The Insider/
Social investment: More than fairy floss and face painting
Social investment is often seen as an act of goodwill rather than a deliberate, strategic choice that enhances social licence and builds social capacity for the long-term. And while nothing mandates an organisation to do it (yet), the space between these choices is rapidly closing.
The shifting sands of policy
Two policy developments in WA explain why. The first is the PoweringWA Community Benefits Guideline for renewable energy projects currently being piloted across the Wheatbelt. While most projects will sit outside its formal scope, they certainly won’t sit outside its potential influence. Once an implied baseline like this is public, communities and local governments will likely use it as a reference point for other out-of-scope developments or projects. We examined the Guideline’s design in a previous edition of The Insider.
The second reason is that “voluntary” may be its designation for today, but the WA Government has already indicated it may expand the guideline in the future. Queensland, for example, has mandated that community benefits agreements (and social impact assessments) for renewable energy projects must be in place before a development application can even be lodged.
A separate dimension is the Federal Government’s Capacity Investment Scheme (CIS), which underwrites revenue for renewable and storage projects. Importantly, it assesses tender bids against criteria that explicitly include community engagement and benefits sharing. A project’s access to CIS support is inseparable from its social investment track record.
Together, these shifts move social investment from something an organisation does out of good practice to something increasingly linked to project funding and approvals.
Beyond the photo opportunity
Whether it is called social investment, community investment, or community benefits, all this activity centres on voluntary and purposeful contributions that generate positive outcomes for communities. The return on investment is not just a photo opportunity at a community event, it’s an organisation and community working together to achieve something that neither can do alone.
Having said that, opportunities to participate in community events are highly prized and hold intrinsic value in supporting social cohesion and a sense of community. Social investment also generates value in how it encourages collaboration and develops lasting relationships. It’s the difference between spending on a community and investing in one.
It’s also important to note that social investment cannot substitute conditions imposed through environmental or planning approvals. Nor can it replace commitments relating to local content, council rates, neighbour agreements, or discharge obligations under applicable legislation.
Three levels, one program
Not all social investments are equal in their strategic value, so it is worth describing them to understand why some programs earn genuine goodwill with communities and hold up better under scrutiny:
- Transactional contributions, like one-off donations to a charitable cause; involve no ongoing relationship and no formal acknowledgement or evidence of engagement.
- Transitional contributions, or structured sponsorships; generate goodwill, visibility, and branding in return for financial or in-kind support.
- Transformational contributions, like co-designed community funds or long-term partnerships; are built on mutual interest, shared decision-making, skills transfer, and clear measures of accountability.
It’s also worth being clear that social investment is not just financial. In-kind support, donated equipment and expertise, and structured volunteering can often be more valuable than an equivalent sum of cash. This is particularly true for smaller community groups who are constrained by capacity. Cash can address a temporary shortfall whereas time, skills, and equipment can build capacity and self-reliance. A program that only considers financial support is missing part of what social investment can achieve.
Why it matters
For organisations, the starting point must be a genuine commitment to the community rather than a risk mitigation or funding strategy. What that commitment earns is something that no approval can grant: social licence. Social investment can turn one-off interactions into an ongoing relationship; one where the community has a stake in the outcomes rather than being a recipient of funds. Over the life of a project, that relationship is what builds the pillars of social licence: trust, legitimacy, and credibility, and a track record of genuine values-based engagement.
For communities, the question is what the investment leaves behind. Partnerships that build community capacity, fund infrastructure, or support skills development can change a community’s circumstances. This is legacy-building and it’s the strongest argument for evolving a social investment program towards transformational contributions as it matures.
The difference
Getting this right early is the difference between a social investment program that reads as a strategy to build community capacity or develop relationships and one that reads as damage control or regulatory compliance. How your approach is perceived can prove to be either the basis of ongoing support or result in the withdrawal of your social licence to operate. Choose wisely.
ReGen Strategic works with clients on their approach to social investment. We consider where such a program should sit within existing obligations, the appropriate mix of contributions, and how to manage a program that will withstand scrutiny. If you are considering how to approach social investment or reviewing whether an existing program is doing what it should, we are happy to help.