Paying What It Takes Case Study 3: Work Integration Social Enterprise (WISE)

The Westpac Foundation's Sally McGeogh and Kylie Flament from Green Connect talk about the importance of transparent communication in building relationships to support social enterprise.

Participants: Westpac Foundation and Green Connect

Westpac Foundation is a corporate foundation that has been supporting the community for over 140 years. Its focus is on providing funding and programs to support social enterprises and community organisations creating jobs and opportunities for Australians experiencing disadvantage. Its mission is to help social enterprises create 10,000 jobs by 2030.

Green Connect is a not-for-profit social enterprise that employs young people and former refugees to do environmental work. It runs five business arms including a fair food farm, zero waste services, and gardening and landscaping services. In FY22 it employed 131 young people and former refugees, kept 157 tonnes of waste out of landfill, and grew and distributed more than 35,000kg of chemical free food

Contributors: Sally McGeoch, Senior Advisor, Westpac Foundation and Kylie Flament, (then) General Manager, Green Connect, (now) CEO, Social Enterprise Council for NSW & ACT

How do you see the partnership aligns with the Pay What It Takes approach?

Sally: A key reason why the Westpac Foundation (WF) and Green Connect (GC) partnership is aligned with a Pay What it Takes approach is that we have very strong alignment on a shared goal – which is to create sustainable employment for vulnerable Australians.

At the Foundation we believe in the power of employment in breaking cycles of disadvantage and know that although we have seemingly low unemployment rates currently, this masks the fact that underemployment is still high and those who are disproportionately affected are those who face the highest barriers to work such as young people and refugees – the key target groups that GC Supports.

As we share this same goal, our funding and support is focussed on building the resilience and sustainability of our partners like GC to achieve their employment outcomes and is not tied to particular programmatic funding. Funding is usually about supporting core costs such as the employment of key roles in the organisation to build their capacity and is not about delivering a discreet program or project-based funding in a specified time frame.

We also partner with organisations for the long-term – in the case of GC we have been supporting them for eight years. Over that time have granted approx. $765K.  Just in the past five years they have grown their revenue from $1m to $2.5m and created close to 300 jobs and over 600 pathways.

Other ways our partnership aligns with a PWIT approach is  Focus on the organisation (not a project/program) and strengthening the underlying business and impact model.

When WF partners with social enterprise we like to “get under the hood” and really understand the underlying business and impact model and focus our funding and support on ways we can work together to build the resilience and sustainability of the model.  We are then able to identify ways we can leverage and skills, resources and networks across Westpac to help. An example with GC was a business mentor working with the team to analyse the profitability of certain business/impact areas and the importance of prioritising investment in areas where there was strong potential for increased profits to cross subsidise those business lines that were not as profitable but still supported GC to deliver on their impact goals.

Our approach to relationship management

Sally: WF takes a proactive approach to partnerships and schedules regular quarterly check ins to see how they are tracking on their business and impact goals but to also identify ways we can support. The meetings are very informal and we have very open conversations which also encourage partners to share barriers and pain points that we can work through and help develop solutions together.

Kylie: WF is also available to support GC outside of the regular check ins. As the General Manager of GC, I knew that WF wanted us to succeed, so if there were things I needed help with that I thought WF could offer, I didn’t hesitate to ask. That included brainstorming new business ideas, being introduced to other social enterprises or potential partners to collaborate and grow with, getting access to Westpac Foundation’s EAP program when our staff and volunteers were struggling during successive COVID lockdowns, and setting up a corporate volunteer day to work through a challenge with our software.

Focus on collaboration

Sally: Westpac Foundation take a “social enterprise” centric approach to our partnerships and seek to collaborate with other philanthropic and cross-sector partners to remove some of the pain points in managing multiple funders and reporting requirements.

An example of this with GC was the convening role we played to schedule regular quarterly check ins with a range of the GC supporters so GC could streamline their communications and requests for support to these stakeholders. During COVID, we stepped up these meetings to monthly to support the CEO Kylie navigate a very difficult time and some of these funders were able to provide additional COVID grants during this time.

Kylie: WF also led the discussion with other funders to come up with shared outcomes measurement so that we were using the same data. This was easier and more efficient for GC, but also built trust between us and funders because they could see that we were reporting the same thing to all funders.

Reflecting on this partnership, what are the impediments/obstacles that prevents PWIT from being adopted more widely across philanthropy?

Sally: Some of the key barriers are short-term programmatic funding that are focussed on particular outputs and outcomes without considering the broader context of the needs of the organisation and its people.  Building long term partnerships builds trust and a focus on the long game. It is important to have a reflexive approach where social enterprises can have the freedom and confidence to change direction with their funding if that is the best way for them to build their sustainability and impact.

Kylie: The partnership between WF and GC is relational rather than transactional, and that takes time. Sometimes funders may not be able to, may not see a need to, or may even be hesitant to build that long-term relationship.

Over the past few years, there seems to have been a race to the bottom when it comes to incorporating administration overheads into grant agreements. Some funding specifically states that administration costs are not to be included. Some funders, including government bodies, have capped overheads at a rate that is too low. And many charities, not-for-profit organisations and social enterprises are afraid to ask for too much so we pare back our grant applications to the absolute minimum financial ask, which results in the starvation cycle and in highly skilled people working in these sectors being overworked and underpaid, which is in turn leading to very high levels of burnout.

We understand the importance of trust in making successful partnerships – how is the trust element exemplified in this partnership?

Sally: Trust in my mind is present when both parties can be very open and transparent about their challenges and when things don’t work out as planned without the fear or risk of impact on the relationship or ongoing support.

At WF we were always open to hearing from GC about challenges they were facing and in COVID they were drawn to supporting their local community with food relief which at the time was the right thing to do even though it wasn’t directly related to their mission.

Kylie: Telling funders only the good news seems to be common practice in the philanthropic world, out of fear that if you don’t achieve the funding goals or better, you’ll never be funded again. Funders like WF and The Ian Potter Foundation spend time developing relationships with their fundees and also ensuring that fundees know it is better to be honest and that we can all learn a lot from what doesn’t work, so it’s better to put it all on the table.

GC’s culture is one of authenticity and transparency anyway, so we naturally share the good and the bad with everyone, from our staff and volunteers to our funders and customers, to the general public.

WF were so receptive to understanding the true picture of what was happening for GC at all stages, and really leant in to help where they could when we were experiencing challenges, so that built the trust and openness between us further.

Were there any moments in the partnership where either of you thought – “This could be an issue…This is an issue…” If so, how did you resolve it? If there wasn’t an issue, why do you think that was?

Sally: The pandemic was an obvious point when many issues arose for social enterprises that could never have been anticipated. One of the really obvious concerns was the mental health and wellbeing of the managers and CEO.  Social enterprises didn’t shut down during COVID, many ramped up their activity as their focus was on helping their vulnerable employees and beneficiaries through such a difficult time.  This took a huge toll on the managers of social enterprises.  The collaborative funders group supporting GC recognised this and many reached out to offer additional support to the CEO.  At Westpac we offer an Employee Assistance Program (EAP) through a third party provider and were able to offer unlimited access to this provider to our partners for free counselling and coaching sessions.

Kylie: WF openly supports GC but doesn’t cover the full funding needed for GC to continue to operate, so we have to look for additional philanthropic or government support. A couple of times there were opportunities to apply for funding from foundations that were aligned with other banks, and I was worried that WF might not be receptive to us doing that. I called Sally to ask what she thought about it and whether it was out of the question, and she was very encouraging and supportive of us applying for funding wherever it was available to us. If we had a very formal, highly power-imbalanced relationship, it might have been an issue, but with an open, trusting relationship I knew I could ask the question and even if the answer was no, the relationship would still be strong.

How hard is it to replicate successful partnerships?

Sally: Each partnership will always be unique in terms of the goals, people involved and dynamics of the partnership over time.  However, I believe the key ingredients to successful partnerships remain the same, so it is possible to replicate the benefits and impacts of effective partnerships. These basic ingredients are about centring the needs of the social enterprise and prioritising the relationship – as the relationship will only develop at the speed of trust. Setting these relationships up for success requires some important prep work including being clear (and openly reviewing) shared goals, having open and clear communication, and a sense of some success measures set in partnership with the social enterprise.  This does not mean having rigid outcomes frameworks but a broader theory of change/vision and then a series of staged success measures that can be reviewed and adjusted as needed.  It is really important to acknowledge that social enterprises are operating in a complex dynamic environment and so a strong focus needs to be on constant learning and reflection together for the partnerships to survive and thrive.

Kylie: Agreed. As with any kind of relationship, it takes time and is dependent on the needs of each party, how well the other party can understand and meet those needs, and sometimes on the ways of working that each one brings.

It takes time to establish a relationship from scratch. I think the work that WF is doing in collaborative funding models is a great way to build on the trust between one funder and fundee (e.g. WF and GC) and extend that to another funder. A warm introduction or recommendation between funders and fundees (in both directions – e.g. one social enterprise speaking highly of another to their funders) counts for a lot and helps to fast-track successful partnerships.

What role does non-financial support play in PWIT? Is it just another expression of the partnership’s flexibility or something that is best considered on a case-by-case basis?

Sally: For WF the non-financial support is a key element of our partnership model.  The funding is often only one part of the value and many of our partners value the non-financial support as much, or more than the cash contribution over time. The caveat for non-financial support is ensuring it is tailored to the needs and timing of the social enterprise.  In the case of advisory and business development support, it also needs to be fit for purpose and help build the capacity of the organisation over time.

An example for Green Connect was some feasibility work that a team of Westpac employees did to analyse a range of new business opportunities for Green Connect.   The Westpac team did the grunt work to explore a range of business concepts and then prepared a presentation on each.  It didn’t end there though as Green Connect was supported to implement the new business area (in this case a new garden and maintenance business) through business mentoring, introductions to other social enterprises and additional funding support.

Kylie: Non-financial support is more and more commonly offered by (or insisted on by) funders, and it can be hit-and-miss. Because of the power imbalance between funders and fundees, fundees will often say yes to non-financial support such as corporate volunteering that can sometimes take resources away from the fundee rather than adding benefits. It took a while for us to work up the courage and to have the level of trust and openness required to be able to have real conversations about where the non-financial support was adding value and where it was actually detracting from our work and placing more pressure on our social enterprise. Once we did that, Sally and I were able to have great, honest conversations about what would help and what wouldn’t. Often I would let Sally know what we were struggling with or where we needed support and she would reach out to her network within Westpac to see if they could help. Sometimes Sally would be the one to suggest different non-financial support options and I felt comfortable enough to say yes or no, rather than feeling obliged to say yes and pretending that it was a great value-add when it might not really be.

Non-financial support definitely needs to be considered on a case-by-case basis. It needs to be offered (or requested) in a way that either party can say no to without damaging the relationship. And I would add that the greatest non-financial support that WF offered GC was having two people (one in WF and one in the bank) who truly walked with us for several years and were available if we ever needed to talk something through or find resources to solve. They listened, they offered advice, they connected us with people and opportunities where relevant, and they really championed what GC was doing.