The research team at Social Innovation Europe considers strategies for funding social innovations at different stages of their development.

1. Report 1
Strengthening Social Innovation
in Europe: Funding and Financing
Social Innovation Europe

2. Who is funding social innovation
already – public funds?
Social Innovation Funds:
• Estonian Development Fund, Social Enterprise Investment
Fund, UK
Innovation Agencies:
• TEKES and SITRA (Finland), VINNOVA (Sweden)
European Funds:
• European Social Funds
• EIB-ESF Progress Microfinance facility
• Other Structural Funds: ERDF
• Research Framework Programmes and CIP
Social Innovation Europe

3. Who is funding social innovation
already – private funds?
Social banks:
• Banco Prossima (IT), Credit Cooperatif (FR), Triodos (NL),
Commercial investment funds (financial return, then social
impact):
• PhiTrust (FR), BonVenture (DE),
Social investment funds (social impact most important):
• CAF Venturesome (UK), Fondazione CRT (IT)
Venture philanthropy funds (grants and advice):
• Impetus Trust (UK), d.o.b. (NL)
Social Innovation Europe

4. Problem Analysis
Social innovators have commitment, experience and
energy.
But: little access to appropriate funding.
Result: no shortage of good ideas, but far too few
achieve the impact they could.
Social Innovation Europe

5. Guiding Principles for Financing Social
Innovation (1)
1. To mitigate risk funding should be organised in stages so that
any failures in the early stages are small.
2. Funding should be adapted to different stages of social
innovation (e.g. v grants, loans, equity)
3. Disruptive social innovations should be encouraged.
4. Investment in the early stages of social innovation should be up-
front (rather than in arrears)
5. Investments in social innovations should aim to improve the
effectiveness of services and/or make them more efficient.
Social Innovation Europe

6. Guiding Principles for Financing Social
Innovation (2)
6. Finance for social innovation should be accompanied by other
complementary actions.
7. Investments should encourage new partnerships that cut across existing
professional, sectorial, departmental or cultural boundaries.
8. Knowledge gained from investing in social innovations should be openly
shared among practitioners across Europe.
9. Models for investing in social innovation should to the specific economic and
cultural contexts of the Member States.
10. Wide access to funds should be assured through open competition, clear
guidance, simple application processes and transparent selection methods.
Social Innovation Europe

7. What investments are needed?
• Investment in ideas through 'incubators‘ - A number of incubators
for social innovation can be set up for social experimentation in for
example e.g. ageing, climate change, youth unemployment.
• Investment in prototypes and pilots - Taking innovation to the next
stage beyond ideas involves testing ideas in practice.
• Scaling – new investment funds, potentially joint with foundations
and banks The next stage of support should be focused on adoption
of successful social innovations by national, regional and local
government.
• Open up to new types of cooperation - Attention should be given to
new models for partnerships, between public-private or public public-
private, including different Social Innovation Europe
sectors and operating at different levels.

8. What would help? (1)
A dedicated European Social Innovation Fund
• Under the direct management of the European Commission
(possibly led by DGs Employment and Social Affairs, and Regional
Policy) between €150 -€300 million.
• Enable member states to build capacity, better engage with social
innovation.
• One fund with three parts
1. Building Capacity for social innovation exchange, good
practice, capitalisation
2. Setting up units (mostly at arms length but some perhaps
inside government)
3. Pilot actions or demonstrators of the different types of
finance (four levels)
Social Innovation Europe

9. What could help? (2)
A Social Innovation Family of Funds
• Investment in ideas: < Micro grants and loans
from € 5,000 to € 25,000
• Investment in prototypes: Grants of up to
€300,000 over 2 years
• Implementation fund: < € 30 million
• Scaling – jointly with public sector, banks and
foundations < € 100 million
Social Innovation Europe

10. What would help? (3)
European Social Impact Facility
• The ESIF will have an initial target size of €80m
• Investment period of (4) years (with possible extensions)
• EIF/EIB Group as cornerstone investor for up to 50% of
total commitments
• Other eligible investors will include entities that have
indicated a strong interest in committing to this type of
product: Public investors such the European Commission
and agencies of the EU Member States.
Social Innovation Europe

11. How else can the European Commission promote
Social Innovation?
Further recommendations
• Social Innovation Challenges – establish challenge.eu website
• Supporting Social Innovation through Procurement
• Supporting Social Innovation through Social Experimentation
• Payment by Results
Social Innovation Europe

12. Questions to you:
• What else can be done on a European level?
• How might private investors be empowered to
drive positive change?
• Where do we want to be in 10 years time?
What do we want the finance infrastructure
look like?
Social Innovation Europe