Diabetes Victoria offers Capital Impact Loan for translational research

Diabetes Victoria (DVic) is using an innovative financing tool developed by Perpetual Ltd. to raise long-term, flexible funding for research into a disease affecting more Australians than ever.

Called a Capital Impact Loan (CIL), private and public ancillary funds are being invited to lend a portion of capital to DVic’s Diabetes Innovation and Impact Foundation (DIIF) through a 10-year, zero-interest loan. Funds will be held in a security trust and invested by an external investment manager into an ethically screened diversified portfolio.

Investment income will be deployed to DIIF’s Diabetes Translational Research Fund and excess returns reinvested for capital growth. For the duration of the loan term, lenders will be able to claim the income foregone on their charitable loan as a donation towards their annual distribution target, then, at the end of the 10-year term, loan funds are returned.

“We understand that philanthropists value transparency and measurable impact, which is why we’ve created a model that connects strategically minded donors with high-impact researchers,” said Glen Noonan, CEO of Diabetes Victoria and the DIIF

“The DIIF research fund will be regularly evaluated, giving every partner confidence that their investment is delivering outcomes for people affected by diabetes.”

Diabetes on the rise

Australia is home to some of the world’s leading diabetes researchers and clinical trials, yet diabetes receives less funding than other chronic conditions. In the past 10 years, NHMRC funding for diabetes research in Australia has fallen by 51%, despite a 36% increase in the number of people living with diabetes, according to the National Diabetes Services Scheme data map.

DIIF was launched because Diabetes Victoria saw a critical gap in funding for translational research. The kind that doesn’t stop at discovery but goes further to deliver real-world solutions that change lives. It enables financial leverage for donors, while integrating impact measurement ensuring investments lead to meaningful, real-world outcomes.

The Fund’s two inaugural research partners are the Australian Centre for Accelerating Diabetes Innovations (ACADI) and the Australian Centre for Behavioural Research in Diabetes, each selected for their distinctive and complementary roles in the diabetes research ecosystem.

‘Inspiring and ambitious initiative’

The CIL structure was launched by Perpetual Limited in 2019 as a pioneering way for PAFs and PuAFs to invest in charities.

Professor Sue Alberti AC, ACADI Council Chair, said: “This is an inspiring and ambitious initiative, designed to unlock significant philanthropic investment in life-changing diabetes research.

“As a long-time supporter and advocate for diabetes research, I’m excited by the potential of the Capital Impact Loan to help turn research breakthroughs into real-world outcomes.”

Caitriona Fay, Managing Partner, Community, Social and ESG Investment at Perpetual Group, said: “The CIL serves as a powerful tool in the philanthropic toolbox, empowering funders to mobilise their philanthropic capital in pursuit of their charitable purposes, alongside the income generated from those assets.

“There are numerous benefits of the CIL model for funders and recipients, and we are excited to see how this innovative model will unlock new philanthropic capital and drive impactful outcomes for the Australian community.”

Learn more about the DIIF and the research fund online.