Three of Australia's largest financial institutions have teamed up to create a new social benefit fund that focuses on family issues.

The Family Preservation Society is the A$10 million ($9.6 million) SBB that is the product of a collaboration among Westpac Institutional Bank, Commonwealth Bank and The Benevolent Society. It includes A$7.5 million in capital guaranteed, which represents the amount the New South Government will save from the project; the remaining A$2.5 million is funded by the three organisations and other charitable groups and philanthropists

The purpose of an SBB is to fill funding gaps where the government and philanthropic organisations may fall short, with the goal to reduce the number of family breakdowns and children placed in foster care in New South Wales. The Family Preservation Society will be open to investors from early July until August 2013, depending on subscription levels.

"This type of financing encourages discipline of reporting of social outcomes, which means greater transparency for taxpayers. It also creates an asset class which does not require a choice between being a philanthropist and being an investor," said Steve Hawkins, general manager of business development for The Benevolent Society.

Perpetual Corporate Trustees will act as the investment fund guardian and will provide pro bono services as trustee and security trustee.