Vanguard Laundry Services: Capital Partnership

Toowoomba Clubhouse is a community organisation dedicated to supporting its members, all of whom have a lived experience with mental health and face barriers to employment.

“It is estimated that the majority of unemployment in Toowoomba is experienced by people with severe mental health issues,” explains Toowoomba Clubhouse Executive Director, Luke Terry.

With serial social entrepreneur, Luke Terry, at the helm, new social enterprise ventures are created to respond to local demand for services, continually expanding the opportunities for Toowoomba Clubhouse members to receive training and employment.

One such new opportunity is the Vanguard Laundry Service (VLS), a commercial laundry social enterprise that will deliver 60 new career training opportunities, including 30 permanent jobs and 30 career development places for people living with mental health issues.

The idea for VLS came in 2014, after the local St Vincent’s Hospital identified their laundry services as an opportunity to procure from a social enterprise and approached Toowoomba Clubhouse.

Toowoomba Clubhouse then worked in partnership with Social Ventures Australia, spending 18 months modelling and mapping out the financial model for the commercial laundry project – verifying the financial model with industry experts, mapping out the start-up capital structure and raising a combination of philanthropic and loan funding to begin work on the project.

“We had completed two successful investments with SVA in the past and there was a natural relationship to explore ‘the next big thing’,” explains Toowoomba Clubhouse Executive Director Luke Terry.

55 separate partners helped to finance the project, with 28 cash partners contributing funds ranging from $1000 all the way to $1m, totalling just over $3m. A further $2m of financed capital was raised, 75% coming from the Westpac Foundation and the remainder from local community impact investors. 27 pro bono partners also offered $750K in support for a range of services and the local community also made contributions to the project.

“The support of Westpac and SVA in structuring the capital requirements was essential in making the project a success. Their involvement also built confidence with our other partners and supporters,” says Terry, “From local community donors to the architects, engineers, land donors and our federal member who had to walk into the Prime Minister’s office asking for money for a laundry - we would not be where we are without the local Toowoomba community.”

Adding to these financial contributions, the Federal Government provided a $1m boost to the VLS project as part of their $350 million Community Development Grants Programme for community projects. The Paul Ramsay Foundation also made their first investment into a social enterprise with a further $600,000 for VLS.

“We are so excited about the opportunity to be able to partner with Ramsay on one of their first social enterprise investments,” says Terry, “My understanding is that our investment was attractive due to having the contract and a significant amount of support already in play, In many ways the Ramsay piece was the last major piece of the puzzle needed to make the Vanguard project possible.”

A state of the art laundry facility is now under construction with the Vanguard Laundry Service due to be opened on December 16th, 2016.

“Given the public profile of the laundry, we will be investing in independent measurement and evaluation and case studies in order to create a precedent for future social enterprises. We hope to use the laundry as a case study to help grow the entire social enterprise sector.”

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