Philanthropies join forces on Australia's catalytic capital

Four Australian philanthropic foundations have united to establish the Catalytic Capital Consortium Australia (C3 Australia), a partnership designed to increase the flow of catalytic capital in Australia.

Hand Heart Pocket, Minderoo Foundation, Paul Ramsay Foundation and Snow Foundation announced their collaboration at the Global Impact Investing Network (GIIN) conference.

Catalytic capital is investment that takes on greater risk, often by accepting lower financial return, than a typical investor would tolerate, to jump-start projects that do social or environmental good.

C3 Australia is inviting foundations, family offices, institutional investors and other capital providers to help build a more confident, connected and practical catalytic capital market in Australia.

"Australia has both the impact enterprises with the ideas and the impact investors with the appetite to deploy more catalytic capital," Hand Heart Pocket chief executive Sara Parrott said.

"What we haven't had is a shared effort to build the market, provide the tools and generate the data to give investors the confidence to act.

"If we can help shape new and better ways to deploy catalytic capital, so that more of it reaches impact enterprises, this will be one of the best ways for us to use both our philanthropy and our capital for impact."

While C3 Australia will not provide catalytic capital directly, it aims to shift traditional investment mindsets through grants, demonstrating how catalytic capital can manage risk, prove new models, and create pathways for mainstream investment.

The Australian foundations have approved an initial $10.5 million granting pool to launch C3 Australia, with funds to be managed by Paul Ramsay Foundation.

"Through our impact investing work, we have seen first-hand that catalytic capital can play a critical role in filling financing gaps for impact enterprises that conventional capital cannot," Paul Ramsay Foundation chief executive Kristy Muir said.

"Yet we know that identifying and surfacing those opportunities is one of the biggest obstacles, particularly in the for-purpose sector, a market that is already underfunded. We are delighted to help bring philanthropy together to form Catalytic Capital Consortium Australia in response."

Expressions of Interest for grants for evidence and market-building initiatives will be available for eligible Australian organisations from February 2027, with funding available for an initial three years.

C3 Australia is launched in partnership with the US-based MacArthur Foundation, one of the original architects of the Catalytic Capital Consortium (C3) - an initiative launched in 2019 to accelerate the flow of catalytic capital across global sectors and geographies.

"The success of the original Catalytic Capital Consortium shows what is possible when philanthropy works collectively. We have an opportunity to strengthen Australia's impact investment market and help more social and environmental solutions scale," Minderoo Foundation chief executive John Hartman said.