Nicola Stokes On Comprehensively Supporting Social Entrepreneurs Using Impact-Led Philanthropy
Nicola Stokes is AMP Foundation General Manager and Director of Community Council of Australia. Nicola has held national and international leadership positions as CEO, senior executive, and director, in the financial services and for purpose arenas.
Nicola believes that developing partnerships which result in increased market share or revenue, underpinned by operational excellence, are key capabilities for any executive.
Nicola practices a leadership philosophy with positive psychology at its core as a way of creating environments within which individuals and ideas thrive. Nicola thrives in the complexity of positive and intelligent engagement with a variety of competing stakeholders, while effectively balancing the inherent tension between relationship driven and governance focussed organisations.
Nicola was the CEO Magazine, CEO of the Year Finalist 2021, Telstra Businesswomen’s NSW Finalist 2015 and the International Quality & AMP; Productivity Council, Thought Leader of the Year 2008. In 2007 Nicola was a member of the United Nations Environment Program Finance Initiative (UNEPFI) Steering Committee and has been a member of various Government health advisory panels.
Nicola is a graduate of Monash University, INSEAD Paris and AICD and when not focussing her energies in the for purpose sector, Nicola runs a merino sheep farm, with her husband George, in the southern tablelands of NSW.
Nicola discusses the evolution of how philanthropy has supported Australian social entrepreneurs and developing a more sophisticated understanding of impact investing's future potential.
Highlights from the interview (listen to the podcast for full details)
[Tom Allen] - To start off, could you please share a bit about your background and what led to your passion in leadership and supporting for-purpose initiatives?
[Nicola Stokes] - My career is not an unusual one, but I did spend about two thirds of it in financial services and banking, and then about another third in the charity or not-for-profit space. My story is in the link between those two spaces, or the step I made from one to the other. I'd achieved more in my corporate career than I ever expected. I had more material things than I had imagined ever having as a young child growing up in Ireland. But I got to that place in my life where I thought, "is this it? Is this all the happiness that material possessions can bring me?” It was quite a shock, but luckily, I was young enough to work out there must be more to my working life than this.
Although I loved my roles in the corporate sector, that's not what I wanted to focus on. In those roles, I led hundreds of people in countries around the world, but then I also had specialist functions. That leadership journey around scale and then back to managing smaller teams is important, because if you're doing leadership well, in my experience it's quite tiring. To take that mental break and get back into being a specialist is important. But when I got to that point, I started asking questions like, "who am I? What is the world like? What do I want to be when I grow up again?" I reflected on what else could I do and remembered that very early on in my career I was a HR professional. It's so easy to say now in a couple of words, but when I thought about people being the best that they can be, I wondered what holds them back and what stops them achieving their potential? To my way of thinking (at that time), it was their mental, emotional, or physical health.
I left the world of corporate financial services and went looking for a job in health and the charity sector. I became the first non-health CEO of the Australian Diabetes Council, but that thinking has evolved in this decade. This concept of health (or lack of), and what holds humans back to a higher-level thinking, for me anyway became about the concept of prosperity.
Prosperity is a way of thinking, being and living, it's not actually about money or things.
That was my second evolutionary thought process, and thanks to the Australian Diabetes Council, I was then the CEO of Special Olympics Australia, and then the Sydney Children's Hospitals Foundation, all in this charity space. That developed my thinking clearly. Those were big milestones; the shift in moving from corporate to charity, and then the shift in thinking from health to the concept of prosperity and what that means to me. Ultimately, my greatest milestone was moving from Sydney Children's Hospitals Foundation, which frankly I just thought was going to be my last job for the rest of my life! I do tend to stay in places for a while, I enjoy the connectivity. But then in SCHF, we were looking at philanthropy, and some of the things that I observed at that point in time was that philanthropy was becoming much more mature.
AMP Foundation Tomorrow Maker, Amar Singh with Nicola Stokes.
Philanthropists were not just giving; they were wanting to understand more. They wanted to be involved more, not dictating where their money went, but more understanding of what impact would be achieved. There was such a level of maturity and sophistication. They were not just looking at their own legacy and what they wanted to achieve, but through a broader impact lens. We developed a program called Green Light, which was taking novel paediatric research ideas that had never been funded and placing a program around them (which is the same as how films are funded) to get that novel research upfront.
Timing is everything, in life, careers and community.
I then happened to get a phone call about becoming the GM of the AMP Foundation, at a time where my own thinking had developed into the concept of social enterprise being this extraordinary creative and innovative space between the for profit and for purpose sectors. I jumped at the chance; I'm not embarrassed at all to say I was so excited. I didn't play it cool at all! I said, “yes, I'd love to be in the loop for that role." That's a little bit about my journey and the key milestones of my career. Prosperity is for everybody, the planet, and the people.
As the AMP Foundation General Manager, can you share more about the Foundation and what other opportunities it is supporting within the sector?
I'd love to share just a little bit of the history and story of AMP before I get into the future. I also spent a decade of my career at AMP, so this story was real for me to remember as opposed to learn. Back in 1848, there were three philanthropists who wanted to create an environment where life was better for everybody. Their idea or concept for creating a mutual society was for the benefit of women and children whose men went to war and didn't come back. There was no social security at that time. Post-war, there were harsh working conditions, and men lived only into their forties or fifties (if they were lucky). Then if they died, there were no savings, and women and children were left destitute. These three gentlemen observed this, so they wanted to create a better place. I talk about 1848 because it was in those months, they were imagining the Australian Mutual Providence Society. It came into existence on the 1st of January 1949. Through that whole history, of nearly 175 years, every step forward has been for a mutual and provident society for the benefit of the people who were part of it. AMP was always looking at the impact on society they would have while also generating revenue. Not only are they (to my way of thinking) the first Tomorrow Makers, but AMP was a not-for-profit and a social enterprise.
All the way through AMP’s journey, you can see in its history how it gave, donated, supported, and mentored society generally. It was very cognisant of its role. But if we take it through its philanthropic lens from those origins, it also in 1992 decided it should probably not have the Foundation intertwined within its business, but as a separate entity. That's when the Foundation itself was imagined. The things it has done is it's helped fund the establishment of Social Venturers Australia, The Centre for Social Impact, The Funding Network, and it created the first Social Impact Bond. It's done all this extraordinary work, keeping loyal to that heritage of why we were established in the first place. But as a separate entity and a separate self-funding entity, one of the most extraordinary things was the creation of the Tomorrow Makers program, and that's what I would like to focus on, because there are some threads and key pieces of the Tomorrow Makers program that are going to bring us through to the future. When I look back from 2014, there have been 354 Tomorrow Makers. I started looking at the funds the AMP Foundation donated (they were one-off grants) and what was achieved because of those one-off grants. It was seed money. They were giving grants to energise individuals to take those extraordinary ideas they had, build them, and then go and seek funding elsewhere. It really was early capital. It was non tied, and because of the way the AMP Foundation is set up legally, which is something we might talk about a little later as an important thing for the sector to understand, we were able to give to individuals. You didn't have to have the ‘deductible gift recipient status’, you didn't have to already be trading, you didn't have to be a social enterprise or social business. There was always this lovely match between impact and business, so business for good is absolutely what the AMP Foundation has been doing from the get-go. The opportunities I would love the audience to be aware of is that we have launched our 2023 Tomorrow Makers program. Also, we have launched Spark, which is an updated, modernised, much more focused, and intelligent way of giving that initial grant.
I'm proud to also announce we are partnering with Impact Boom to deliver this first program over 20 weeks, to people who apply to be part of the Tomorrow Makers Spark program.
We love your work; and what you've done with others. There are lots of extraordinary organisations doing various things in the space, but Tom, you understood us most. You really understood what we've been doing since 2014, and how by adding to the money, this wrap-around support, mentoring, guiding, and workshops, the group will accelerate those extraordinary ideas, to get them to a point at the end of our Spark program where they apply for more funding with us.
Through our Ignite program, there are about another 12 months we imagine, and then after that is our Activate program, which is two to four years. This is the important thing; everybody out there who has an idea. And I think that's the important piece which you understood Tom; what is your idea? Where did it come from? What impact do you want to make and how will you measure it? It's basically at the core of what we want to know right now, rather than having to build something much more substantial.
We believe [The Tomorrow Makers Program] will unearth some of the most extraordinary ideas to solve some of our most wicked problems in society.
Nicola Stokes presenting at AMP Foundation’s 30th Anniversary Celebration.
What have you observed in the Australian philanthropic sector and how has it shifted over the last five years?
Compared to other countries in the world, we think of philanthropy as a more early-stage process or mindset of individuals with wealth. But I have seen acceleration over the last five years to have been quite extraordinary, as there is a greater understanding of what people want to achieve. One of the greatest things I have seen is philanthropists are involving their young adults and children in their decision-making process. They are helping them understand what is going on in the world and how venture philanthropy if we're discussing social enterprise can not only impact individual lives but have a ripple effect through society. I think younger people really get this idea. They understand the world as much bigger than them and their families. If part of your prosperity is that you have funds, how do you best use that for the greater good of others?
That's probably the biggest shift I've seen, but also philanthropists are educating themselves at a greater rate, and we're not just talking about people with ultra-high net worth. Philanthropists want to see change in the world, that's why they give, whether it’s a small or large amount, whether they leave millions or 1% of their will. This conversation is much more active and present, as opposed to viewing philanthropy as something you do when you're older or dying. It's about how can I start my legacy now in my teens or my twenties? What can I give, money, time, or skills wise? There is quite a broadening of the term, and I embrace that very clearly. I know that Philanthropy Australia wants to double philanthropy by 2030. Government is behind that vision, and that's not surprising because philanthropy can de-risk a lot of concepts the government can adopt in the early stages.
That's the second biggest shift I've seen. In the past, philanthropy has been a conversation about what do we do on top of government after they have funded society to a good level. If I just talk about health for a moment, we have a great paediatric health system. Philanthropy is top of that; it occurs after that system is in place.
However, I have seen a shift to thinking that governments can't take risk the way venture philanthropy can. Maybe the philanthropic investment comes first as a proof point to show the actual impact, and then the government can do what only a government can do, create scale.
What is your opinion on the state of impact investing in Australia, and what do you believe needs to change in that ecosystem to help it develop further?
That’s a great question for me because I'm in the very early stages of considering impact investing. I've been in my role for just over six months now, and now I have a fund for impact investing. This might be a little bit technical, but I also think that people need to understand what I’m about to say. This message is especially for people who want investment in their social enterprise, all foundations are not the same. There are quite interesting legal structures that run this sector, so I might just for a moment talk about that. If I talk first around the state of impact investing, there's this real conversation about, "so what is impact?" This includes the number of measurements and methodologies; there are so many. I don't think there needs to be one, I don't think that's wise. The skill is matching the impact methodology to the impact you're trying to achieve. Demonstrate is probably a better word.
The other part of that from history or my own experience as well is that if you put too many rules around these creative early-stage sectors; you might crush it with policy and procedure. You could end up just regulating it within an inch of its life, and then all this innovation and creativity becomes too hard to engage with.
Now, with AMP Foundation, to think of us as a foundation we've got two pieces. We have our annual program, so think Tomorrow Makers, and then we have a corpus for investment. A portion of that corpus is allocated to impact investing. There's this discussion I'm a part of and learning about, where people are saying the entire corpus should be invested in impact investing. The reality is (and AMP Foundation is not alone here) that there are lower returns over a certain amount of time. I think a portion is intelligent, then as long as the balance of the corpus is invested well, and there's no harm being done because of that investment, it's what funds the annual program. At this point in our existence, we're happy with our balance, so impact investing itself needs to be part of that broader landscape as opposed to becoming a standalone killer of these early thoughts being developed.
I believe my observations will develop and mature over the coming months and years. But I do think it's important to understand this shift, where the funds come from and what they do. A one size fits all approach will not work in this sector, nor does it work in any.
As a social entrepreneur looking to engage with foundations like ours or gain philanthropic funding, whether it's a straight up grant or philanthropic venture capital, it's important to spend a few moments and understand the organisation who's providing the funds to you.
The progress made to date in impact investing is good. I still think there is more to do, but I see the momentum and that's exciting. I see expertise at a more mature rate than I initially understood, and then the entire momentum that is gathering to ensure all foundations like ours have some percentage of their corpus allocated to impact investing.
What general advice would you give to purpose-led entrepreneurs who are working hard to take their enterprises to the next level?
There are two probably things that come to mind.
It's an exhausting journey to get something up and running.
At the beginning, you have so much energy and adrenaline to keep you moving, especially as your idea is progressing and gathering momentum. But also, there are times when it's not going the way you wanted it to, or it is not happening at the pace you wanted it to. The first thing is (you) need a mechanism to check in with yourself and see how are you going? How is the idea progressing?
Reflect on your idea, the progress you've made, and have an almost forensic look backwards to see how you are feeling. Without that drive of the founder or original social entrepreneur, things can start to veer off course. As it gets too hard, you may start following a different path or look for other funding to keep going.
It’s a worthwhile and energising exercise to do. Similarly in that vein, when you are telling your story, but you've only been a part of it for one or two years, you can have such a passion for it that jargon can come into your language. You operate under this presumption that everybody understands the details of what you've just been through.
Keep asking yourself, "what is my elevator pitch again? How do I get back to that succinct, clear, clean idea where I can talk about what I'm trying to achieve, why I'm trying to achieve it, and how I'm going about doing it?”
Don't be afraid to talk about the successes and failures of your journey, because if we're discussing venture philanthropy, and you think about straight up start-ups with venture capital, they expect an 80% failure rate. They usually find business successful 20% of the time, two major unicorns, that ensure they're in a pure profit play. 80% is such a small investment compared to the revenue from the 20%. In venture philanthropy it is the same, it's just not looking for unicorns or those massive financial returns. It's okay to talk about what hasn't gone right; it shows a level of sophistication in your own mindset about your idea. You know that not every step you take will be a success.
Nicola Stokes (AMP Foundation General Manager), Mandy Richards (Global Sisters), Alexis George (AMP CEO) and Leah Armstrong (First Australians Capital).
Those would be my two [recommendations]: look after yourself, have a real reflection, make sure your energy is still there, and then just make sure you are clear when you're talking to people about where you are on your journey. Don't presume they know and understand the journey you've been on.
One thing as well that just dawned on me, it might be nice to go back to the people who were around you at the start of your original idea. Ask them to tell you again what it was like when you told them about your idea. Get them to tell your story back to you, it could be quite energising.
What inspiring projects or initiatives have you come across recently that are creating a positive social change?
At AMP Foundation’s recent 30th year celebration, we awarded two 30th anniversary, $1 million grants. We awarded these to two extraordinary organisations: First Australians Capital and Global Sisters. These organisations inspired me, particularly First Australians Capital, with how they can be strong enough to say, “we want the grant to fund early capital start-ups for First Nations led businesses. We're happy to bring you on the journey, but we know how to do this, and you don't.” I'm paraphrasing obviously, but it was so clear, and it's been a relationship between Adrian Appo from 2014 (who was a Tomorrow Maker at the time) and these funds. The Tomorrow Maker Grant in 2014 was to help him develop this idea, and then to see it go on the next stage of its journey. It's already supported over 200 First Nations led people. Being so clear on the type of partnership and relationship they wanted with us was stellar for me, they have great credibility in the leadership there. Ultimately, I'd love them to move from our annual program and granting side to become one of our impact investing organisations, so hopefully we can create that longer term relationship.
Seven of our Tomorrow Makers were Global Sisters, and we've had a long relationship of not only Tomorrow Makers, but with mentoring, coaching, guiding, and providing skilled volunteering with them. It's been a quite a deep relationship for a long time. The $1 million 30th Anniversary Grant we’ve given them is for an investment in a piece of systems change, which will focus on [single] mothers and how you create environments where they can create social enterprises and thrive. I think this will be quite wonderful. When I talk about them, it's because they're so recent. But you should also think about STREAT, which is about youth getting the opportunity to thrive through work, or Turbans for Australia. Then there is The Mini Farm Project, which is close to my heart and growing food in unused urban spaces. That food is donated to people who need it, usually to Meals on Wheels. You can look at Hotel Etico, Tender Funerals, and there are some other programs that haven't been a part of the Tomorrow Makers or AMP Foundation. There's Feel the Magic, which is for bereaved children who've lost a parent or a sibling, and then a lovely program which we're doing a little bit more work on with Greg the original Yellow Wiggle! He has a focus on CPR training, and this vision that there will be a defibrillator in every street of Australia. There's a lovely story behind that. Watch this space and we'll pay attention to that going forward as well, it is quite an extraordinary goal. There's so much going on, and our role is to support them financially very quietly and with any other skills or capability training we can to ensure they make their dream a reality.
To finish off, what books resources would you recommend to our listeners?
The thing I'm spending the most time on now is what are called the Inner Development Goals. Through the Sustainable Development Goals, a lot was achieved, but the general sentiment is we haven't achieved everything we could have with them. They've now developed this program, which is called the Inner Development Goals, which is built on the premise that maybe we didn't all achieve what we wanted to because we hadn't had that conversation with ourselves and what we wanted to be as individuals, communities, and society first. I think that's powerful, but also, I love the concept of 'shared value'. There's the Shared Value Project in Melbourne, they have some great resources there.
I also asked my team (we have a meeting every week) about what they are doing and what are they focused on? Things like Andrew Purdy's The Hidden Philanthropist and then The Resilience Project came up in discussion. These are some of the things that are really engaging my staff because this is always to our way of thinking as a team. It's a mix between head and heart in the reading and podcast spaces. Also, for me, it provides a little bit of escapism too. A bit of horror and humour doesn't go astray in my day-to-day life!
