Sandy Blackburn-Wright On Social Enterprise Startups, Impact Bonds & Flipping The Design Process For Better Social Outcomes


Experienced thought leader and social innovator, Sandy Blackburn-Wright has worked across all three sectors to create positive change, both locally and internationally over the last 35 years. She is the founder and Managing Director of Social Outcomes, a for purpose business that uses social and financial innovation to create and fund quality outcomes for its partners.

Sandy serves on the board of the Community Service Industry Alliance, the advisory board of QUT’s Australian Centre for NFP and Philanthropic Studies, the Australian Advisory Board to the Social Impact Investment Global Steering Committee and is an industry fellow at Griffith University’s Centre for Sustainable Enterprises.

Sandy has played a leading role in growing the impact investing, shared value and social enterprise sectors in Australia, designing numerous large social innovation projects and co-founding Impact Investing Australia. She has also been heavily involved in the growing opportunity of social impact bonds, having worked on the Benevolent Society Bond in NSW and most recently the Youth CONNECT bond in Queensland. The team are now working on a development impact bond in PNG along with other impact investing opportunities in the region.

Sandy has the ability to build bridges between the social and the financial after 15 years in international development in southern Africa and 10 years at senior levels in banking and professional services in Australia, with her last corporate role as Head of Social Innovation for Westpac. She is also a best selling author and public speaker.


Sandy provides strong insights into social enterprise business models, sharing tips on financing through to founding teams. Sandy discusses key elements holding back large organisations and governments from creating innovative cultures, as well as two of the main issues which Australia should be worried about.


Highlights from the interview (listen to the podcast for full details)

[Tom Allen] - Could you please share a bit about your background and what led you to work in the social investment and social innovation sector? [2:47]

[Sandy Blackburn-Wright] - I went straight from university to South Africa. It was one of those things; my boyfriend at the time, his dad was involved in South Africa in community development work there. He ran a communications agency and so he had these connections, and he was trying to get the message out of what various community organisations were doing there. There was an opportunity for us all (there was six of us), to go to South Africa and be part of a youth leadership development programme there. It was always something that I wanted to do from when I was tiny. Even though that was a four or five month gig, I just never came back basically. I stayed there for 15 years.

When we got to that point when the others were heading back, (they've all gone to do amazing things in journalism and architecture and other things), I was thinking, 'what would I do back in Australia that would be more impactful than this?', and I couldn't think of anything. It was really clear that this was going to be the best place to spend my time and put my efforts. I did that for 15 years. Then I came back to Australia because my dad was ill, and he wasn't going to live that long, so I wanted to be around for the last little bit. Towards the end, in post-apartheid South Africa, it was really clear, (as a lot of the large aid agencies and governments were coming in), that understanding capital was really important.

The opportunity to work in a bank was really valuable. I was not so much thinking about a career, but a skill set; so, 'how do I learn more about financial markets and get more financially literate myself?', and working in a bank seemed to be a good place to do it. When I joined Westpac it was very people-focussed. Of all the banks, it was the one that really developed its people. The two women who interviewed me for the role were amazing women who became my mentors. It was an easy choice to go with Westpac and some of the things that they were doing in community. My purpose for being there was to really learn the business as I went along. Those two things, having done the 15 years of social stuff, and then the decade of financial and professional services, it just meant that I'm a bit of an odd nut in this sector now, because there's not a lot of people who have a grounding on both sides.

You're seeing people who are coming from a social side, (particularly in the social enterprise field), and then you see in impact investing most people there are ex-bankers.

Someone like me is unusual, and so I often pick fights with people really, because in terms of the social entrepreneurs I tell them to get more businesslike. Then with the bankers I'm saying you've got to learn the social stuff. It's more complex than you imagine. You can't just drive deal floats. Not that simple. It's not about the deals. It's about the impact.

I'm at that grinding place between the two, I suppose. Sometimes it's uncomfortable, sometimes I think I make other people uncomfortable, but I'm trying to get the best impact.

It was no, "I found my purpose or I found my calling." I've just always thought that you have to contribute. Why else are we alive than to contribute? That's it. I don't think there's a purpose. I don't think this particularly is my purpose. It's just about feeling like I'm doing something worthwhile. In any field, in any way, for everyone, I think that's everyone's purpose.

How does that align with the work you're doing at Social Outcomes then? [6:20]

What was interesting about leaving Westpac four or five years ago was that when I was head of social innovation, I was pulling together projects which you got a foot in the door because you were Westpac to go and talk to people, and particularly large corporates about opportunities to collaborate. You had to drag those corporates along with you.

Corporates are heavy if you're an innovator.

I was what's referred to as intrapreneur, but it's as challenging as an entrepreneur but you've just got a different set of stakeholders.

On one hand stepping away from Westpac meant that I wasn't dragging a corporate along with me. We've been able to be much more agile in Social Outcomes, but we still have the relationships with the individuals inside corporates.

I think people think of corporates as these hard, cold, business-driven places where there's no one with a beating heart, and it's just not true. Corporates are full of people who really want to do meaningful things, but struggle to find the bandwidth to do it.

They don't know where to start. They don't know how to make it work. They've usually got to do it on top of their day jobs, so how do they fit it in? What I found when I was inside Westpac but also since I've left is, if you come with something specific that plays to people's strengths and say, "Could you do this specific thing?", then they'll jump on it, and there's so much goodwill inside corporate Australia, it's amazing.

Being at Social Outcomes allows me to pull on those relationships and say, "Would you like to do this, that, or the other?" If they can, they will. Also, innovating and finding other partners that it would have been difficult to, say, get sign off on, or something like that. It's very similar work. It's just quicker outside corporate.

It certainly sounds like you're tapping into some of that goodwill there. What have you found to be the biggest challenges in setting up these social impact bonds, and how do you typically work around these challenges and with these people?

Social impact bonds are so interesting because it shifts the way the relationships happen between the three sectors. When you shift the way people are used to working together it's really uncomfortable, and when you first do it, you're really bad at it.

Change. Who wants to change?

I know. We're suddenly asking everyone to think about outcomes. The government's not good at it. The social sector's not good at it. Business isn't great thinking about it, all of those things. Everyone struggles to wrap their heads around a different way of working, so focusing on outcomes and not inputs, but at the same time it kind of shifts a gear on the way we're talking with each other, because the contracting is different. Sometimes we can fall back into the old ways of behaving, and so it's, again, it's a grinding space. It's really difficult, and that takes time to negotiate it.

People don't love change. They don't like doing their work differently. They're used to doing it in a certain way, and these bonds require you to think differently, to behave differently, to partner differently, to contract differently. It's difficult.

Everyone has a common intent around wanting to get good outcomes despite all of the challenges, and so people plough ahead. We've just finished the youth connect bond now, and everyone, right across the board, has what we're all calling deal fatigue. We need Christmas off away from each other. Then we'll come back and leverage each other again. It's demanding on relationships as well, this shifting, that's happening. It's complex as an instrument, but it's also complex in terms of managing those relationships.

Cocoa drying in PNG.

Cocoa drying in PNG.

I bet it is. You were telling me before the podcast about this social impact bond you're setting up in PNG at the moment. Can you share a little bit more about this and how you are driving the process? [9:47]

There's this really cool facility that DFAT has set up about a year ago called Pacific Rise. They've just quietly gone on and said,  "we've been working for years in the Pacific. We've been funding normal development projects, and it's going okay, but it's not great. We've been funding business activity. It's gone okay but it's not great. What if we brought those two things together and said how do you leverage social enterprise opportunities, how do you draw in not mainstream investors, but impact investors, (although impact investment's becoming more mainstream), but investors who value impact creation and not just financial returns?" It feels like a better fit for the Pacific, and so far in the first year of the life of this facility, I think it's proving to be the case.

DFAT's been amazing, so really brave in saying, "Let's try something different." What they do is they fund organisations like ours to go and find the opportunities. You go and do the scoping exercise, and you look for possible impact investment that is creating real social value as well, and then you do some investment readiness work, and then you hopefully secure investments for those enterprises. We've been working with the wonderful PNG Cocoa Board all year. One of the things that became obvious was that roads is an issue for their success, and even though they've built in a workaround, improving the roads would actually be really important, but it's outside what they can manage. We've thought, maybe we should look at a development impact bond as a way to do something different with roads.

We know how to fund roads. We've been funding roads for decades and decades, but we build roads in a very linear fashion. We think, okay, a road would really add value. Let's build a highway, and then it's all about the engineering and so on. We put in the social impacts that we think will be created as part of the business case, and it's definitely the reason you do it, but the design is all about the engineering.

What if, with an impact bond, you think first and foremost about the outcomes, and you have to design for those, so it flips the design process upside down, and you are completely focused on the outcomes, and that will tell you therefore what you need to do.

You go and have a look at the evidence base, and what do we know about this.

When you do that with roads, (maybe it's been done before but we haven't seen it in the research), where you flip it and say, "what do small scale farmers and particularly women who are small scale farmers need out of roads in order to be successful and have access to services and so on?" Often we build highways and we think that the benefits will trickle down, a little bit like trickle-down economics, but it's not always the case.

If we start with the outcome we want in mind and work backwards, do you actually get a different road design? The answer we're finding is, yeah, you do, significantly different, in different places, with different maintenance approaches, with different purposes.

We're in the early days of designing this bond with DFAT and a range of other players. We're hoping to have that finished by April next year, in 2018. So far it's been absolutely fascinating, and we've been talking to IFC, World Bank, ADB as well as DFAT. Everyone's going, "I never thought about it like that. What does a woman-friendly road look like?" It's really different, because women use roads differently, children use roads differently. We should design for that.

It will be really, really interesting to see the outcomes once that's in place. I'll look forward to following up on that. When it comes to getting finance as a social entrepreneur, what would the top three recommendations be from you about helping these organisations get on their way and successfully move forward with their social enterprise? [13:13]

Firstly, when I first started working in social enterprise, it was when no one knew what it was, so I was still at Westpac; the Westpac Foundation has funded social enterprise development for decades now. We had to explain as the opening line of every conversation what on earth social enterprise was.

Now, I think some people think that social enterprise is a new word for a charity. Often I look at it and go, "Where's your business model?" They go, "What do you mean?" For me it's all about the business model. If your social value you want to create has no underlying business model that can pay for itself, it's not an enterprise, and so it will never work.

I think as those of us who have been supporting the development of this sector for a long time would agree, we spend a lot of time just getting to that point.

People come and that want help and support and mentoring, and coaching, and dah-dah dah, which you happily do, but there isn't a business model, and you can give that feedback and people struggle with it.

It's not that the social idea of what you want to do is wrong, it's just, this is not the vehicle for it. Rethink the business model. Getting the business model right, I think, is the key. Once you've got that business model, start selling, because people often say, "Well, I've got to get grant funding, or I've got to get investment, or I've got to get all these things."

The best way to get investment in your business is to sell stuff.

Ideally the best way to do it is get a contract before you even start, which is what the likes of Luke has done at Vanguard Laundries, and it's been tough, but their skyrocketing success with Vanguard Laundries is because they did the hard yards around getting a reasonable sized contract first. If you can do it that way, that's the best way, and if not, just start selling. Really we're a social enterprise in terms of Social Outcomes.

Just start selling and get people to pay you for what it is that you're doing. Whether you're selling coffee, which is my least favourite social enterprise, by the way, or whether you're doing anything, customers are your investors.

We get too caught up about finding funding and investors and so on, but if we focused more on actually growing the business and just selling things to customers, I think we would need less funding, actually. If we do need it, and it's not just about selling a service that fairly low entry, and if you do need a capital injection, then I think it's important to have the business model in place, to have thought it through well, but also to be able to communicate it.

For a lot of people they might have something that's great, but they can't talk to people about it. Sometimes the business case is an idea, but they haven't done any financial projections around it. They don't really understand the market well enough, and particularly they don't understand their competitors.

I don't like social enterprises that might create themselves to fill a tiny, wee niche, and then you're just saying, "Well, why are you bothering? It's a lot of effort for a tiny, tiny niche." Something that's going to make enough of a contribution to make it worth the effort, then you've got to be thinking about how you're communicating the viability of that business, as well as the impact in a really succinct, compelling way to potential investors.

Every investor will tell you, the thing that they look at more than anything else is the person, and how capable is that management team. It's preferable not to have a single entrepreneur. It's preferable to have a team of people, but that's what they'll look at more than anything.

Yes, they'll look at the financials, and the business model, and the market analysis, but if they don't like you and the team, they'll walk away, even if it's a good idea because they don't feel they can work with you. Being really honest, open, working hard, being articulate about what it is you're doing and communicating all of those things, and building those relationships is incredibly important.

A sanitation enterprise in Fiji.

A sanitation enterprise in Fiji.

It's really interesting point. I hear that time and time again about the importance of having a really quality team, and the personalities behind those, so it's great that you bring that up again. [17:16]

I was at the Impact Summit last week, the annual conference for the sector.

How did it go?

It was great. I just went because, I obviously know the content, but I went to see everyone, and it's great to have everyone in the sector there as well as some international players that you might have heard about but haven't met before. There was a couple of sessions I went to where they were asking investors, particularly if you were investing in the region, and sitting on large funds ($100, $200 million funds); and they were also saying it's about the people.

It's all about the people. That really strong management team is what we look for more than anything else.

You just hear it all the time.

Very, very interesting. You mentioned Luke from Vanguard Laundry before. Outside of Australia are there any countries that you think are really leading the charge when it comes to social enterprise or social innovation in general?

There's some interesting things happening in social innovation around Europe. I think it's a needs must thing, where they're really in the crapper basically as economies. They're having to think outside the box. I think in some ways globally, the GFC has had a similar effect. It's really pushed us to think differently about how we spend money, but I think in terms of social innovation you're seeing interesting things out of Portugal and some other European countries.

In terms of a great country on social enterprise, Scotland's probably my favourite.

They're amazing, and the way that they've restructured the government. They've given all the government ministers exactly the same KPIs, which was astonishing. That's going to encourage collaborations instead of competition, which you do see between government silos.

Then they've created an infrastructure for the development of social enterprise. It's not perfect, but it's really intentional, and they've understood that social enterprise is probably the best way to grow their economy and help people at the same time. They've gone gangbusters for it, and you just don't see anything else as brave, I think, as the very comprehensive approach that's Scotland's taken. England has also done a great deal, but I think Scotland has taken it that much further.

It certainly seems like it with the Social Enterprise World Forum next year in Edinburgh as well.

I'm very temped for that. It's on my look and see list.

Yeah, for us too. It'll be fantastic to see how that unfolds, and just bring those amazing people together.

We've had the Minister who is responsible for social enterprise, Yvonne Strachan come out a couple of years ago, so when I was still at Westpac actually, I think Westpac brought her... Someone brought her out, but Westpac had an event with her. She was just phenomenal. I'm really interested to see if I can swing it to go there next year, how far they've come since in the last four or five years. They were pretty amazing then.

They're only going to keep moving forward at a fast rate, it seems. In terms of collaboration with local government and council, how might communities most effectively be engaged by councils, for example, in order to best co-design effective solutions that are responding to really complex problems? [20:05]

We're starting to do some work with local councils now. We haven't, up until this point, so it's really interesting that that's changing.

It's about design.

It's a bit like what we talked about for PNG, and it's thinking about what you want to achieve. We're having those conversations with both councillors and the executive teams and councils, and saying, "What does your community actually need?" One of the councils we're working with is in a quite well-off area, but that doesn't mean there aren't social issues there. What do the communities need? What they often ask when they do consultation is they'll talk about masterplanning, and they'll say, "What do you need in a retail centre? How much car parking do you need?" Or those kind of things.

It's a question to ask, but it's not the question to ask. I think the question to ask is, "what worries you about the future of your family? What issues are you struggling with as a family now? What concerns you and your neighbours? What are you talking about?"

Get to the social issue that you want and leave the solution to the side. Identify the social issue.

For my money, I think there's two things that we should be worried about in Australia. One is trauma and the effects of trauma are far-reaching, and we're seeing them into family breakdown, we're seeing them into drug and alcohol issues, right through to out-of-home care comes from a place of trauma, not intent, but it also creates trauma not intentionally.

We've got multiple generations of young people coming through and then being parents and so on, who've basically been traumatised, and I think we often think about these kids who are in foster care, say, and particularly when they come out, as troublesome, bad kids, things like that. They're kids who've been traumatised. That's it. I think if we looked at it like that and understood it's physical, emotional, and trauma of the brain even.

If they had a broken leg, we'd respond. but because they have an injury to their development because of the trauma and the effects on the brain, we don't see it in the same way, and we don't treat it in the same way.

Addiction to anything comes from a place of trauma, and if we saw it like that rather than a character failing, again, we might treat it differently.

How are we thinking about the effects of trauma, and how we can support people to recover from those effects rather than judging the behaviours that we're seeing, which are only a reflection of the trauma. That's the one side, and we often focus a lot on that. The other one, and very related to trauma is social isolation. People are isolated. For one of the councils I did a piece of research around the mental and physical health implications of social isolation. It's terrifying. It doubles your chances of dying. It increases your chance of dementia right through to Alzheimer's and schizophrenia by 64%. It's amazing. It dramatically increases your likelihood of cardiovascular disease. You get cancer more often, but you heal more slowly. You have greater inflammation and all these things, and these are medical journals. These weren't pop culture stuff I was reading. I was going straight to the source around medical journals and reading what the research was saying. It's incredible. In well-heeled suburbs, we're seeing huge implications in mental and physical health, which will lead to trauma and addiction and those kind of things, family breakdown and so on.

We need to solve for that, so the question councils need to be asking is helping people to express what's going on in their lives.

In Australia, I think we have a culture of we don't talk about difficult things. We talk about problems, but we don't talk about pain, and so if I'm lonely, I'll try and keep it to myself. If I'm sick, I'll try and keep it to myself, because it's a bit of a failure. Whereas all my years in Africa, people just had a really healthy attitude to pain, and they said, "Today it's you, tomorrow it's me. There's no shame in it, and what we can do is support each other." They just used to muck in. People would talk about it more. I think it had less, therefore, shame. For councils, how do you have conversations with people about what's really hurting them, and how can a council play a role in that?

I think local government is better placed than any other part of government to address social isolation, which I think is just across the board. It's a pandemic in my opinion.

I think councils are absolutely key, so I'm on a bit of a, crusade's too strong, but I think a growing focus of working with councils to see what we can do at that level, at more a preventative, because councils create the landscape on which connection is built. If they know and can design for them intentionally, a bit like our family friendly roads thing, if they can design for that intentionally, they can increase community connection and connection between families and individuals and so on, and people will feel more supported.

We're not going to need as many government programmes if we've got each other's backs.

I think that's all in council's remit. I think councils are incredibly important for the future of the country.

Most certainly. In working across all these three sectors yourself, you've worked with small to very large organisations, when it comes to collaboration and we've been talking about collaboration with councils now, what do you think are the fundamental ingredients to create a culture that really allows for the best collaboration to happen? [25:22]

I think there's two things. One, obviously is trust.

Any collaboration will be really difficult and the only thing that gets you through is trust. I think it's trust person-to-person.

We did a big social innovation project at the RNA here in Brisbane, and that took two and a half years to get up. The individuals involved, so the key people in each of the partners, and their ability to stay connected because we trusted each other, (there were three of us), is the only reason that project got up. The relationships between the three of us were strong, and are still strong enough to create the tenacity you need to get through these collaborations. I think investing in building those strong relationships before you start, and it can be just one person in each organisation.

Actually spending some time together, getting to know each other, and building trust and really being vulnerable and putting yourself out there to do that, I think, is incredibly important.

The other thing at an organisational level is failure.

Most organisations hate failure, and they punish failure. Of course there's no innovation and collaboration as a result. Then they say, "We need a more innovative culture," but you have to stop punishing people for failing because you absolutely will. You're going to fail.

It's going to take longer. There'll be setbacks, so how do you create an organisational space that allows for the time it takes to do that, and for the ups and downs, and the highs and lows, and the failures that will absolutely happen, guaranteed?

If you want these cut-through ways of working, you've got to create, the senior leadership has to create, the space for the people who are working on these projects. Protect them from the normal consequences of failure, otherwise it won't happen. People won't take the risks.

Inside government particularly people are really punished for failure, very strongly, and not surprisingly the further you go along in government, the less likely you are to take risks to try and do things, and so on, because you've been punished for years, and so your tolerance is really low to lift your head and try something. Whilst it's frustrating to come across that, I have a lot of empathy for the people in those roles who are being punished on a regular basis, for just trying to do something that works.

I think that senior leaders in government, in corporate, in not for profits, if they can create space that allows people to fail and manage the risks of that, and particularly in government you're talking political risk, but provide some cover for that, otherwise we're just always going to continue doing what we're doing, and clearly it's not working, because we're heading towards a massive blowout on every level.

What we've been doing is not working. We've got to be brave enough to protect people and allow them to fail.

Which organisations then do you think are allowing their people to fail and to come up with some really innovative solutions that are then responding to these complex community issues? [28:32]

Very few at this stage, and what I'm seeing and I did it myself, so I know how it goes, is the individuals are taking the risk on themselves, and they're just doing it anyway, and they'll live with the consequences, because they feel strongly enough about what's happening. They're not getting that organisational support. For the most part it's not happening.

Is it about asking for permission or forgiveness?

Always forgiveness. When we did the first impact bond, the Benevolent Society one and those first two that New South Wales did, we asked for forgiveness and fortunately it worked, so we didn't have to be forgiven.

We didn't go right the way up the chain to ask for permission, because it would have got bogged down.

It was still just an idea at that stage, and so we all took it on ourselves to just put an application in for that first expression of interest, for that first bond, and give it a crack. I think that's how we're currently seeing things happen, but what that means is, it's small pockets of innovation with individuals who are brave enough or whatever it might take to just try it and see, and see what happens.

Sometimes that has terrible consequences, and you lose jobs and all that kind of stuff. The people who do this kind of work are brave, and so that's what it's taking. If we're going to get it at scale, we have to have the leadership of these organisations providing cover and being aware of the implications.

People from the leadership positions will say, "We want an innovation culture," but they don't fully understand the cultural implications of what that means for the organisation of failure and trial and error. We're getting to a point we've not got much choice.

A cocoa plant in PNG.

A cocoa plant in PNG.

To finish off then, which books would you recommend to our listeners? [30:23]

I would say when you're not working, get a life, and do not read a work book, because this work is hard and you've got to stay on top of your own energy and focus and things like that. I don't read outside of work at all. I'll read all this research, and that kind of stuff at work, but if I'm in bed at night and every night I'll read a chapter of something, but for me it's got to be something that's going to refresh me. I quite like historical novels, because I like a well-written book, but I also like to learn something about history while I'm at it, just because it's interesting. That's where I often go.

I think it's really important we take better care of ourselves. People who do this work are notoriously bad for boundaries.

So I think put down the work books, and particularly, a lot of my friends when they go away on leave over the summer holidays, they'll take a big, fat pile of books they want to read. They're all work things. Oh my God. Stop it.

We need to down tools and refresh, and whether that's a weekend or whether it's the summer holidays, we've got to get serious about taking better care of ourselves.

I think that's a great point of reflection, especially coming up to the Christmas holidays.

I'm not going to read a book. I'm stocking up on jigsaw puzzles and things like that!


Initiatives, resources and people mentioned on the podcast


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