can help bring about in the world. Beginning to better
communicate our Method and learnings is the next step in us attempting to
articulate what has been intuitive to us and help transfer some of the DNA!
At the heart of what I’m trying to instil in TDi’s DNA is the belief in Blended
Value. A belief that we can in fact do good and make money; and that in the
process we can tap private capital for public good and genuinely have a
chance at cracking the big problems that plague society.
‘You have to be in it first, then you
have to empower everybody else
to at least know what the vision is in
such a way that they can execute it.’
— Oprah Winfrey
CEO, The Oprah Winfrey Network

42

43
WHAT DOES
GRASSHOPPER
SOCCER HAVE TO
DO WITH TDI?
Sometimes it’s hard to completely
disengage from work. Sitting at
Grasshopper Soccer, watching
my boys run in circles, I started
noting parallels between being a
kid’s soccer coach and generating
Investable Social Enterprises (ISEs).
Each coach ran their session their own way, using different techniques to
interact with kids as young as two, trying to teach them the crucial skills they’ll
need to play the game well… although that may be a few years down the track
for the two year olds! As I watched I began to notice common elements across
all their styles, and as I named each one I realised they applied equally to
what we’re trying to do at TDi. Who knew there’d be a connection between
grasshopper soccer and TDi?
No matter what teaching style and techniques they use, all soccer coaches
need the following knowledge:
• To know how to play the game they’re training the kids to play (that may
seem obvious, but sometimes the obvious needs to be stated)
• To know the skills a player needs to master in order to play well.
On top of that, the soccer program as a whole needs to make sure the
following is done:
• Identify activities, drills and techniques that will help develop the necessary
skills kids need to play soccer
• Teach coaches the activities, drills etc so that they:
• Know the desired outcome
• Know the rules
• Use the same language.
With those three important aspects in place there can be variance in the way
the coaches develop their own specific way to explain and teach.
How does this apply to TDi? Our ‘coaches’ need the following:
• Know what an Investable Social Enterprise (ISE) is!
• Understand what investors are looking for
• Know the necessary elements in a functioning business
• Know what tools and method can help grow ISEs.
And TDi’s programs need to:
• Identify ways to teach these skills
• Train coaches so they are equipped to teach others and are clear on:
• Desired outcome
• Rules
• Language.
With those three important aspects in place there can be variance in the way
TDi ‘coaches’ develop their own specific approach to explain and teach.
Well, soccer is over for another week and it’s time to go to Hungry Jack’s for
ice-cream. I’ve had some insight that I now need to reflect on and work into my
practice as we build TDi.
We love the idea of “simplicity on
the other side of complexity” (Oliver
Wendell Holmes, Jr). That’s where I
want to get my articulation of TDi.
I’ve got a long way to go but I’m
going to try.
We’re massive fans of Lencioni and his approach to organisational health. He
constantly reminds us of the need to have clarity and to then over-communicate
that clarity. This is something I personally want to get better at doing. TDi has
lived in my head and in the conversations and practices of a small group of
people for years now. That is no longer appropriate. It’s time to articulate it
better and to then over communicate clarity.

44

45
THE
WORK

46
WHAT DID WE
WANT TO ACHIEVE?
At The Difference Incubator (TDi)
we grow Investable Social
Enterprises (ISEs). Our focus is
on helping bridge the gap between
social enterprises and impact
investors through targeted capacity
building. We believe that there is
capital in the market that can be used
for good if only we begin to develop
business models that can pay for
capital while delivering measurable
social benefits.

47
What we set out to do…
Our vision for TDi was to create
a pipeline of enterprises able to
engage with impact investors and
deliver blended value returns, both
social and financial. Part of building
this pipeline was actually about
demonstrating that these kinds of
deals are actually possible. We knew
from experience that a massive part
of the lack of pipeline was related
to a shortage of case studies and a
mindset that questioned if you could
actually do good and make money!
We also had a strong focus on
building a replicable model. We
didn’t want others who were trying to
build pipeline to have to start from a
blank sheet of paper but instead be
able to share our learnings and over
time develop ways in which others
could use our Method.
What we did…
We realised early that we needed
to distinguish between a standard
social enterprise (which for those in
Australia who are engaging in the
space is still typically seen as a grant
reliant not-for-profit with some kind
of trading arm that reinvests profits)
and the types of enterprises we were
seeking to build.
We articulated our role as growing
Investable Social Enterprises
(ISEs), which we have got better at
describing over time. The vision of
creating pipeline through growing
ISEs has never wavered although
the ways in which we engage have
changed significantly as a response
to market and customer demands.
Our replicable model has begun
to take shape with a first iteration
of this in early stages in Singapore.
We have also built partnerships with
practitioners in the U.S., Egypt and
New Zealand. A central part of our
work with the Department of Foreign
Affairs and Trade (DFAT) also focuses
on training locals in the Pacific to use
our Methodology.

48
EVOLUTION
OF MODEL
We initially pictured ‘Incubation’ as
our central offering. A long-term,
relational program to grow Investable
Social Enterprises (ISEs). We quickly
found that a model that only allowed
further engagement with enterprises
that could become an ‘Incubatee’
was too limiting and didn’t suit the
immaturity of the market.
In response we broadened our
offering to include not only the
Business Model Workshops and
Incubation but also a Club (casual
network), Coaching (cheaper 1-1
sessions), Clinics (group delivery of
key areas of content) and Consulting
(bespoke individual sessions or
programs).
We articulated this offering and the
ways to engage with TDi through
the table shown.
The expanded offering for social
enterprises was a wonderful first
step and increased the number of
engagements we were having and
allowed us to test the effectiveness
of different delivery modes. We
landed on a much clearer picture
of what was needed and what
was working. Since then we have
refined our offering further to focus
on the foundational skill of Business
Modeling, our Two Feet Program
(a six month fortnightly workshop
series), Consulting sessions, and our
Investment Readiness Program.
HOW CAN YOUR SOCIAL ENTERPRISE ENGAGE WITH TDi?
CLUB
Network regularly
with other social
enterpreneurs
COACH
Catch-up with
a social enterprise
expert 1-on-1
CLINICS
Participate in a learning
session to develop
a specific social
enterprise skill set
CONSULTING
Engagae a TDi
team to help address
a specific social
enterprise problem
INCUBATION
Become an Investable
Social Enterprise
(ISE) with the help
of a TDi team
WHAT
WHAT
WHAT
WHAT
WHAT
Casual, regular
networking events with
other social enterpreneurs
Personal training with
TDi social enterprise
experts
Periodically scheduled
Bootcamp style sessions
on a range of topics crucial
to the development of a
social enterprise
Tailored sessions with
a custom TDi team
gathered to address
a specific need
Regular, methodical sessions
that cover everything a
social enterprise needs to
become investable
COMMITMENT
COMMITMENT
COMMITMENT
COMMITMENT
COMMITMENT
Bi-monthly networking
get together
Flexible, 1-on-1 sessions
that let you go at your
own pace
Varies by topic, usually
1 -2 days
Delivery is flexible with
each engagement
Approximately 4hrs per
week over 18 months
WHO
WHO
WHO
WHO
WHO
All social enterprises,
particularly those starting
their journey
All social enterprises,
especially those still
considering their business
model and/or market entry
options
Individuals and teams
looking to learn ‘how’ as
well as the immediate
‘what’ of all things social
enterprise
Social enterprises with
specific problems that
require solutions on a
deadline
Social enterprises that
have a scalable idea and
require capital alligned to
TDi expectations
COST
COST
COST
COST
COST
Per session
Hourly rate
Per clinic
Per consulting engagement
Annual incubation fee
CAPITAL
CAPITAL
CAPITAL
CAPITAL
CAPITAL
Not required; this is a
chance to meet and
network with people
active in socila enterprise
Not required; this is a selfpaced
program that may
not result in capital raise
Not required; all social
enterprises will benefit
from Clinics, even if they
do not need capital to
scale
Varies depending on the
session
Yes; incubation is only for
enterprises that require a
$500k+ capital investment
within a 24 month period

49
2
4
1
3
Business Model Workshops
Two Feet Program
Consulting
Investment Readiness Program
The business model canvas is
a foundational tool in all of our
work at TDi. We run Business
Model Workshops across the
country to teach enterprises how
to use the Canvas, gain clarity
and create stronger, sustainable
businesses.
Over a six-month period we work
with social enterprises to further
develop their business model
and critical skills and disciplines
to running their enterprise and
becoming investable.
Tailored sessions with a custom TDi
team to address a specific need
within an organisation. Consulting
sessions act as a reality check
providing clarity on the gaps that
exist in the business and financial
models as well as outlining next
steps needed to begin addressing
the gaps.
Bespoke programs for
organisations with a scalable
model requiring TDi’s capital
investment in the next 12-
18 months. The Investment
Readiness Program helps
consolidate and grow
Investable Social Enterprises
with strong Mission, Model and
Management.

50
YOUTUBE
In response to the immaturity of the
market and the massive need to
address the mismatch between the
current state of social enterprise and
where it needs to be to connect with
impact investment we have begun
to explore a TDi YouTube channel
as a platform for education and
awareness building.
Our YouTube channel allows us to
“speak to” those interested in this
area without the limitation of us
needing to have enough time in our
diary to sit down physically with each
of them and have a conversation.
This conversational approach is
far more appropriate for our style
of engagement and brings a more
human feel to our online presence
rather than simply having written up
case studies or research papers for
people to read.
We have filmed fifty short videos
covering a range of topics from
lighthearted snap shots on “How To
Piss Off An Investor”, to a series on
“The Delusional Social Entrepreneur”.
We explain the difference between
types of investments, talk about
the issues of scale and the
challenges that come with it, and
discuss important topics like impact
measurement.
With some quality content as a base
we look forward to strengthening
our online presence over time and
becoming the “go to” place for
learning about growing an Investable
Social Enterprise.

51
EDUCATION AND
AWARENESS
BUILDING
Education and Awareness Building
We have had an increased focus
on education and awareness
building in the sector over the last
twelve months. There is not enough
understanding or assistance in the
market for those truly seeking to
build sustainable business models
and work towards investability
in the social sector. Most of the
capacity building in the sector still
results in grant-reliant not-for-profit
organisations who cannot attract the
kind of capital they need.
We became aware very quickly that
we couldn’t wait for earlier stage
programs to deliver us enterprises
with robust business models that
we could then prepare for scale,
replication or investment. As we
often say to organisations who come
to us, investment does not “fill a
funding gap” in your current model.
Investment isn’t a magic answer to
a business model that doesn’t work.
If your business is bleeding without
investment and we scale it up, or
pump investment capital into it, we
won’t stop the bleed we will simply
make you hemorrhage!
For this reason our approach is
to explain investment, explain the
centrality of blended value and the
foundational importance of business
modeling. Our approach needs to
be part of the design process right
at the start, not added on as an
after thought just before taking on
investment.

52
EARNED INCOME
AND LEVERAGE
The leverage story we are creating
at TDi around the impact of catalytic
granting we receive is one we are
very proud of. During our two-year
pilot we received $900k of grants.
Through our capacity building work
during that time we placed over
$6.5m of investment capital into the
social enterprises we worked with.
We have also made great progress
in building a sustainable business
model for TDi. Our initial projections
were that it would take 5-7 years
to reach sustainability. In our first
year we achieved 50% earned
revenue and in our second year we
reached 65%. We are building a solid
foundation on which to continue to
grow our business. This is rare for
an intermediary and it positions us
powerfully to grow and deliver more
education and awareness building
that the sector needs so badly as
well as our powerful capacity building
programs.
Our approach in building our
own business model has not only
positioned us well to provide
ongoing support for the sector it
has also helped our customers,
social enterprises, relate to us better
because they see our genuine
attempt to practice what we preach!

53

54
‘One of the things I found with
TDi was the way that they force
you to ask yourself those slightly
difficult questions where maybe you
think you know the answer but by
prodding and probing and asking
more questions you realise there
is more to it than you thought.
— Peter Allen, CEO
Ethical Property Australia

55

56
GROWING
CLARITY AROUND
COMMUNICATING
WHAT AN INVESTABLE
SOCIAL ENTERPRISE IS
TDi’s distinction between a social
enterprise and an Investable Social
Enterprise (ISE) is a really important
one. The organisations we are
growing at TDi are very different to
what most people are building when
they establish a social enterprise
in Australia. Current approaches to
social enterprise keep it niche and
limit the capital organisations can
access and ultimately the type and
scale of impact they can help create.
We initially articulated the features of
an Investable Social Enterprise (ISE)
with a five-part diagram identifying
the key areas that needed to be
present for investability. This was
incredibly well received and helped
focus conversations on areas
enterprises needed to build capacity.
First articulation of the features of an
ISE in 2014:
Refined articulation in 2015
We then went on to refine the model
to group those five areas in to three
overarching categories of Mission,
Model and Management. These
three make up the current articulation
of an ISE as described below.
Insert the three M’s diagram (sorry!
You can pick which colour you use
at least, that might make it a bit more
bearable!)
Mission
Similar to a standard social
enterprise, an ISE must have a social
or environmental mission at the core
of what it does.
Mission is not about legal structure;
we are agnostic to legal structure.
Instead, mission speaks to the driving
force or intention of the business
and why it exists, or what it seeks to
create in the world.
We favour integrated models where
the mission of the organisation
is realised directly through the
business, not simply funded by the
profits of the business.
Model
An ISE’s business model needs
to be more than just sustainable.
While sustainability is enough for a
standard social enterprise, an ISE’s
model must be commercially viable,
as the organisation needs to be able
to service or repay the investment
capital it takes on.

57
Management
To appeal to investors in the area
of management, an ISE must have
the following three features: track
record, a passionate and capable
management team, and a willingness
to be held accountable for social and
financial returns.
Track Record relates to two things:
their mission and their financial
history. Does the organisation have
a proven history of delivering quality
products or services that relate to
their Mission?
And, have they demonstrated their
ability to deliver financially? A merger
or acquisition can be very powerful
for a social enterprise if you buy
a business that has cash flow and
historical financial data you can
then point to as the basis of future
financial projections. This really helps
strengthen the investment case.
However, we understand that
historical financial track record is not
always an option in a new emerging
market. Piloting and prototyping are
other approaches we use to help
build this whilst demonstrating that
we have tested assumptions, even
if at a small scale.
The existence of a passionate and
capable management team is a
critical feature of an ISE. People
make or break a deal; a powerful
combination of passion and capability
helps provide the assurance
investors need. We can guarantee
that things will not always go to plan,
so having a team who are equipped
and agile enough to adjust and react
well to anything that comes their way
is imperative.
A willingness to be held accountable
for social and financial returns is
the way in which management sets
an investment in their company
apart from a standard investment. If
we look at the definition of impact
investment the two critical words
are the “intentional” nature of the
investment and the “measurability”
of the investment in relation to the
social or environmental impact.
Management’s willingness to
articulate the desired social
outcomes of their organisation, as
well as the measures or metrics they
will use to evaluate their success,
positions them well to be able to
engage with impact investors.
The focus is set on community as
we believe there to be a critical
distinction between a team and the
individual. The right mix here can
actually make an impact investment
less risky than a standard investment
because of the passion and
commitment of a group to deliver the
Blended Value returns.
In this category you want to see
alignment between the Mission, the
Model and the ability of Management
to deliver on the Mission and Model.

58
AN INTERVIEW
WITH RIC BENJAMIN
FROM GOODSYSTEMS
Why did you first
come to TDi?
I came to TDi just as TDi was launching. A friend recommended to me that
I meet with Paul Steele as he believed that we were both, independently,
looking to solve the same problem - how to help the Not For Profit and Social
Enterprise sector manage their back office functions better. The TDi/Donkey
Wheel Foundation project was called Streamlined and after meeting with
Paul it was agreed that I would work with the Streamlined project to see what
synergies there were.
Within a short period of time I recommended that Streamline be merged with
my initiative (which became GoodSystems) because it had a more mature
software platform for development - with foundation applications of Finance,
CRM/Fundraising, Project Management and Human Resources. After the
merger, the new TDi became two things to GoodSystems: 1) a small equity
holder with myself and 2 other investors; and 2) the incubator to help develop
and refine the GoodSystems’ business model and strategy.
—
What has the journey
been like so far?
This has been a great experience for myself and GoodSystems. As this is
my first start up, it has been very important to have a safe place to challenge
and be challenged across all elements of the start up journey. Through TDi’s
process we networked with other social enterprises, met thought leaders
and experienced impact investors - all of which helped shape and mature
GoodSystems thinking, our go to market strategy and of course beginning the
process of taking on investment beyond the initial ‘friends & family’.
—
Where were you before,
where are you now and
where would you like to
be in the next few years
– what is the effect of
investment on this plan?
This is my first start up, so the past 18 months has been all about launching
GoodSystems. I’m very pleased to say that as of October 2015, GoodSystems
has its first customer! The challenge is of course to get the next and the next.
For GoodSystems to reach viability and then grow will mean an increase in
marketing activities and an investment in the customer support infrastructure,
and this is where a new round of investment will be critical.

59
How much investment
did you take on?
Our initial investment in cash and in-kind was around $340,000 and we also
have taken on $90,000 in debt
—
What are you hoping
the social impact will be?
GoodSystems has a unique proposition - a complete back office platform for
the NFP - so we believe our impact will be to help organisations become more
collaborative, efficient, effective and accountable to stakeholders and funders.
We see these things as critical for NFPs as the health of their back office
functions is one half of any social impact story.
—
What changes are
in progress?
As a software company we are always making enhancements and adding
features to meet our customer’s needs, however we are thrilled to be
undertaking a major piece of work that will integrate Microsoft Office365 into
GoodSystems. This is great news for NFPs as both the O365 and Google Apps
for Work are free to registered charities and they will now both be integrated
into the GoodSystems’ applications.
—
What are your
successes so far?
Our first success was that we engaged a group of NFPs to work with us
between Nov 2014 and Sept 2015 to help develop this fit-for-purpose
application suite. Through their commitment to monthly workshops and
feedback sessions we were able to incorporate all their critical business
processes into GoodSystems. The next success was having version 1 ready
for market and of course the most important success so far is securing our first
customer. We see 2016 as a year of hard work, fun and great reward for the
team at GoodSystems, our investors and of course customers.

60
‘Often we are unable to provide
capital to social enterprises if they
are missing the financial rigour that
underpins a fantastic social impact
business idea. We would like to
see more social enterprises that
are investor-ready, which is why
NAB is proud to support The
Difference Incubator.’
— Corinne Proske
Head of Community
Finance and Develpment, NAB,
Director of Government, Education
and Community, VIC

61

62
STREAT is a social enterprise
that provides homeless youth
with the life-skills, work
experience and training to start
a career in hospitality.
WHO THEY ARE
The enterprise’s vision is to
stop youth homelessness and
disadvantage, one mouthful at a
time! They offer disadvantaged youth
aged 16-25 a supported pathway
from the street to a sustainable
livelihood.
The ten-year goal is to help one
young person every single mealtime.
That’s enabling 1095 youth each year
to thrive in all parts of their lives –
a stable self, stable job and a
stable home.
THE CHALLENGE
‘When we arrived at donkey wheel
house zero per cent of our revenue
came from business operations, now
70 per cent of income comes from
the business and within two years it
will be 100 per cent’ says CEO, Bec
Scott. ‘We’ll be running 8 different
enterprises in a $5m business.’
WORKING WITH TDi
STREAT were the first social purpose
tenant at donkey wheel house where
TDi is based. By the end of their
first encounter Scott had asked Paul
Steele, TDi Co-Founder, to be her
mentor. ‘Paul and I clicked straight
away’, says Scott. ‘Scale was built
into STREAT’s DNA and we were
speaking the same language.’
Paul provided the support to model
STREAT’s growth options, educate
the board about impact investment
and brokered relationships with
potential investors.
‘Paul ran the process with a probono
law firm to create the new
entity for the first $300k equity
investment. Now we are working on
a $2.5m impact investment.’
SNAPSHOT —
STREAT

63
TDi’S PERSPECTIVE
STREAT was the first social
enterprise TDi worked with
intensively over 12 months to
prepare for investment. The STREAT
experience was fundamental to
developing the method which
underpins TDi’s current program.
‘There is a gap in the market
around the design of complex
social enterprise deals’, says Bessi
Graham, CEO of TDi. ‘We were able
to structure it – getting the right mix
of debt and equity, the positioning,
the model and bringing together the
investors.’
TDi has continued to work with
STREAT on the back of the first
$300k capital raise. ‘They’re
remarkable and have worked
incredibly hard to deliver’, says Bessi.
‘STREAT are in a very strong position
and we expect that they’ll no longer
need us once the second capital
raise is done and that is how it
should be.’
— Bessi Graham, CEO and Co-
Founder, The Difference Incubator

64
CERES Fair Food is an online
organic grocer and carbon neutral
food delivery service in Melbourne
that is helping to create healthier,
happier, and more secure local
food systems.
WHO THEY ARE
CERES Fair Food’s mission is to do
good at every part in the food chain;
Buy fair - buying food from local
farmers and grocery producers at fair
prices and stick with them season
after season.
Employ fair - giving asylum seekers
and new arrivals, who make up
around half of their 25 staff, that
crucial first job in Australia. Build
community - delivering food orders to
a network of 67 volunteer Food Host
pick-up points in neighbourhoods
across Melbourne.
THE CHALLENGE
To date CERES Fair Food has built a
fantastic track record as a revenue
generating social enterprise for
CERES, providing a third of their
income. But in order to achieve
broader social, environmental and
financial goals the business needs
to scale and expand its footprint
geographically.
Expansion would place strain on the
current organisational structures,
therefore requiring a dramatic
redesign in logistics, systems and
processes, in particular warehouse
operations and order fulfilment
capability.
TDi worked with CERES Fair Food
to prepare for investment that
would enable them to scale and
therefore increase our social and
environmental impact.
WORKING WITH TDi
CERES Fair Food represents a
beautiful potential case study for
the Impact Investment community,
because of the unique position their
business is in. As a well recognised
brand, with long-term connection with
the community and an established
operating business, CERES Fair
Food will provide an example of how
other community organisations can
retain their roots and mission while
becoming investable and scaling the
impact they have in the world.
TDi aimed to set up the broader
CERES business for ongoing
success, streamline future investment
opportunities and produce templates,
systems and processes that will
position us powerfully for the future.
SNAPSHOT —
CERES FAIR FOOD

65
TDi’S PERSPECTIVE
CERES Fair Food is a great example
of a business that can deliver
great results in its current stage,
but can do so much more whent it
works at scale. They have a strong
management team, solid track
record, and a large group of loyal,
happy customers.
TDi’s work is focusing on customer
acquisition and retention, as well as
designing new ways of tackling the
logistics issues that face any delivery
business. Investment can make this
possible, and there are a number of
options for making it work.
‘What I love about CERES Fair Food
is that you can see so much social
good coming from every single
purchase a customer makes.’
– Isaac Jeffries
Business Model Consultant, TDi

66
BUSINESS MODEL
WORKSHOPS
Our two-day Business Model
Workshops are our most popular
offering and are foundational in all
of our work. During our two-year
pilot over 150 social enterprises
participated in these workshops.
There is a growing trend to refer
to business models in the sector
but very few people are using the
business model canvas well.
Paul Steele refers to the canvas as
“deceptively simple” and in the way
most people try and teach it they
end up falling on the simplistic side
rather than the simple side. Our
workshop, and the way we train
people to use the canvas, is one of
our strongest contributions to the
market.
Business Modelling is a foundational
tool in all the capacity building work
we do. This workshop isn’t about
doing a one off completed canvas
for your business. Instead, during the
workshop entrepreneurs learn the
skill of business modelling.
We teach the key skills around
understanding your Value
Proposition, how to make decisions
around the critical aspects of the
best ways to deliver your value
proposition to your customer and
improve the financial sustainability of
your organisation.
All of these areas are consistent
gaps in the knowledge and current
business models in the social
enterprise sector and significantly
strengthen the organisations
we work with. At TDi we use the
Business Model Canvas to integrate
the social mission of the social
enterprises we work with into how
they run their organisations. This is
centred on one of our key mantras:
“You get what you design for.”
An integrated business model rarely
happens accidently – you need to
design and deliberately create a
business that delivers social and
financial returns simultaneously.
It’s not easy but it is the best and
most effective way to build a social
enterprise.
In our Business Model Workshops
we teach entrepreneurs about the
three thematic questions addressed
in the canvas:
1. What makes your product
appealing to your customer
group? (Desirability)
2. What has to be done behind
the scenes to make a desirable
product? (Feasability)
3. How does money enter and exit
the business? (Viability)
When you get all three of these
areas working together your
business becomes a powerful agent
for change, and has the ability to
scale.
‘As someone who didn’t know the
first thing about developing a social
enterprise business but was doing
my best to run one, tdi provided an
invaluable insight into the theory and
mechanics of creating a successful
model.’
– Past articipant
During our two-year pilot
over 150 social enterprises
participated in these
workshops.

67
TWO FEET
Over a 6-month period we work with
social enterprises to further develop
their business model and critical
skills and disciplines to running their
enterprise and becoming investable.
We have refined our capacity
building work over the years to
ensure that we address the current
market needs.
Our Two Feet Program is the most
effective way to begin building
capacity in the emerging social
enterprise market and provides
invaluable insight into potential future
Investable Social Enterprises (ISEs).
Two Feet is the starting point to
spotting winners!
To address some of the key needs
we have uncovered in social
enterprises over the years we have
developed our program to help them
“stand on their own two feet”.
Firstly, Two Feet helps build an
organisation’s understanding
and capacity on their journey to
becoming investable. Secondly,
for those social entrepreneurs
experiencing the age-old problem
of isolation, our program is designed
to help support and connect them
to others who are also working to
develop their organisations.
This six-month program is structured
into fortnightly group sessions and
a monthly one-on-one coaching
session. Together we explore the
key aspects that are needed in
order to grow an Investable Social
Enterprise (ISE). The topics we work
on include:
• Intent
• Theory of change
• Value Proposition
• Piloting and Prototyping
• Investment 101
• Social Outcomes Measurement
• Financial Modelling
• Funding Options
• Governance
• Branding and Marketing
• Whole of Enterprise reporting
• Pitching to investors
In 2016 we will be launching our
Two Feet Program in Sydney and
Brisbane in partnership with NAB.
This expansion will not only help
us gain visibility of enterprises in
different regions that we can assist
to become investable it will also help
us increase the base level capacity
of more enterprises as we attempt to
increase the maturity of the market.

68
CONSULTING
Our consulting work has become
very popular for those seeking to
have a team of TDi consultants
working with them one-on-one to
address specific needs within their
business.
An example of one of our most
popular consulting sessions is what
we call a SCUBA.
SCUBA consulting sessions have
become a popular session for those
who feel they are ready to take on
investment. These sessions not
only act as a reality check they also
provide clarity on the gaps that exist
in the business and financial models
as well as next steps the enterprise
needs to take to begin to address
these.
We have found these sessions allow
us to set a ‘gate’ or milestone for the
enterprise to work towards before
reengaging with us. This approach
is a better use of both organisations
time and money.
process is a necessary prerequisite
to undertaking a capital raise. We
provide a rigorous assessment of the
business and financial model to give
a realistic sense of an organisations
investment readiness.
A scuba session is designed as a
one-on-one where TDi dive into
an organisations business model
in more detail. Over two half-day
sessions we work with a social
enterprise using the business
model canvas to help them better
understand their customer, value
proposition and how that value
proposition is delivered to the
customer. We also do a high-level
dive into their financials.
At the end of this time enterprises
have a deeper understanding of
the strengths and weakness of their
model. They understand the gaps
and pathways to address these gaps
and also have a picture of what the
potential for impact investment is for
their organisation.
Developing a strategy, evaluating
options and executing a transaction
are tasks well outside the day-to-day
remit of running an enterprise. We
are here to provide expert guidance
through this process. For groups
looking to access impact investment
as a source of capital, the SCUBA

69
INVESTMENT
READINESS
PROGRAM
Our Investment Readiness Program is
for those we originally referred to as
Incubatees. This is the smallest group
of enterprises we work with but it
is the most intense work and it is at
the pointy end of actually getting an
enterprise to the point of investability.
This program is specifically tailored
for each enterprise and brings
together the appropriate TDi Method
and tools to help address, strengthen
and test the business, financial and
impact models of the business.
We are extremely selective about
who makes it into this category, as
we need to be confident that within
the next 12-18 months they will be
taking on investment of $500k or
more. We have a strong focus on
leverage and using any support
given to organisations at this stage in
a catalytic way to then access much
larger amounts of private capital.
Our success rate in this category
to date is 70% in terms of those we
have intensively worked with who
has successfully gone on to take on
investment. Not everyone is able to
make the transition to investability
and not every organisation that takes
on investment will go on to deliver
the blended value returns they
sought to achieve.
Failure is part of a pioneers journey
and at TDi we are very aware of
this and accept, even when it is
incredibly disappointing, that failure
comes with the territory. No matter
how hard we work we can’t always
control the outcomes achieved
through our work.
Our approach to capacity building
and technical assistance dramatically
increase the chances of an
enterprise landing at investability.
We focus on the need to provide
long-term, relational support to
organisations so that they can
not only increase their chance
of becoming investable but also
their ability to consistently deliver
blended value returns, both social
and financial, once they take on
investment.
This long-term and relational nature
is at the heart of true change and
the sustainability that we seek to
achieve.

70
Green Collect is a not-for-profit
social enterprise with a mission
to build inclusive workplaces that
create sustainable change in the
world.
WHO THEY ARE
Founded by husband and wife
team Darren Andrews and Sally
Quinn, almost a decade ago, Green
Collect specialises in ensuring that
e-waste, office supplies, hard rubbish
and clothing are reused, remade
(upcycled) or recycled. It runs a
regular collection service and two
retail stores in Melbourne.
Training and employment is also
offered to people facing multiple
barriers to work. It has employed
more than 100 people, providing a
flexible and inclusive workplace for
those affected by homelessness,
poor mental health and refugee
experiences.
THE CHALLENGE
Green Collect faces a financial
sustainability challenge, with 80
per cent of operating income is
generated from the business and 20
per cent comes from philanthropy
and grants. For several years they
have tried to close this gap without
success.
They approached TDi with the
goal of becoming a profitable,
independent business that continues
to deliver strongly on their desired
social and environmental outcomes.
WORKING WITH TDi
‘One of the great things about
working with TDi is having the
external recognition that we’ve
created something amazing,
with enormous potential, that
already demonstrates high social,
environmental and business
outcomes.’
TDi also brings confidence into
the mix – confidence to say ‘Yes to
scale, yes to profitability and yes to
increased impact’, Quinn says.
SNAPSHOT —
GREEN COLLECT

71
TDi’S PERSPECTIVE
TDi has given Green Collect the
tools to examine their current
business model and the vision to
expand operations by a factor of ten.
The intent behind why Green Collect
exists, its social mission and drivers,
is most essential to the business. By
placing equal value on social and
commercial outcomes TDi could
help Green Collect become an ISE
that generates good returns with a
high social impact.
‘When we worked with Green
Collect to identify its key drivers of
success and the best opportunity
for leverage, it became clear that
collections had the potential to
scale’.
— Bessi Graham, CEO and Co-
Founder, The Difference Incubator

72
‘Organisations like Green Collect
have a long history of doing this
really well and we want to support
organisations to build up the
commercial side of their business
operations so that they have the
necessary revenue to do both
sides - social and financial -
in more sustainable ways.’
— Bessi Graham, CEO
The Difference Incubator

73

74
Digital Storytellers’ mission is
to enable powerful storytelling
for impact. They believe in the
tremendous opportunity that social
technologies have made available
to them, and feel that now, more
than ever, is the time they can use
powerful stories to make a real
difference in the lives of others,
the wellbeing of our planet and
future generations.
WHO THEY ARE
Digital Storytellers is led by Mikey
Leung and Pete Dowson, and
consists of a passionate and driven
team of creatives who have come
together as a social enterprise to
catalyse change through the power
of storytelling.
With expertise in filmmaking,
video production, design, web
technologies, crowdsourcing and
social media, they help stories for
change come to life and reach wider
audiences in a number of ways.
They produce films, capture events,
enable event broadcasts and live
online participation, create platforms
necessary to support these. They
also run workshops and clinics that
help changemaking organisations
and individuals learn how to tell,
produce, and get their own stories
out in the world.
THE CHALLENGE
Their challenge is to develop a viable
business model that allows them to
meet both their social and financial
goals.
The changemaking and social
sector can be thin on budgets,
restricted by grant limitations, and
unable to predict when the next
round of funding might come
though. Many of their customers
are organisations that may also
have experienced funding cuts, or
are grassroots changemakers and
social entrepreneurs with little or no
funding.
There also isn’t full understanding
of the benefits that good digital
storytelling can bring and hence,
there is unwillingness to invest
budgets in digital storytelling.
WORKING WITH TDi
“As a young start-up social enterprise
experiencing massive growth,
we knew we needed to operate
differently yet had been struggling to
decide on how. Just one clinic with
TDi helped our team crystalise some
key insights around our market’s
needs and made us rethink how we
structured our offerings.”
As a result Digital Storytellers
have launched a new offering for
changemakers of all sizes to tell
powerful impact stories even on a
small budget, and have learnt that
unbundling their services makes
them more accessible.
“By ensuring that the organization is
constantly in the black, we empower
them to say yes to the right projects,
and start to increase the scale of
their operations. This ensures their
longevity, and enables them to tell
more and more fantastic stories.”
SNAPSHOT —
DIGITAL STORYTELLERS

75
TDi’S PERSPECTIVE
Digital Storytellers initially worked
with TDi as a partner, creating
stunning video case studies on some
of the social enterprises they work
with. “From our perspective, the
challenge was to restructure their
pricing options, which enables them
to take on a wider range of projects
and still keep themselves financially
sustainable,” says Isaac Jeffries.
“We want to build a system that fits
with a range of different budgets,
whilst always ensuring their
customers are delighted. The team
always go above and beyond, and
the response from customers is
excellent, although there comes a
point where over-delivering harms
your long term viability.”
This involves designing a new
financial model, one that consistently
generates a surplus. Many social
enterprises live with constant stress
and fear over their financial health,
making it hard to focus on the
opportunities in front of them.

76
NATIONAL
EXPANSION
Based on our success in working
with hundreds of social enterprises
during our first two-year pilot TDi are
expanding our National presence in
partnership with NAB.
In 2016 our Business Model
Workshops and Two Feet Program
will be run in Melbourne, Sydney
and Brisbane. This expansion will
allow us to gain visibility of a much
broader range of enterprises and
hopefully increase our pipeline for
our Investment Readiness Program.
In anticipation of this expansion
we ran a campaign with NAB in
October 2015 that involved a National
Roadshow. Over a two-week period
TDi performed a high-level “triage”
of 60 enterprises across Australia to
assess where they were at on their
journey towards investability and then
outline next steps for them as they
continued to grow.
With our growing reputation and the
results that the organisations we work
with are achieving we look forward
to further expansion over the coming
years.

77
INTERNATIONAL
EXPANSION
The result of our hard work now
sees us rapidly expanding our team,
launching TDi Singapore and being
actively engaged in a total of 10
markets internationally where our
method and business model are
playing an influential role (Australia,
New Zealand, the U.K., the U.S.,
Singapore, Egypt, Tonga, Samoa,
Vanuatu and India).
Our work with the Department of
Foreign Affairs and Trade (DFAT) is
a great example of the replicability
of our Method. After a long period
of engagement with DFAT we have
embarked on a pilot project in the
Pacific.
Our Approach in the Pacific:
The most effective and proven way to
reduce global poverty is to promote
sustainable economic growth. Our
experience at TDi demonstrates
that to bridge the gap from aid to
trade we need to develop investable
enterprises able to attract capital and
move away from grant reliance.
Our approach focuses on identifying
and developing small business in the
private sector that will in turn lead to
economic growth and development
in the region. We test and scale
promising business approaches.
Given the recent changes to
Australia’s Aid program, which place
stronger emphasis on building
the capacity of the private sector
within developing countries, there
are strong links between the aims
of the Department and TDi’s work.
Our approach will help ensure that
funds provided have the most impact
on development outcomes, that
enterprise opportunities in the Pacific
region are built on solid business,
financial and operational models, and
that aid is used to leverage long-term
investment and sustainable business
outcomes.
We look forward to strengthening our
international presence in the next
chapter of TDi’s development as we
continue to develop and refine our
Method.

78
‘One thing, and I tell TDi on a
regular basis, is we need more
of you. If I could have a TDi in
every capital city, to be able to
harness all of those enterprises and
entrepreneurs with all those great
ideas, it would be amazing.’
— Corinne Proske
Head of Community
Finance and Develpment, NAB,
Director of Government, Education
and Community, VIC

79

80
Team Wild runs a program to
support disenfranchised youth in
Cairns aimed to reduce recidivism
amongst some of Queensland’s
most challenging young offenders.
WHO THEY ARE
David Jackson, CEO of Team Wild,
has a background in business
management and yachting while
General Manager, Scott White, is
experienced in running outdoor
youth outreach programs. Both men
and their team are committed to
creating alternative pathways for
young people.
Of the 56 young offenders, who took
part on their program in 2012, 48
have remained offence free, while
the other eight have significantly
reduced their contact with police.
THE CHALLENGE
Team Wild lost its State Government
funding in 2012 and within six months
youth crime in Cairns had spiked by
30 per cent.
The purchase of a tourism business
gave the organisation a means to
transition to a sustainable footing,
independent of government funds.
With TDi’s help Team Wild joined with
a group of impact investors to buy
the business that will fund their ‘Right
of Passage Entitlements’ (ROPE)
program on an ongoing basis.
WORKING WITH TDi
‘Without TDi, Team Wild wouldn’t
exist’, says David Jackson. ‘We
are now the makers of our own
destiny. Rearranging our business
model has given us immense
freedom to grow, evolve and partner
with other organisations running
good programs.’ This change will
significantly improve the results Team
Wild can achieve with young people.
‘TDi has a belief in and commitment
to doing things in different ways’,
says Jackson. ‘They combine a
passion for social output, with
business acumen that is second
to none.’
SNAPSHOT —
TEAM WILD

81
TDi’S PERSPECTIVE
Jackson has a clear vision about
how to help young people, and is
constantly coming up with clever
ideas. Running through the Business
Model Canvas with TDi helped him
to clarify and sharpen his business
case. TDi brings a suite of attributes
to the table that can help bring a
capital raise across the line.
In Team Wild’s case it acted as a
conduit between Jackson and the
impact investors. ‘Our involvement in
capacity building and structuring the
deal gave investors the confidence
to engage’,
– Paul Steele
TDi Co-Founder
* Sadly Team Wild is no longer in operation.
TDi is continuing to work with Scott White
to design how best to build a new business
model to underpin his wonderful social
programs.

82
Policy Booth is an engagement
agency that specialises in
consultation and strategic
communication.
WHO THEY ARE
. It provides a high quality service to
local governments and businesses,
helping them to communicate more
effectively with their stakeholders
and improve their decision-making.
As a social enterprise start-up,
Policy Booth’s mission is to engage
the disengaged, which it does by
investing resources and expertise in
social impact projects and employing
young advocates.
THE CHALLENGE
The Policy Booth team were
looking for support and a critical
understanding of how their business
could scale. Like other disruptive
and transformative social enterprises,
they didn’t fit the mould of the
more traditional support programs
available.
WORKING WITH TDi
The process TDi used to extract
Policy Booth’s business proposition
was ‘brutal but effective’, says
McHenry.
‘They helped us to commercialise
our language and produce a really
solid business offering which means
our impact can increase tenfold.’
‘We are so far ahead of where we
thought we would be at this time. We
now have a long-term contract with
a major engineering firm and we are
benefiting greatly from the changes
in our business under TDi’s direction.’
SNAPSHOT —
POLICY BOOTH

83
TDi’S PERSPECTIVE
Policy Booth has no shortage
of passion but had to tame their
entrepreneurial enthusiasm to get
clarity around the value proposition
for their clients. There has been
a strong emphasis on business
coaching with a lot of refining of the
existing business.
TDi encouraged them to rework
their pricing structure and provided
important pitching practice.
‘We see a large commercial
potential in their offering, something
people are cryingt out for. Without
diminishing the social elements, we
needed them to focus their pitch on
what clients needed to hear, rather
than what Policy booth wanted to
say.’
– Isaac Jeffries
Business Model Consultant, TDi

84
IMPACT
INVESTMENT
READINESS FUND
(IIRF)
TDi’s Design of the NAB IIRF
At TDi we have been advocating
for an Investment Readiness Fund
in Australia for many years. Through
countless conversations with
Government, Philanthropy and others
in the Social Sector there never
quite seemed to be enough people
who were willing and able to make
this become a reality. In 2014 that
changed when our long term partner,
NAB, stepped up to the plate and
placed the first $1m into a catalytic
grant fund seeking to leverage small
amounts of grant funding for targeted
capacity building that would enable
enterprises to take on investment.
Bessi Graham, TDi CEO and Co-
Founder, was engaged to design the
NAB IIRF based on her experiences
as a practitioner in this sector and
her recent review and report on
the progress made by the UK’s
Investment and Contract Readiness
Fund (ICRF). Her experiences have
been invaluable to ensure the best
chance of achieving the highest
possible leverage of this catalytic
grant fund to maximise the impact of
the $1m investment.
Context
Both NAB and TDi have experienced
the lack of impact investment
opportunities in the Australian
market. In May 2013 we ran a forum
regarding the need for an Australian
version of the UK’s Investment
and Contract Readiness Fund. We
continued to work both in partnership
and individually around trying to
strengthen investment opportunities
by working with individual
organisations in the social sector to
develop their capacity for investment,
and strengthening the broader
marketplace.
Traditionally not for profit and
charitable organisations have
been able to rely on government
and philanthropy for their funding,
justifying their continuation by
demonstrating the depth and
increasing effects of the social
problems they’re attempting to
address, such as homelessness,
environmental degradation, and
poverty.
However, with the continuing
decrease in available government
and philanthropic funds, another
approach is desperately needed.
Despite the very necessary
services they provide, for many their
continued existence is under threat.
The increasing interest in impact
investment from potential investors
means that investment capital is
a viable method of making these
organisations sustainable, however
most traditional not for profits and
charities do not have business
models that would allow them to take
on investments.
The gap in the market that exists
between organisations in need
of funding and investors actively
seeking impact investment
opportunities is widely recognised.
The Federal Government has
previously attempted to address it
through the establishment of the
Social Enterprise Development and
Investment Funds (SEDIF). But the
last few years have shown more
clearly than ever that we need
to address the lack of capacity
within organisations to meet the
requirements of investment capital
if initiatives such as SEDIF are to be
successful.
We’ve had growing success in
coming to agreement on what an
Investable Social Enterprise (ISE)
needs to look like, and the interest
from investors in engaging with these
organisations is continuing to grow.
In late 2014 NAB announced
groundbreaking cornerstone

85
funding to establish the NAB Impact
Investment Readiness Fund.
What will this fund do for the social
marketplace?
We envisage the introduction of
this fund as the next step in helping
unlock, not only the potential of
SEDIF, but also the broader growing
interest in the field of impact
investment from a range of potential
investors. Our focus in co-designing
this much-needed fund has been on
making sure we create a fund that
delivers solid outcomes that see
significant leverage of any catalytic
grant capital distributed.
This fund is not solely focused on
traditional not for profits or charitable
organisations, but has instead
intentionally chosen to allow a broad
range of organisations to apply. We
believe that a business with a social
or environmental mission at the core
of what it does can help solve some
of society’s most complex problems,
regardless of its legal structure.
The fund recognises the challenges
organisations in this field face when
trying to simultaneously address their
mission and a commercially viable
business. We therefore seek to bring
clarity to the parts of the business
model that need assistance, and to
provide necessary funding to cover
those costs. We look forward to
other Funders, both Government
and Philanthropic, contributing to the
Fund and expanding its reach.
Innovative Features of the Fund - A
World First
While similar funds exist in other
countries, this is the first time a fund
of this nature has been initiated by
a financial institution rather than by
government or philanthropy. We
believe this is a strong demonstration
of the demand for impact investment
opportunities in Australia, and an
excellent indicator of the potential
for successfully funding investable
enterprises once their capacity is fully
developed.
A Payment by Outcomes Approach
We have chosen to take a Payment
by Outcomes approach in the design
of this fund as we believe it will
provide the greatest potential for
organisations to successfully access
investment capital. The NAB IIRF
has been established to provide
catalytic funding with targeted results
of producing investable enterprises.
A Payment by Outcomes approach
will help ensure the funds available
are used in the most efficient and
effective ways.
The fund will provide a grant of
up to $100,000 to organisations in
need of capacity building to become
investable. The grant will go to
covering the costs associated with
engaging a Provider. The Provider
will be paid 70% of a successful grant
upfront to undertake the capacity
building, with the remaining 30%
provided once the organisation
demonstrates it has obtained the
targeted investment.
A key feature of the design
that will enable the Payment by
Outcomes approach is incentivising
Providers. If a Provider successfully
navigates an organisation to its
targeted investment several times
it will receive a Gold Star rating.
Conversely, if they fail to achieve
the targeted investment funds on
multiple occasions they will not be
able to access the NAB IIRF again.
We strongly believe Australia has
the potential for a thriving impact
investment sector, and the creation
of the NAB Impact Investment
Readiness Fund is a significant step
towards realising this potential.

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Ethical Property Australia
provides property solutions
to socially or environmentally
driven organisations.
WHO THEY ARE
Ethical Property Australia provides
property solutions to socially or
environmentally driven organisations.
They bring together ethically minded
investors who want the security
of a property backed investment
and organisations that are doing
good but who could also benefit
from being co-located by sharing
resources and potentially working
together on some projects.
Ethical Property provides a range
of services including purchasing,
refurbishing and owning property,
developing property on behalf of
other owners, and then managing
these properties. While they’ve
only worked on commercial spaces
so far, they would be interested in
investigating the potential for ethical
residential projects.
THE CHALLENGE
CEO, Peter Allen, has been
re-examining the long successful
European model of Ethical Property
UK to make sure it’s suitable for the
Australian market, and to see where
it can be improved.
However, Ethical Property still faces
the challenge of timing, both within
their business model and the product
they supply. As quickly as possible,
Ethical Property needed to become
financially sustainable.
Timing is also very important when
getting a property project off the
ground. Ethical Property needs to
bring investors, tenants and the right
property together at the right time,
often at short notice.
WORKING WITH TDi
“When I first arrived it was really
helpful to have TDi question me on
the way Ethical Property did things in
the UK,” said Peter Allen.
TDi introduced Ethical Property to the
Business Model Canvas, which was
useful in understanding the various
elements that make up a successful
business. This has further supported
Ethical Property in their development
of a social and environmental impact
reporting methodology and been an
important networking tool to connect
with other organistions in similar
positions.
SNAPSHOT —
ETHICAL PROPERTY

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TDi’S PERSPECTIVE
Ethical Property Australia is in
situation in which investment is not
always readily available. For a deal
to go ahead they need perfect
convergence of the right building,
tenants, and investment funds to be
available all at the same time, which
can be quite difficult.
TDi are crucial in assisting with the
aligning of these three aspects on all
investment future opportunities.
“EPA’s buildings are such a beautiful,
tangible picture of what an impact
investment can be. The big question
is about how we get an EPA building
in every city, which requires a lot of
diligence, creativity, and a strong
investor network.”
– Isaac Jeffries
Business Model Consultant, TDi

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Created in 2014, GoodSystems
supports many community
organisations with their IT
systems and support.
WHO THEY ARE
Founded by Ric Benjamin,
GoodSystems aims to help
organisations do things smarter by
empowering their staff with access
to the information they need and
workflow engines that enhance
productivity by using cloud-based
technologies.
THE CHALLENGE
GoodSystems is a fully-fledged
software business designed for the
sector. They deliver a fit for purpose
integrated suite of software to
manage all core back office aspects
of an organization is a first.
As their product is a sector first,
GoodSystems faces the challenge
of framing it to their customers and
investors alike. This is due to it
being aimed at a niche market that
is historically not well funded and
unfamiliar to the product.
WORKING WITH TDi
TDi’s business model framework
methodology and adaptive approach
in personal support
helped maintain a focus on what
needs to be done at every stage of
the business process.
Working with TDi provided a strong
network of like-minded social
enterprises who are on a similar
business path. Through TDi’s
incubatee workshops GoodSystems
encouraged to look beyond the dayto-day
issues and maintain creativity
to solve immediate and emerging
challenges.
SNAPSHOT —
GOODSYSTEMS

89
TDi’S PERSPECTIVE
TDi worked extensively with
GoodSystems on their customer
analysis and implementation
planning but maintained a strong
focus on financial modelling.
Changing an organisation’s
operation systems is often a huge
headache, so helping customers
overcome those early ‘switching
costs’ was imperative.
Now the challenge for GoodSystems
is to build track record, as it heads
towards becoming an Investable
Social Enterprise.
‘It was important that we create a
financial model that makes it easy for
customers to get on board, whilst still
ensuring that GoodSystems can fund
its own growth.’
– Isaac Jeffries
Business Model Consultant, TDi

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91
THE
NEXT
CHAPTER

92
LEARNINGS
This pilot phase has been one of
trial and error. Not in an unthinking
way but in a very intentional and
designerly way. We have constantly
designed mini pilots that we have
tested, refined and redesigned.
It has been an iterative process
and has led to us building a solid
foundation on which to grow and
scale our business with deep and
real customer and market insights.
Due to funding constraints we have
been forced to be more responsive
and customer focused. We believe
that these are the perfect conditions
for innovation and that’s exactly what
our business model demonstrates.
Without the luxury of ploughing on
despite the fact that a service isn’t
hitting the mark we have reflected on
what our customers need and what
they are willing and able to pay for.
This has led to a much more targeted
offering that we believe will bare fruit
over the next 12-18 months.
One of the areas we have not
performed to a standard we are
proud of is in our relationship
management. Whether with the
social enterprises we have worked
with, the investors we have engaged
with, with our staff or as a Board. We
simply haven’t had enough hours in
the day to give people the time they
deserve and need. We have worked
ridiculously hard and certainly done
our best but what we’ve delivered on
this front is not good enough and we
want to do better.
We need to not only add capacity by
increasing the size of the team but
also ensure we get the right cultural
and skill set match to actually see
the increase in what we can deliver
and how well we deliver it. This is our
next challenge.
We always knew that the business
model was foundational to our work
but we have learnt over these two
years that our approach to using it
and training others to use it is unique
in the market. Paul has always said
that the business model canvas is
deceptively simple and this is part of
the reason why other players in the
market who are trying to use it are
struggling to use it effectively.
We have done business modelling
with over 150 social enterprises and
really honed our method around how
best to use this magnificent tool of
the business model canvas to build
Blended Value organisations.
In our early interactions we found that
social enterprises reacted strongly
against the business model canvas
if we jumped straight into it, as they
felt uncomfortable with the pure
commercial approach they felt that
took. Most of the organisations were
coming more from the social side of
the spectrum and found the canvas
“too mercenary”.
Common struggles emerged with
parts of the canvas that seemed to
trip social enterprises up. Areas like
articulating the customer segment
were more complex for those who
focused on their beneficiary group
and confused this group for the
customer.
The Value Proposition was another
area of confusion, as people would
passionately place their mission or
purpose in this box believing that as
it was their motivating factor it must
be the customers as well.
Responses began to soften and the
education process became more
effective when we introduced the
Intention box above the canvas. This
can then inform the business you
build moving forward and help in the
decision making process.
Our ability to use the canvas as a
way to “triage” an enterprise and
give feedback on gaps or strengths
in the model has allowed us to more
effectively target our interventions
and next steps.

93
It hasn’t all been success and growth.
We have had the massive blow of
Team Wild failing to live up to its
potential. There is much to learn from
the experience and we carried out
a full “autopsy” of all our dealings
to see if there were any signs
we missed or intervention points
where we could’ve done something
different to achieve a different
outcome.
Our experience with Team Wild has
also reiterated the importance of all
three areas of an Investable Social
Enterprise: Mission, Model and
Management.
The fact that in Team Wild’s case
failures of management unraveled
all of the good work that had taken
place in the areas of Mission and
Model is a lesson to us all.
The autopsy process was in fact
really positive in terms of the role
TDi played and how the quality of
our work stood up at all stages of
the unfolding saga.
While the behaviour of a very small
number of players was incredibly
disappointing the majority have
shown the expected level of support,
understanding and leadership which
has positioned them as pioneers in
the impact investment space.
Overall, despite the massive financial,
psychological and emotional loss
that we all felt from Team Wild it has
resulted in some really encouraging
interactions with investors who have
continued to support the wonderful
social side of the program and
we will continue to work to find a
business model to support that
moving forward.

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FUTURE
Over the next 12 months we will be
delivering on a number of significant
projects that will require us to expand
our core team. These include:
• DFAT Pacific Project
• Expansion of programs in
partnership with NAB
• Increasing engagement with
Local Councils
• Exploration of TDi’s role in
building capacity of organisations
effected by the NDIS.
We will be continuing to focus on
our core skills of business modelling
and triage of the enterprises we
work with to ensure appropriate
interventions are designed for each
enterprise.
In 2015/2016 we aim to:
• Triage 170 enterprises
• Provide Business Modelling
services to 100 enterprises
• Take 50 enterprises through our
Two Feet Program
• Deliver consulting sessions to 17
enterprises.
This next chapter of our
development will be an exciting one
as the work we have put in over the
last few years has positioned us well
for growth.
We will continue to play a leading
role in educating the market and
shaping impact investment and social
enterprise development in Australia.
Our YouTube channel and growing
online presence provides us with
a powerful platform to plant seeds
and share stories of what is possible
when you design for Blended Value.
As our team grows we will work
hard to improve our customer
relationships and reduce the intensity
of the workload that each staff
member is required to carry. We will
also continue to work on building
multiple team members capacity in
each area of our service delivery to
reduce the personnel risk associated
with only one or two people being
able to deliver any given service.
We truly believe that this is an
inflection point for our business.
The market is awakening to the
importance of our work and we are
well positioned to take advantage
of the growing interest in both social
enterprise and impact investment.
Our incredibly capable team,
combined with our powerful Method
will be a force to be reckoned with!
We look forward to moving into a
phase of development that features
more case studies and live examples
of the impact of our work on the
enterprise we enable. Even more
importantly we look forward to the
growing body of evidence for the
positive impact the enterprises we
work with are having on the social
and environmental issues they seek
to address. In the end this is what
drives us; a desire to play a role in
leaving the world in a better state
than when we found it.
Our continued focus will be on
demonstrating that Blended Value is
possible through growing Investable
Social Enterprises.

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Chapter One
Published by
The Difference Incubator
Level 1, 673 Bourke Street
Melbourne 3000, VIC
info@tdi.org.au
Printed By
Finsbury Green
ABN 52 007 743 151
Mail PO Box 102, Hindmarsh,
South Australia 5007
finsbury@finsbury.com.au
finsbury.com.au
Acknowledgments
Lead Author
Bessi Graham
Design and Layout
Sophie Hansen
Content and Editorial Support
Abbie Matthews
Ashlee Steele
Alexandra de Blas
Photography
Ashlee Steele
Lucia Rossi
Paul Steele
Myfanwy Garven
Digital Storytellers
Enterprise images were provided
by their respective companies
Content may be cited
Graham, B. TDi: The first chapter,
The Difference Incubator, 2015
All rights reserved. No part of this
publication may be reproduced
or transmitted by any means,
electronic or mechanical, inculding
photocopying, recording, or any
information storage and retrieval
system, without permission in
writing from the publisher.

97

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TDi: The First Chapter is a small
attempt to share some of the work
and learnings from our first twoyear
pilot. It is an opportunity for
us to thank our wonderful partners
for their support and celebrate
the progress being made towards
building a functioning impact
investment market in Australia.
We invite you to browse through the
pages of this book like you would
a coffee table book. Dipping in and
out as your interest guides you. Our
hope is that by the end you will have
a better sense of our work and feel
more connected to what it is we’re
seeking to achieve.
Together we can make Blended
Value a reality and demonstrate
you can do good and make money!