Financing social entrepreneurship: The role of impact investment in shaping social enterprise in Australia

Purpose
This paper aims to explore the emergence and nature of impact investment in Australia and how it is shaping the development of the social enterprise sector.

Design/methodology/approach
Impact investment is an emerging approach to financing social enterprises that aims to achieve blended value by delivering both impact and financial returns. In seeking to deliver blended value, impact investment combines potentially conflicted logics from investment, philanthropy and government spending. This paper utilizes institutional theory as a lens to understand the nature of these competing logics in impact investment. The paper adopts a sequential exploratory mixed methods approach to study the emergence of impact investment in Australia. The mixed methods include 18 qualitative interviews with impact investors in the Australian market and a subsequent online questionnaire on characteristics of impact investment products, activity and performance.

Findings
The findings provide empirical evidence of the rapid growth in impact investment in Australia. The analysis reveals the nature of institutional complexity in impact investment and highlights the risk that the impact logic may become overshadowed by the investment logic if the difference in rigor around financial performance measurement and impact performance measurement is maintained. The paper discusses the implications of these findings for the development of the Australian social enterprise sector.

Originality/value
This paper provides empirical evidence on the emergence of impact investment in Australia and contributes to a growing global body of evidence about the nature, size and characteristics of impact investment.