It was great to be back in-person with the philanthropic sector for the Philanthropy Australia conference.

Convenings like the Philanthropy Australia national conference are incredibly important for sharing learnings and building relationships, but effort needs to be taken that they don’t become an echo-chamber. Philanthropy Australia did a great job bringing diverse voices into the room, exploring why people give, how they give and what’s important to give to.

How to grapple with power, risk and systems-level challenges were themes I heard come up repeatedly.

Kristy Muir, CEO of Australia’s largest foundation the Paul Ramsay Foundation, shared her list of five key challenges and opportunities for the sector on the first morning.

They are:

1. The need for the sector to get better at systems thinking
2. More asset framing – defining people by their assets and contributions not their deficits
3. Increasing equitable grant making, working more upstream towards root causes
4. How to ‘live the risk capital rhetoric’, being willing to invest in unproven innovation
5. Being responsible custodians, and ‘ensuring that a greener future is a more equitable future.’

The core challenges, discussed from a variety of perspectives during the two days: Philanthropy must share power, by giving away more of it, and share risk by taking on more of it.

But how to do those two things?

It will involve trade-offs and discomfort for traditional philanthropy.

We all need to be more long-term in our thinking and actions while simultaneously recognising and grappling with the historical realities that trap people in unequal systems and prevent progress, and the role these same systems may have played in creating the very same wealth now being used to build a better future.

This ‘funding progress with wealth from the past’ has always been at the heart of traditional blind spots in philanthropy.

The way to burst out of these blind spots is to be more open: open to new ideas, new voices and new ways of working to create change.

Sharing power needs to occur through true co-design, participatory granting and leadership diversity.

Meanwhile, being more courageous and being willing to take more risk is crucial if we are to achieve meaningful progress quickly. This progress will require innovation and innovation requires risk-tolerance and the courage to invest in approaches not yet proven to work.

As the Co-Founder of impact lending platform LendForGood I was pleased to hear impact investment repeatedly discussed in this context.

This is crucial because even with the best will in the world, the most adventurous and enlightened philanthropists, the vast majority of the resources controlled by the Philanthropic Sector are in fact deployed in the for-profit investment industry, with only 5 per cent needing to be given as grants each year.

That means the traditional conversation around philanthropy is focused on how best to spend this 5 per cent, while the other 95 per cent has gone undiscussed, and far too often has been invested in business-as-usual, which contributes to the negative social and environmental impacts charity seeks to address.

If we’re serious about making progress on these challenges we need to consider how best to leverage 100 per cent of our assets, so it was very good to see the investment side discussed at a philanthropy conference.

Impact investment allows organisations to leverage all their assets in the pursuit of their mission. These investments still seek an economic return but ensure positive impact along the way.

However, this opportunity is still more talked about than actively realised. We heard great stories from a few organisations like the Snow Foundation and Paul Ramsay Foundation who are leading in this area, but most philanthropies are still at the ‘thinking about it’, or even the thinking about thinking about it, stage.

A big part of the challenge is the different nature of risk and risk assessment when it comes to impact investment.

This is a valid concern, but it’s vital we don’t let it hold us back from doing all the good we can do.

For philanthropy the conversation around risk gets too often dominated by the concerns of investment professionals, who often come from a very traditional business background and bring with them a desire to win every deal and a belief, still, that it’s the granting that does the real good and so the main and perhaps only job of their investments is to fund this granting.

This view completely ignores the massive impact where and how we invest our resources makes in the world around us which, givens the much larger quantity of funds invested, can meaningfully advance or hinder the actual social mission of the organisations these investments are made on behalf of.

Social enterprises, businesses with an impact model at their heart, such as employment for disadvantaged communities, lowering barriers for education or developing more sustainable materials, are at the forefront of many of the innovations we need to address the challenges Kristy listed, to build a more equitable and sustainable future and share economic power more broadly, but are currently held back by the lack of capital to support them, especially at an earlier stage.

While risk might be the most conceptual barrier for new foundations moving into impact investment what I also heard repeatedly is that it’s the practical barriers that prevent more organisations doing it.

Most deals in the impact investment space are opaque and hard to get into, meaning the supply of opportunities is limited and access to them primarily done via funds, which require significant minimum investments and which almost-always focus their greater combined resources on bigger deals with more advanced companies. These minimums and the costs of due diligence make it hard for new organisations to dip their toe in the water. For many these minimums represent more than the funds they have to invest annually.

It was a desire to lower these barriers and democratise impact investment that led to the creation of LendForGood. We believe that only by making it possible for foundations and individuals to invest in vetted opportunities on a deal-by-deal basis and in smaller amounts can we unlock the impact opportunity of social enterprise.

What it all comes down to is how can we do the greatest good with the resources at our disposal?

Philanthropy has huge challenges and huge opportunities before it, as we work to achieve the Sustainable Development Goals and turn the corner on climate change by 2030.

Achieving those opportunities and overcoming those challenges will require more courage and innovation than ever before. More willingness to share power, back new voices, trial new approaches and bravely share what we learned from our successes and our failures.

Only by taking a more wholistic approach to impact and risk and leveraging all our assets will we give ourselves the greatest chance of success.

Tom Dawkins is the co-founder of social enterprise StartSomeGood and of the new impact business crowd-lending platform LendForGood. LendForGood works with existing impact business intermediaries to source vetted deals, which anyone can invest in from as little as $500. Find out more and sign up to the waitlist at http://www.lendforgood.com.

LendForGood is a joint-venture between StartSomeGood and Red Hat Impact. StartSomeGood supporters emerging social entrepreneurs to design, launch and grow impact initiatives. They run a variety of accelerator and capacity—building programs for social enterprises on behalf of partners including the United Nations Development Program, ING, Optus, the English Family Foundation and the Cities of Sydney and Parramatta.