This is exactly what happened in Australia just months ago when the concept of social enterprise was put into practice. The acquisition by a mission driven organisation is an Australian first which focuses on early childhood education as the means to reduce social disadvantage.

The Australian government-led privatisation of Australian childcare in the1990s resulted in company's building profitable empires of childcare centers. One of these organisations and a key provider of early childhood services, ABC Learning Centers Limited (ABC Learning), was carrying $1.2b worth of debt when it fell victim to the global financial crisis in late 2008.

Private equity professionals quickly identified ABC Learning as a potential acquisition target. So did Australian social visionary Michael Traill. The founder of Social Ventures Australia, a Harvard graduate and former private equity titan, Michael was contacted by entrepreneur Evan Thornley who queried whether converting the ABC Learning business into a 'for purpose' operation would be an option. What ensued was the formation of a unique cross sector, non-profit syndicate called GoodStart Limited.

As Michael explains: “We recognised this as a once in a generation opportunity to significantly change Australia's childcare sector for the better. It is now well documented by Australian and International research that effective early learning is vital to positive social outcomes later on in life regardless of family background. The most important period of learning is the first five years of life.”

Apart from the philanthropic potential of the project, the economics made sense. GoodStart's winning bid - rumoured to be around $100m - for 678 ABC Learning centres beat other private equity bids for the $600m turnover business.

The funding model included:

Traill notes the contribution of individuals and non-profit organisations was critical: “What made this last capital layer so unique was that we structured it to attract these individual investors:
subordinated debt with a commercial, albeit below-market, return”.

GoodStart Limited Chairman Robin Crawford later revealed that the philanthropists would be paid a non guaranteed 12 per cent a year on their unsecured notes (compared with commercial rates of 15 per cent plus) and repaid at the conclusion of the eight year term The government loan was also to be repaid over 7 years at the government's cost of finance (then at 6.4 per cent).

Myself, along with our team at HSC & Company believe GoodStart may very well provide Australia, and indeed other nations, with the blueprint for partnership funding that works to deliver social outcomes practically, not just theoretically.

Traill says that GoodStart is important for three main reasons:

GoodStart demonstrates that in fact capital is available. Why? Firstly, a commercial return, albeit below market rate, is available. Secondly, partnering with likeminded individuals and organizations is critical to establish a critical mass. Thirdly, GoodStart asked the federal government for a loan – other ABC Learning bidders did not. Finally, a clear and detailed plan demonstrated how the GoodStart syndicate would turn a previously profitable empire into a sustainable, non-profit, social-impacting business.

References
1. Michael Traill, 'Social Ventures Australia'
2. 'A capital idea' (Michael Traill), 'The Australian', 3 March 2010
3. 'Charity takeover of ABC Learning' (Natasha Bita), 'The Australian', 10 December 2009

© HSC & Company - All rights reserved

By Phil Hayes St-Clair
CEO,
HSC & Company

Phil Hayes St-Clair will be presenting at Networx's 'Sponsorship & Community Investment - Both Side of the Coin' on Wednesday, 19 May.  he will be discussing the following:

You will learn how to:

Networx event: Sponsorship & Community Investment - Both Side of the Coin
Wednesday, 19 May 2010, 6.00pm-8.30pm | Event & Booking Information

I have listened to past Networx speakers that your logo is NOT your brand.  And I think Karoline Cumming's slide of the 'Brand Circle' illustrates this point really well:

Karoline says that a successful brand is made up of 3 key components:

How does this fit into 'Marketing with Love - creating brands that people adore'?

You have to look across all of these areas to ensure that you're getting your brand's message and value across consistently. 

Read more:

Throughout the evening Rob showed us some fantastic campaigns.

Today, we see Brisbane Marketing's launch of Together Brisbane and wow, what a great example of how user-generated content can work as part of your marketing strategy.

Here is what we've come up with for our first attempt:

We want to make more posters, this is fun way to get your message across! So not only are we generating content for the Together Brisbane campaign, we're believing in what we do too.

Don't forget to LIKE our Networx poster and share it!

Start a photo album showing off your office or staff and write some interesting facts about them in the description section. (Idea #22)

Explain how to do something – everyone needs a helping hand every now and then! (Idea #34)

Tell people about the highlights from an event you’ve attended (Idea #43)

Write a Note and tag other Facebook pages in your industry so that your note shows up on their wall (Idea #54)

Create a photo album from a networking event you were at, explain the photos in the description section and then post to the wall (Idea #56)

Create a video response for any questions posted on your Facebook wall (Idea #58)

Link your Facebook page to your blog – so that every time you write a blog it shows up on the wall of your Facebook page. (Idea #59)

#1 The DIY Way:
Kodak Zi8 + Tripod + Lapel Mic + Lights
PC: Sony Vegas Studio HD, Mac: ScreenFlow

#2 The “On The Cheap” Local Way:
Film Students

#3 The Pro Local Way:
Expensive, But Easiest And Great Result

#4 The Pro Outsource Way:
Affordable, But A Little Bit Of Hassle

Here is an example of one of Gideon's video produced using video production option #4:

Great video to watch too!

Download your free copy of The Rapid Video Blogging Report at: http://www.rapidvideoblogging.com

Check out Gideon's blog: http://gideonshalwick.com.

View educational and informative videos by Gideon at his YouTube channel: http://www.youtube.com/GideonShalwick.

Event website: http://bit.ly/NX0511 

Visit our YouTube channel for a post-event interview with Gideon: http://youtube.com/networxbrisbane

Post by Lisa Ma (@lisama_)
MC & Event Coordinator- Networx Brisbane
Follow on Twitter: @networxevents