Funding Projects that COULD work, not WILL work | Tom Dawkins - Co-Founder & CEO of StartSomeGood

Foreign.

Hi, I'm Jessie Ballantyne and I love grants. I sold my house to fund the launch of the Grants Hub because I truly wanted to make grants easier to find. In the very early days, I ended up running the Grants Hub from the ICU ward of a children's hospital. Let's just say I'm committed to the cause of helping you find grants. If you're looking to get real with grants to learn what works and what doesn't, to hear from grant experts from across the country and have some fun while we do it, then Grants Uncovered is the podcast for you. Tom Dawkins is what I would call a die hard, passionate social entrepreneur. He is the co founder and CEO of Start Some Good and Social entrepreneur in Residence for Optus Future Makers accelerator. If that isn't enough, Tom is also a non executive Director at the center for Social Impact, Director at the Centre for Civic Innovation, and a founding board member at the Social Enterprise Council of New South Wales and the act. When a program like Impact Boom's Elevate and Accelerator program pops up in your email or social feed, you can expect to see Tom involved there too. Tom's thoughts on grants and innovation is what led me to invite him onto Grants Uncovered. I'm not expecting this to be a cruisy. Grants are amazing conversation about how incredible grants are. Rather, I'm hoping we get real about some of the downfalls and the frustrations of grant funding, specifically around some of the limitations that funding providers place on providing grants for truly innovative, risk taking, cutting edge projects. Thanks so much for joining us here today on Grants Uncovered.

Tom, thanks so much. That intro definitely made me reflect about how I have to get better at saying no to things, but at least makes me feel tired just thinking about it.

Yeah, yeah. And I didn't even put them all in there. So I kind of, you know, took a snapshot of what we finally got on the go. Jumping straight into grants now, Tom, let's do it. So what was your I know you've got, you know, varying thoughts on grant funding and I can actually relate to some of that. And we'll get into this, but that's one of the reasons that I wanted to get you on this podcast today because not everything about grants is wonderful, but I wanted to start with just what was your first experience with grants?

My first formal grant would have been when I was at university. I founded so I subsequently founded a high school student organization there, a university student organization, then ultimately a not for profit that continues to this day called vivewire and so while I was at university, in the setting up of vivewire, I'd got some local, I guess I must have applied for, I don't really remember the process, getting some, you know, campus grants for doing events and activities on campus. Very involved in that. That was important to that kind of university student organization. But then I wanted to set up something that was, you know, obviously was going to be founded by university students, myself and others, but wasn't about university students, you know, had a broader mandate. And that was the organization that became, you know, the not, which continues to this day. But we, that was when we started actually applying for, you know, formal grants as a. As a. As a, you know, as an incorporated.

Like the application process.

Not for profit association. That's right, yeah. And we actually kind of incorporated prematurely. There was a grant that we really liked the look of that we thought was a good fit for teaching young people technology skills and building their capacity to tell their own stories, which is what we're really into. And we thought we could help with that. And so we partnered with a youth organization, a kind of youth services organization in the inner west. And then they pulled out like a week out or something, so they couldn't apply with us. And so we rushed to just incorporate in order to submit that grant. Didn't get the grant. And that actually proved to be a bit of a mistake, probably, and kind of having rushed into being a real legal structure kind of a little bit prematurely, because it wasn't probably until almost two years after that that we actually got a grant for the first time, which was from the foundation for Young Australians. It might have actually been before they became the Foundation Australian, it might have been the Queen's Trust for Young Australians or whatever. Their previous incarnation was a small group anyway, and they were a major supporter of ours while I was at Baibua. So, you know, probably took two years to get the first grant. But in the six years after that, I raised about a million dollars into the organization from a variety of sources. But I certainly learned how hard it is. I mean, some of these topics we're going to talk about around supporting innovation is really where I began to learn how hard that was because I was a young person proposing ideas that I had never done before, but neither had anyone else. You know, like we opened the first co working space in Australia. We sent. We were doing stuff online that was, you know, sounds really boring now, but was really cutting edge for 2000, 2001. Yeah, yeah. You know, holding Verge.

Like we didn't yeah, when we didn't know if the millennium bug was going.

To ruin the world or not, just after that. But yeah, right around, exactly right around that time, that was still a present concern. But you know, doing, doing very kind of proto versions of what would now be called a virtual summit back in 2002, sending youth reporters, you know, 18 year olds traveling around with the Prime Minister and the opposition leader during the federal election 2004, like I said, opening the first co workspace Australia. So literally no examples, no, you know, no impact met, you know, no metrics that could prove any of this would work. No evidence that we, even if it could work, that we were the right people to make it work. You know, we're a bunch of early 20s somethings proposing to do stuff we'd never done before, that no one had done before. And it was, as you might imagine, hard to find funding. And we were very fortunate that the Foundation Australians existed at the time as primarily a grant giving organization. They're very different now. If anyone goes and looks them up, don't expect to find lots of grant opportunities because they're a programmatic foundation now. They raise money in order to run opportunities, which is they do great work. But I sometimes feel sorry that that means there isn't the equivalent opportunities because that was what really. We probably, probably four of our first five grants were from them for slightly different things growing over time and they.

So did you approach. Sorry, can I just jump in?

Yeah, yeah, please.

Did you have to stop me so much other. Yeah, no, it's all good. I was just going to ask on that. Did you approach many other foundations, you know, grant providers before FYI and did they say no or, you know, it wasn't the right fit or there just wasn't even anything that you could apply for then.

It was a mix. I mean we were never. VYPUI still isn't a tax deductible entity. It's never achieved DGR status. I could never crack that while I was there and no one has since because it's, you know, because the work that Vibeway does is around building a more active generation of citizens, building the capacity of young people to participate in creating the future that they want through, whether that's through activism or storytelling or entrepreneurship, which is not a DGR category, as I'm sure you know, there's no, you know, it really should be, but there's no category for making a better democracy. And so we were never, you know, enough of it. We were never a registered training organization, you know, Enough of an education. We used art and culture a lot, but we weren't enough of an arts organization. So we never had dgr. And that obviously ruled out a bunch of, you know, of grants. There's still, there was still, you know, plenty out there, as I always tell people that don't require that you're tax deductible, but for which being a not for profit incorporated association was sufficient. But for those, it was still obviously very competitive, very challenging. And we in particular had, I guess, the challenge of having no evidence that anything would work that we were proposing to do. We were, you know, we were really focused on how to use emerging technology and media and, you know, harness kind of, kind of evolving youth culture in a way that built a generation of more active citizens. And it just, you know, I think not everyone got it. Not everyone just understood how it could work and not everyone believed us, which is how it goes, you know, and we were. And that's why I think having FYI was so fortunate and why I worry that there's maybe not enough equivalents of them today, because they explicitly were about helping people try new things. Not just new things, but new people try new things, I guess, is the key thing, because they're about supporting young people's projects. The expectation, the assumption was that the vast majority of those projects would be initiated by someone who, you know, hadn't necessarily done it before, couldn't prove that it would work, but had an idea that they wanted to pursue and FYI existed to help them pursue. It still does, just more, you know, just more through programs and capacity building now. And so, yeah, I think it would have been really hard without them because obviously, thanks to getting a number of grants from them and building that relationship over time, those grants slowly got bigger. I think our first grant was a couple thousand dollars, then we got 1 for 5, and then for 15, and then for 30. Eventually our biggest evergram for them was $150,000 to seed fund the opening of the co working space, without which we never could have got off the board, off the ground. That requires some serious time to create. And so in receiving their support, it obviously made us more credible in the eyes of other potential funders while also allowing us to actually build up a track record. We'd actually done stuff at a certain point in time. We weren't just speculating about the stuff we would like to do, but we'd actually done some stuff. And there was the beginning of maybe not super sophisticated, but at least some kind of levels of engagement and output. And impact that we could point to.

I often mention that need to build a grants program. So sometimes people go for the big stuff first up. And in an ideal world, you know, maybe it's not an ideal world. Maybe there needs to be that track record for some of the funders. But you know, often people need to start with the small grants and work up from there. And you know, in your case probably that track record is what the funders are seeking.

Yeah.

But at the same time it can be quite limiting too. You know, I speak to startups and people in that real innovation stage, you know that it's the brand new idea, it hasn't been done before, it's the test case, pilot projects. There is hardly any funding around for that. And I think this is a frustration and a real lack of within grants, within the whole grant space within Australia. So it's interesting to hear that you had that problem back then and not a lot has shifted really. No, we're getting accelerated programs and things coming up but still there's not a huge amount of what I would call. And maybe you're in the same boat on this truly innovative funding.

No, I totally agree with that but I think there's only so far it can go. You've got to kind of understand, I guess, the dynamics of philanthropy. I mean I don't think it would have been possible or even necessarily appropriate to give us the $150,000 grant first.

Yeah.

And for us to do a complicated three year project to build this new model of collaborative shared space. Yeah.

Probably too early for you. And then also it doesn't meet the funders requirements to be responsible giving in a way too.

Yeah, exact think there's, you know, I'm not so I don't think, I certainly don't think the right pro innovation ecosystem just means like there's money for every random idea that every person has. And so I do think, you know, I think there needs to be more money for truly innovative things. But that money would be expected to be of a smaller, you know, quantum than money for more proven ideas. And that's, you know, that's how it goes. That's how it goes with investment, that's how it goes with anything. But. But yeah, I do worry that there's far too far too few organizations who have small grants programs, you know, overtly for learning and trying new things and supporting new people. And I think that's because, you know, I think that's kind of a natural. So I guess why we do what we do at starts and good right now, if I could jump forward a little bit is because I bet I.

Was going to say, you know, you've come up with a solution really, in a way, for the, you know, the crowdfunding side of it.

Yeah.

To the grants.

I guess so. But I guess what. Yeah, what I wanted to share, I guess was what got us that point was it wasn't just when I was, you know, in the trenches applying for grants. It's really hard to kind of understand what's going on because you've got a sample size of 1 your own experiences, you know, So I knew that had been hard work, but I felt like I'd done all right. But Gia had been hard, and I didn't know if that was because, you know, maybe I'm not that good at it or maybe it's actually hard or maybe there's not enough opportunity out there, et cetera. Oh, just before I go, I move on. Sorry to drop around a little bit. The one thing I did want to say about your. About your point before I lose that thread of people who wait for the big perfect rant and they don't want to go for smaller ones is also, you're just out of practice. Like, grant writing is like anything else. You get better at it by doing it. And so I come across people exactly like you're saying, who. Oh, we're never going to get that. Oh, that's a bit of a long bow. I can't be bothered. We're so unlike. I'm like, look, you're unlikely to get every grant is the truth. And if you wait until the perfect grant, well, guess what? You're going to write not a very good application because you're going to be out of practice writing applications. So it's actually really like go for 10 unlikely grants so that by the time this, the slightly more likely grant, the grant that really sounds like it was written for you, that perfect grant we all hope to stumble upon, that is, you know, the young people creating new forms of collaborative shared space. Hang on. Hello. Occasionally that does. You do stumble upon one like that. And you want to be kind of in match fitness for grant writing when you're there. So one of the things I used to do when I was those eight years, well, particularly I guess the last five or six that was running by wise. I tried to write a grant a week, and I would try to always find something to apply for, no matter how kind of slightly longbow. And it's good practice to kind of practice your brain on how to kind of articulate what you're doing in different, you know, to frame it differently, not, not to change what you're actually doing. We're about empowering young people. But we could fit that into different boxes. We could talk about it as an education program, we could talk about it as a national competitiveness, you know, investing in innovation and building a, building a generation of, you know, skilled workers. We could talk about it around democracy and politics and social change and how to get more people involved in making a difference. We could talk about it as place based, you know, let's invest in this specific community of young people and here's what's lacking and let's do an evaluation of what's currently provided in this place and where the gaps might be. You know, we can talk about in a commercial context. These young people are a great target market for you. You should support the work that we're doing just in order to communicate and connect with them. And so practicing those different things, you know, I'd apply for grants that were like, you know, Australian Japanese friendship grants. And I'd be like, let's bring out an awesome Japanese change maker to run a master class or let's choose three of our residents and send them to Japan on the study tour. You know, you can just, you know, it's a really good practice, so when the right one comes around, you're good at it. But then, yeah, to flash forward a little bit, I moved to America after Vibewire, which I kind of spent my 20s building. I moved to the US for four years. And that was really good because I think it pulled me up to that more systemic level of my thinking. I first spent two years with an organization called Ashoka in Washington D.C. and they literally invented the phrase social entrepreneurship about 45 years ago. So they were the original organization defining and talking about and seeking to support this kind of new breed of change makers we call social entrepreneurs. People who are leveraging business like approaches and using business concepts around scalability, replicability, et cetera. But not in the pursuit, or at least not only in the pursuit of personal private benefit or wealth, but in the pursuit of social impact as well. And my job as the first digital communications director there in 2008 was to think about how social technologies could build in everyone a change maker world, but get more people involved in making a difference. And so that got me thinking more about what's the infrastructure and structures that help new people get involved in making a difference. Like myself earlier. It got me thinking about some of those challenges of Raising early funding. And then I moved to San Francisco for two years and I felt like in the San Francisco Bay area for the first time in my life I really could see what a pro innovation ecosystem looks like. And it looks like a massive tolerance to failure and a huge bias towards trying things to find out if they work rather than deciding up front what will and won't work. And I realized that part of what was so kind of inspiring, it's not a coincidence that within a year I found it starts some good. Not meaning to, not intending to have plenty on my plate and really wasn't looking to start a new project. But there is something in the water there. Well, not so much in the water, but in the air and the culture. And I kind of began to feel like I was putting my finger on what it was part of was the actual availability and infrastructure of more risk tolerant capital. And I'll talk about that a little bit in a moment. But I think it was also this kind of cultural approach to how do you, when someone shares a new idea with you, what's the question you ask? And I realized that I think in the social sector the question we ask primarily is will it work? You want my money to do X, Y or Z, will it work? Prove to me it will work. How much evidence have you got that it will work? And I realized that the question is not will it work but could it work? Is this something that could so just.

Shane so just changing that whole emphasis and perspective.

Yeah.

Like at a systemic issue, at a systemic level in Australia, we need to change that context. That's what you're saying.

Big time questioning that's what innovation looks like. I mean that's how science happens. It's not that we're hopeless at it everywhere. Like science, you know, science funding isn't just based on will an experiment work? Because that's of course the job of the experiment to find out. It's based on could it work and is it worth discovering. You know, the way we fund cancer research is not based on promise us you're going to solve it this quarter or this year. But yes, we're just committed to getting the job done and we're going to keep resourcing it until we arrive. So it's not always the case in every sector. But it did make me realize, yeah. That it is a question that closes down. It's a risk aversion question. And when it comes to innovation, why this matters is that the answer to almost everything is nah, probably not. Probably won't work. You know, we're trying to try and do something genuinely new and different. It probably won't work.

You wrote an article on LinkedIn called the Innovation Paradox. And it was this specific statement that you wrote that prompted me to invite you onto Grants Uncovered. Because for me, this podcast is about getting real with grants. It's in all of the promotional materials, it's in the blurb at the beginning that we listen to with the music in the background. We really do want to get real about grant funding, and it's not all pretty. There are challenges with it. So I'm going to read this statement now that Tom wrote, and then we're going to delve into some of this stuff. The only true way to differentiate great ideas from those that really can't work is to try things, to run experiments, and to accept that most of those experiments won't work out exactly as we hoped. But that involves risk, it involves accepting failure, it involves admitting we're infallible and don't really know the answers. This is the discomfort innovation requires, which so much of the social impact funding ecosystem, from governments to foundations to corporate CSR and high net worth individuals are unwilling to suffer through in the pursuit of transformation changes. But these are the changes we need most in this rapidly changing world, and this is the innovation ecosystem we must build.

The only way, though, that you find out what does and doesn't work is by trying it. You know, I think one of my real realizations is none of us are smart enough to figure out what's going to work up front. The world is changing too quickly and too unpredictably for anyone in any context to think that they can sit there and decide what will work or not. And so it's a much more useful question to say, could it work if it did work, is it something that we would want? And therefore is it worth finding out if it could work? Now, the only way you get to find out, though, is that someone has to make often some sort of early investment in making that possible. And so in the commercial startup world, there's kind of two categories of investors. There's angel investors and then VCs. Venture capitalists.

Yep.

Angel investors largely invest in their own money and therefore able to, you know, support whatever they find interesting or exciting or inspiring. They don't have to justify their decision to anyone. And this is crucial. Whereas VCs, they're investing other people's money, so they have to make sensible decisions because they have to justify those decisions to people. And so they like to use data you know, they like to like show us real data about how your business is going and we'll use that data to make a deliberation about whether it's likely to work or not and whether it's worth investing in. But how do you get that data? You only get that data by doing things that can be measured. And doing things that can be measured often cost money. And so without the angel investors it would be very hard for the VCs to actually make sensible decisions around what will and won't work. The tragedy of the social sector right now in general, and I, you know, I maybe exaggerate slightly for effect, I know there are exceptions to this, but broadly in general is that we have such a desperate need for innovation in this changing world to reinvent so many of the ways we do things to create better social environmental outcomes. But all our money is essentially in that VC position. Almost all of the investment in social good is VC equivalence. People who are investing other people's money and are under a lot of pressure to make sensible decisions that they can back up with data and are under a lot of pressure not to invert a commas, waste any of it. And failure is seen as waste. It's not seen as progress towards figuring stuff out. You know, something that's been ruled out, something that was worth trying, that we all learned from. It's seen largely as wastage. And so this conservatism that bedevils us comes from a really good place because I know, I mean it's not about, you know, people are doing the best they can. I've met lots of people in who work for foundations, high net worth individuals, government. Anyone I've ever met in a position of responsibility over an amount of resources that they can put towards social good takes that responsibility really seriously. But the way that that responsibility has been structured is around and everyone wants to do the most good they can do. And everyone's kind of, there's a certain scarcity mindset endemic in the sector as well because no one has enough resources to do all the good that they would like to do. So everyone's constantly feeling like, oh my God, we haven't got enough or we're never going to get the job done really. But we're doing the best we can. And that means they often feel a lot of pressure, do the most good we can do. But what that has come to mean far too often is do the most good we can be certain we're going to do or even confident we're going to do. And I think that's actually preventing us from doing the most good we can do, because I think it's not going to be enough to just increment our way towards that better future. We are going to need breakthroughs. And the problem with breakthroughs is, you know, genuine innovation is that, as I said earlier, it always looks unlikely up front. And so I have this kind of. You referenced the article LinkedIn of the Innovation paradox, but this idea in the Innovation paradox is that the paradox is that good ideas look like good ideas, but great ideas look like bad ideas. And that's because great ideas, an idea that could be great, which is to say something that could make a genuinely profound transformational impact within a particular sector by showing an entirely new way or inventing a new approach or different type of product, etc. Upfront, they always look unlikely to succeed. They are unlikely to succeed because change is hard. And so good ideas look like good ideas because they normally work with the status quo in some way and they don't challenge it too much, they build on top of it. And you go, oh, that's a good idea. I have a great example. That's not to say, and I don't mean to disparage, because some good ideas are really good ideas. A great example of this actually recently, is Seabin. I had the chance to interview the founder of Seabin, which is like a great. It's like a floating bin for marines and harbors. And as he was described as, like, we just had this idea of like, there are bins on land, why shouldn't there be bins in the ocean? And everyone goes, that's such a good idea. And it is such a good idea, but it's a classic good idea. It uses a really existing, kind of an existing framework that we understand bins. It doesn't challenge the status quo in any way. It doesn't really change how rubbish per se gets into the ocean or change kind of any of the power dynamics as to how pollution is occurring and who suffers it, deals with symptoms, cleans it up, gets rid of it, and that's great. It's really important stuff. They're doing amazing work. Love those guys. But it's in exactly what it's called, good idea. Whereas a great idea often is more challenging. You know, it doesn't. It's not just like a neat, let's do X, but Y. It's, you know, like a great business idea recently, I think, is Airbnb. And part of how, you know, it's great, you know, changed the way that people thought about procuring accommodation fundamentally, and it violated people's assumptions. Almost everyone who heard that idea up front thought it was a terrible idea because no one would ever allow strangers to stay in their home.

Well, there's so many reasons that you wouldn't do that.

Crazy idea. Why would you put money into that idea?

Airbnb should never work.

But that's somewhere a great idea.

Yeah.

If it does. Yeah.

And then it becomes culturally accepted. And then, you know, now it's like, who wouldn't?

Now it seems obvious. Exactly.

Yeah.

And as soon as, you know, it depends on your background and you know, as soon as I heard the Airbnb concept, I knew it would work because I've been couch surfing for a couple of years. And so my thing was like, I really know people let strangers into their home and they do it for nothing. Imagine if you started paying people heaps more people would let people into their homes if you paid them than who do it for nothing. So I had a completely different angle on it that based on my life experience, it seemed obvious, but that was, you know, but it's not the kind of thing that, say many venture capitalists have done. Not many rich VCs were couch surfing. So they couldn't see it, which is a classic challenge with all of this sort of stuff, with all the people who, whose job is to get in a room and decide what will or won't work is that they always, almost always have very narrow lived experience. You know, almost by definition, everyone who works for a foundation is middle class and white collar. And I know some of them have had very diverse backgrounds and family stories, etc. But, you know, in terms of kind of current lived experience. And so, you know, for a variety of those reasons, we. I realized that there is this systemic gap around risk tolerant capital for social good that we essentially don't really have an angel investor equivalent. We have all VCs, you know, even when it's a rich person's money, someone else almost always going out there and assessing deals on their behalf and once again having to trust themselves.

So, I mean, perhaps one of those solutions is creating some form of angel investment model for the social sector.

Yeah, and exactly. And anyone can do that. It's just been willing to back things at an early stage. And there are some cool examples of that. You know, it's the my Innovation Fellowship. I think it's a great program that's exactly about that. And they're willing, and they say they're willing to, you know, they got One or two big successes out of the first five years of the program, giving free each year. So out of the first 15 investments, if they had one or two breakthroughs, they'd be happy with that. That's awesome. But they're only doing three a year. So it's where we need so much more of that kind of thing. I think every foundation should have at least one grant round of some scale that is explicitly for ideas that may or may not work in order to find out if they do work.

It's interesting because there are a couple more popping up like say the AMP Foundation's program and ING they're doing those individuals with great ideas. That's essentially what they're funding. May tends to be a good open month actually for anyone looking at funding in this sort of space. But you know, the chance to get an individual idea funded and up off the ground, but that is so limited compared to grants that are out there for ongoing programs or so called innovative concepts within the sector that need evidence behind them to support. So it's kind of contradictory in a way.

Yeah, look, I understand, you know, it depends on what you think the role of different foundations should be. You know, it's, I guess it's not that everyone has to have a completed portfolio, but we just need to kind of fill a few gaps in taking that lead position. It's why I'm a bit hopeful actually. I think part of it is where the wealth has come from, you know, so a lot of how was the wealth generated that has now been invested in some way. And so, you know, one of the characteristics of angel investors is many of them made their money through entrepreneurship, which is a high risk activity. So they've already kind of experienced the upside of that, you know, high risk activity and I think have an appreciation for, you know, for the risks involved, but also what's, what's possible.

Generational wealth.

Generational wealth, exactly. Which is, and in Australia particularly, so much of our wealth is property and mining and not the like entrepreneurial, experimental part of mining. People going out there prospecting and so on. Our big mining companies are just, are just operators. You know, they buy leases once they're proven and they're highly operationally efficient in terms of scaling up extractive activities and selling them on world markets. But in both cases those are relatively low risk activities. The property sector just makes money forever. In Australia it seems like it's kind of like very low risk, but also just the individual building. You know, like you can't say to property developer, you know, let's put up 10 buildings and nine of them might fall down. But as long as we get one really sweet building that stays up, we're good, right? People like, what are you talking about? We definitely need 100% of those buildings to be, to be perfect. So I think it's hard for people who've kind of made their money in those sorts of fundamentally more conservative pursuits to then maybe get comfortable with the idea that they might have a 90% failure rate on early investments, but that the 10% could in fact be worth more than getting 100% kind of modest results, that one or two breakthroughs can in fact kind of be worth more. But the other challenge is, I guess it's hard to measure. So this is why I'm full of, you know, full of empathy for everyone who's dealing with this challenge. Because I actually think in so many ways, business is so much easier than social impact. You know, people always. Yeah, people often say, you know, think that in the social enterprise, the business is the kind of hard. No, no, the business is really simple on some level. You know, it's not that it's easy to succeed, it's hard work and it's challenging, but it's conceptually really easy. Money in, money out. Is there a gap between the two? And so when it comes to early stage investing, it means, like, every company, no matter what industry, comes back to a couple of same shared metrics. So if you're an angel investor and you make 100 investments and 90 of them fail and nine of them break even, but one of them is Facebook or Airbnb or Dropbox and provides 100x return, you're ahead. You've paid for the entire portfolio through that one giant success. But it's much harder to cross reference in that way with impact. You know, that if you give 100 small grants and 90 of them just don't work out, you know, didn't happen as nine of them are okay, but one of them is, oh, my goodness, we're going to scale this. This is really going to change everything. Have you paid for the portfolio? I think you probably have, but it's really hard to, you know, but it's. But we don't have that core shared, simple set of metrics that money provides to cross reference in a way. So you have to, you know, you have to have a certain confidence and a certain courage with that. And so one of the things we've learned is that actually lots, lots more people want to do a better job. I think when we first Launched. You know, we set up startsomegood.com, the crowdfunding platform, because we thought, we realized that crowdfunding was a way of building risk tolerant capital by reducing the individual risk, by allowing everyone to contribute what they're personally able to and comfortable with. You know, you might put in 50 and I might put in 100 and you know, someone else might put in a thousand. So on it. And in aggregate, if enough of us are willing to put in something, it'll reach its goals and be able to do what it wants to do. But for me, the individual risk of putting a hundred dollars in is something that I can survive, you know, if it fails. And oh well, it was worth a shot. It hasn't, you know, so it's obviously easier to be much riskier with a hundred dollars than a thousand dollars, ten thousand, one hundred thousand million, etc. And so we really thought this is a great way of building, of finding that, restoring capital, we kind of reduce the risk, require that the risk is more shared, essentially build the evidence base and then can move on to pitching those existing sources of capital.

There's a sense of community behind ideas too. I think the donation, the community element of what you're able to bring at Start some good is worth so much.

It'S worth more actually.

Yeah, People then purchase a product or then go on to give bigger donations. You know, I've seen that happen with businesses that have, you know, especially socially driven businesses that I know have fundraised on Start some good like that core bunch of supporters is worth so much.

To them because they stick with you. You know, the money you raise, you spend. People says to me all the time, you know, like that's the idea. You need it because you need to spend it on something. So six months after the campaign, the money has normally gone, it's been spent on whatever the thing was and hopefully it's all working out according to plan. But it's spent now. But the social capital that was generated is still there with you. And as you said, ambassadors.

Yeah, you know, you've got your brand ambassadors all sorted from the beginning. Like they take it and they sell it for you and spread the word.

Your recruiters, your volunteers, your future staff members. Exactly right, all of that. And so we actually often pitch crowdfunding. I don't think is, is really best thought of as an alternative source of capital. Obviously in aggregate it is generating millions of dollars, but as a kind of proportion of total capital towards businesses, or total capital towards charities, or total capital towards social Good ideas. It's a tiny fraction compared to all the government funding, all the philanthropy or the formal grants, all the other forms of donation through traditional galas and appeals and workplace giving, etc. We're talking tiny fragments. So it's not really, you know, at scale, an alternative to any of those other sources of capital directly. What it is, though, is an alternative, a new way of getting sufficient validation to then access those capital, those other sources of capital. So crowdfunding can serve the role of those initial small grants from the foundation for Young Australians did for us, proving that we could handle a little bit of money, that we could follow through on our plans, that we could create some outcomes, measure them, share those stories, and then ask for more money. And so that's really the role of calculating, is, as you said, generate, I think, two key outcomes that are even more important than money. Now, the only way you get those outcomes is by succeeding at the money part. Of course, if you fall short of your goals, that doesn't tend to produce the level of validation or resources you need to move forward. So the money is kind of what everyone focuses on, naturally enough, but the real value we think is in, as you said, the social capital that gets created, that community that is on that wants to be part of what you're creating, wants to sharer, wants to invest in it, and often then sticks with you for years if you do a good job of, you know, cultivating their involvement and keeping and being transparent with them. And then the credibility, the validation that comes from. You might not be able to prove that your idea works. But being able to prove that there's a community that wants your idea to work can be worth an enormous amount in the early stages. And so one of the things that we've done quite a lot over the last few years that I never could have imagined up front actually, is work with foundations and corporates who are grant givers to help kind of marry the best of crowdfunding with the best of traditional grant giving. So where we started, kind of, you know, I guess a bit cynical. I used to have a slide I used to talk a lot about, like, screw the gatekeepers. Crowdfunding is a chance to go around the gatekeepers. You know, you don't need them just like, just like, you know, music artists don't need record labels anymore. They can build, you know, they can raise money, release records, sell directly to their fans, and then if they want a record label, great. But they're able to negotiate from position of greater power and credibility than in the past. Same thing with social entrepreneurs and grant funding. You don't need it anymore. You've got ways to go around it. If you do decide you need it, you can negotiate from a position of greater strength, which is certainly all still true. But I guess we've realized that it's not that so many of these foundations kind of don't want to do a better job. It's that they exist. It's tough. They have a lot of. They often have relatively conservative people providing the funds. Sometimes the frontline staff are awesome and very progressive. But then it has to go through the grant committee, which is a bunch of senior executives from insurance companies who do nothing but worry about downside risk. And so we've learned that, you know, it's not about, you know, we've, I guess, moved from kind of just being a little bit cynical and saying don't worry about them to actually, a lot of our work is now with them, helping build, you know, approaches that hopefully can meet in the middle. How can we use. So one of the things we do. You mentioned ing. We've run their dream starter program for the last seven years.

I was just thinking of that.

Yeah, exactly. This is our first one, actually. I don't know that I'm not clever enough to probably ever thought of this. I don't think I ever would have approached people like ING and been like, hey, we should work together. But they approached us. They're at agency, actually, like seven years ago, eight years ago now, had an idea, had a kind of the germ of an idea about could we somehow connect our giving to crowdfunding and therefore have it spread further, inspire our customers more, et cetera. And so we call that kind of model crowd match, whereby an institutional partner, a traditional grant giver, puts up some amount of money and the community matches that. And so we do this. Match funding is a common thing, but we do it the opposite way round. Normally with match funding, the institution is saying that they want to go second, essentially that, you know, if you get out there and raise $10,000, and we'll give you another $10,000. The way we do it is through.

Cash or in kind support. You know, often there's a huge cash component that an applicant needs to contribute for that.

So we just spin that around and say, well, if you're ready to make a commitment, make the upfront commitment, but then challenge the inspired community to match you. So you're playing the proactive catalytic role, but making it easier for everyone else to come forward, but while also making it conditional. So the end result is the same. You know, we use a model for crowdfunding that we call the tipping point, but it's a variation of the all or nothing model. So when you set a goal, you have to reach that tipping point goal to receive the funds. So the way dreamstudder works is ING goes first, but it's like any early contribution to an all or nothing crowdfunding. You know, if you launch a campaign on our site today and I'm your first donor, it's conditional. You'll only receive that pledge if you reach your goal, because that provides me with the greater guarantee, which is really important for doing innovative work or acquiring new donors. But I want a certain. I'm happy to support, I'm happy to give you my money, but I want to make sure you can actually do what you're saying you're going to do. If you take my money, you have to be able to follow through. And obviously you can't do that if you only have 1% of budget right now. So you've got to get to that, that preset line where you say, you know, I'm taking everyone's money because I've reached my goal, because I've reached my goal and I can now do what I promised you I'd do. And so let's say Your goal is 20,000 and you're part of Dreamstarter. ING will put their 10 in first. So instead of you having to set up a campaign for, let's say, 10,000 and explain to everyone, if I get to 10,000, it's actually worth 20,000 because IG will match it. It's all kind of just there, baked into the model. It's a $20,000 campaign, but you have 10,000 already, which is actually more accurate. That's actually the situation you're in. But you. But you only get it if you reach 20. That does a couple of things. It means obviously that for ING or found that we've done this with vanishing Australians, Ian Potter Foundation, English Family foundation and others, it means the money goes twice as far because they put up the first half and the community matches it. And actually on average overmatches on average about 1.6 times. So we can kind of come close to tripling consistently the initial funds. You know, if you have $100,000 that you want to invest in important social issue X, how cool would it be if we could turn that into $270,000 for important social issue X? But once again, it's not just the money, like you were saying before, it also represents more than just money, it represents a community who want to see this happen. So it validates the idea. Whereas at the end of, you know, normally if I was just to give you a grant in the normal way, then we need to wait and find out if you can actually get engagement. You're going to spend a lot of that money on actually trying to engage the community, trying to make sure that they're on board. Whereas doing it this way ensures that by the end of the campaign you don't just have money, you actually have that validation already. You've proven that there's a community who want to see this work happen and that are willing to co invest alongside you to see it happen. And so it de risks that institutional investment as well. Only having to put up half the money is much less risky than putting up all of it and putting up half of it and seeing and having the guarantee that there's a whole community who actually want, if it's a social enterprise who actually want the product they're selling, pretty important. Or if it's a community project who actually want to be part of it, also pretty important. Normally you need that to succeed. Even if you have money, you need engagement, participation, backing from the local community. And foundations want to know that their money is going towards things that the local community want. And sometimes just reading a great grant application from one local resident or citizen doesn't actually give you that guarantee. But actually seeing that co investment come in does. So it makes the money go further and reduces the risk for those grant givers. And that's, you know, we've found that to be a really powerful model for trying to help or work with more foundations, corporates, local governments as well, to help them be a bit more innovative, you know, a bit more risk tolerant when it comes to supporting new and emerging ideas. Because we've essentially got this real world test that we, that we run them through. We say, okay, you've been, you know, the City of Parramatta ing Ian Potter foundation, whoever it is, wants to fund you. They believe in what you're doing. Now get out there and prove them right by raising the other half of the money from the community.

Earlier, Tom, you mentioned about, you know, the scarcity mindset and whether that influences sort of the safety concept around giving out money and the proven, you know, we need to prove if something will be successful and have all your measurables in there. And you know, there's so much that they track and monitor. Funders who are giving out big grants do you think that scarcity mindset and then compared to say this generation now where we're growing up with crowdfunding tech, you know, all of this, we're seeing that it's definitely a different world that we're growing up in compared to what some of these foundation managers and trustees grew up in. Do you think that will shift in the future? Like, do you think there's going to be more innovation, like truly innovation, grassroots early days, early venture funding coming out in the next say 10 years?

Definitely. I think we're already seeing that kind of ten years into crowdfunding as we currently crowdfunding has been around forever, really.

Aggregate aggregating shift from the scarcity mindset. Do you think it's going to shift based on the generation that we're in and we're just in a time of such huge change, whether we're going to be more open and you know, those of us now in these positions, whatever we're in, where the future managers and holders of these trusts, you know, like, how is that going to look in the future?

It's a really interesting question and yeah, I hope so. I mean I do think it's, you know, the big part of my theory of change when I was running vibewire was that if you just kind of changed the culture that you know, of how people thought about stuff, that institutions would automatically, you know, that our democracy, our parliament would automatically change as a result of people with a different mindset coming into the system. I still think that's true, but I do, I'm maybe less convinced by that you've changed than I once was because I think I'm more familiar or more sophisticated. Perhaps not trying to talk so too much, but you know, just in seeing the institutions often overwhelm the best of intentions when things are the way they are. So I'm not sure that individual progressively minded, you know, grant managers in foundations will shift it sufficiently on their own as that's why I think a lot about like who are the actual, who's actually providing the wealth. That's why one of the things I think will shift is that as more of our, you know, the richest people in Australia now are maybe not quite, but you know, the founders of Atlassian, soon to be the co founders of Canva. And these are people who've built wealth through entrepreneurial activity as opposed to your Gina Reinhart's, your inherited wealth, your property development and so on. And so I actually think that I think you need both for sure. But that's where I think A cultural shift in how money is made in Australia has really lagged. If you look at kind of what are the top 50 companies in America dominated by tech. But you look at top 50 companies in Australia that dominated by old industries actually been really slow. It's nice to see a couple of, you know, kind of tech giants and founders of innovative companies now creeping up the richness. Not that I think that private wealth is necessarily the best measure of this stuff, but. But you know what I mean. So I think that could have a profound.

True.

Yeah, exactly.

Like private wealth, it flows through to the social sector. No matter how it's done, it. It always. They always give in one way or another. That's just what people tend to do. So it will be interesting to see how this does shift.

Yeah, yeah, that's right. But I think we're already in terms of like, is more innovation coming out. I think we're already seeing that it very much is because things like crowdfunding have. Have absolutely created an alternative pathway where. And. And what's great about that is we can see. So, you know, I mean, obviously there's always been lots of people with ideas out there and a lot of them probably wrote grant applications, but no one else got to see it. You know, they. They poured their heart out into a grant application form and then it got sent to, you know, Community Foundation X and a handful of people read that and decided it wasn't for them, and that person got discouraged or maybe they wrote a few more. But, you know, a world of gatekeepers is in fact an incredibly inefficient world. I think you can actually, I think it's interesting to see this even in the creative industries. You know, it's one of those famous stories. The Beatles got knocked back however many times by 80 record labels or something. Yeah, that's what. And why did they get knocked back? Because they were innovative, because they didn't sound like exactly what came before. And so people listened to it and thought, that's never going to catch on. It just sounds too different. We always use that as a story of, like, how incredibly resilient and the, you know, the Beatles themselves were, you know, don't give in, keep pitching. But, you know, at some point, it's not unreasonable to be knocked back 80 times and decide that maybe the world doesn't want what you're offering. And I always think about, how many Beetles did we miss out on? How many completely revolutionary bands making incredible music just got dispirited by the 50th rejection and never released their music. And we as a world, as a society, missed out on that incredible art. And I think that's what's happening right now when it comes to social innovation. And it's what the grant system is not very good at. It's not just that they don't fund innovative enough stuff. It's that when people do share their ideas, they disappear into a black box and aren't shared. And it's easy to get dispirited after getting knocked back some number of times. And so you can't trust. Gatekeepers are terrible at predicting the future. Record label executives were terrible at predicting what music would actually be. They were good at predicting what would be a modest hit, what will sound like the things that came before and probably do similarly to what came before, but terrible at predicting what would actually be groundbreaking, what would actually revolutionize music, what would actually change the culture. And so that's where we're at right now. And it's inevitability. There's no way around that. That's just a world where you rely on a small number of people to decide what's worth trying, is a world that's going to be wasting a lot of potential. And so I hope that instead, this kind of crowdfunded world is a world where more of us get to find, you know, an idea that may sound idiosyncratic to you or me or to most people working in a grant office, but if there's 200 people who think it sounds amazing and it will put some resources in, they can prove us all wrong. They can give it a go and actually, oh, my goodness, it does work. There you go. I was wrong.

Yep.

And, you know, we're wrong all the time. But we've got to take that more scientific approach, I think, to figuring out what does, you know, having more of that mindset of, could it work? Is it worth finding out if it can work? Yeah, let's give that a go. And that's, of course, you know, it's how we do science. But the way that we do funding is like proof. You know, it's like if we only invest in. If we only paid scientists for experiments where they could promise us what the outcomes were going to be, we wouldn't learn very much.

I mean, maybe this is a new question that grant funders can ask is, do you think you're the next Beatles?

Well, everyone should think they're the next Beatles. You shouldn't be applying. You don't think.

Or they. Yeah, but, you know, like. Or maybe the Funders can sit there and go, are these the next Beatles? Let's take a chance. The philanthropy. On a different note, the Philanthropy Australia conference is on this week. So their question for the week is, what does the future need from us now? So they're wanting to look at new ways of doing things, address some of these uncomfortable topics. What do you think the future needs from philanthropy, Tom?

I think it needs courage and commitment. And so I think you need the courage to try things that may not work. And that's also based on commitment to finding the answer and to find and to getting to an outcome, even if it's uncomfortable and has stops and starts along the way. And so I think you do see that in certain sections. I think cancer is always one of the great examples of the cancer philanthropy is not based on, violates a lot of the rules that we would say is what works in philanthropy in general.

That's a good example.

You know, we teach people at crowdfunding, so you've got to be really specific. You got to make really clear kind of commitments around what the outcomes are going to be. You've got to try and quantify the outcome of these fundamentals that, you know, that if we, if we fund this, you know, you're raising $30,000, that's going to help X people do Y in y way, you know, really, really tease that out. It helps if it's a more immediate outcome. You know, people don't like stuff that's, you know, in the distant future, what's, what's going to happen outside of cancer violates all of that. It's a black box. None of us actually know how the money spent specifically, how many, you know, none of us goes. How many experiments are you going to run with this specific money or, and after those experiments, how much closer will we be to defeating cancer? Where are we even right now? Hard to say. But enough people have that emotional, personal commitment that we, and as a society, we have kind of adopted this. It's just one of our grand challenges. We are just going to beat cancer eventually, and we're just going to keep funding it until we do. So imagine if we also funded homelessness like that, or if we funded climate change like that, you know, So I think there's a certain, like a little bit more picking a target and saying we are just going to solve it. And then if you were, if you are committed to solving it, you have to also be committed to that. Trying lots of new stuff and accepting that many of us have just like, I imagine a Lot of cancer research money is in the vertical wasted because it. It goes down threads that ultimately don't end up defeating cancer. But of course that's not actually wasted is what's important to understand. They get it in that area because that's. That's kind of framed around science and research. And so there's nothing's ever really wasted. Ruling out a possibility is a. Is forward progress, but we don't kind of take the same approach. I think in so many of our other areas. Everything needs to be, you know, everything needs to be justified up front, like defined exactly how it's going to work, etc. And so it's fine for some foundations to be, you know, to be clear, it's fine for some to set themselves up to overtly go, you know, we're going to play that BC type role. I just hope we just need a few more out there who are willing to step into the slightly more angel type role. But it's also about getting smart around how to leverage things like crowdfunding. I don't think these things need to be either or as per our crowd match model. But it's not just. It shouldn't just be, you know, formal grant funding or crowdfunding. I think often the most interesting opportunity is when you go and instead of or yeah, what does it look like to bring grant funding and crowdfunding together? It looks a little bit like the Ing Dreamstatter program, which has been incredibly impactful and successful over the last seven years. We'd love to do more of that. So, hey, if you run a foundation, call me. Let's work together.

Yeah, I think that's a great way to end what Tom's just said. You know, philanthropists around the straight around, around Australia this week are looking at what does the future need from us now? And, you know, from Tom's experience, it's courage and commitment. So not. Not will it work, but could it work? And I also want to throw in that question that he said, you know, are these people the next Beatles? We don't want to miss the chance to invest in that. Um, and it's an and not an or so working with people, not either or so. I think they're really great points that you've raised, Tom. Great conversation. Um, and I think it would be great if we could keep all of this conversation going through the podcast, but also through, you know, this conference that's on this week and just blogging LinkedIn articles. Let's keep this conversation going and work out how more foundations like ING could work with StartSomeGood. There's a lot of examples and a lot of ideas of what we can do, but let's start implementing some of that and creating some fantastic change to fund more innovation across Australia. So, Tom, thanks for your time today. It's been really insightful. Yeah, thanks for spending the time with us here.

Thank you so much. Jesse. It's been a really good time. Thanks so much for having me.

Thanks for joining me on Grants Uncovered. If you'd like show notes, head over to grantsuncovered.com see you next time.