The European Commission should establish a family of funds for social innovation organised around the innovation lifecycle (See Section 2), progressing from small grants for early-stage ideas through to loans, guarantees, equity and, finally, direct commissioning and tendering for innovations at scale8. A separate EU Catalyst Fund would support capacity-building for engagement with the field. A single portal, or one-stop shop website, would signpost applicants to the most relevant stage and providers.
Finance presentation gdynia
Report 1Strengthening Social Innovationin Europe: Funding and Financing Social Innovation Europe
Who is funding social innovationalready – public funds?Social Innovation Funds:• Estonian Development Fund, Social Enterprise Investment Fund, UKInnovation 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
Who is funding social innovationalready – private funds?Social banks:• Banco Prossima (IT), Credit Cooperatif (FR), Triodos (NL),Commercial investment funds (financial return, then socialimpact):• 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
Problem AnalysisSocial innovators have commitment, experience andenergy.But: little access to appropriate funding.Result: no shortage of good ideas, but far too fewachieve the impact they could. Social Innovation Europe
Guiding Principles for Financing SocialInnovation (1)1. To mitigate risk funding should be organised in stages so thatany failures in the early stages are small.2. Funding should be adapted to different stages of socialinnovation (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 theeffectiveness of services and/or make them more efficient. Social Innovation Europe
Guiding Principles for Financing SocialInnovation (2)6. Finance for social innovation should be accompanied by othercomplementary actions.7. Investments should encourage new partnerships that cut across existingprofessional, sectorial, departmental or cultural boundaries.8. Knowledge gained from investing in social innovations should be openlyshared among practitioners across Europe.9. Models for investing in social innovation should to the specific economic andcultural contexts of the Member States.10. Wide access to funds should be assured through open competition, clearguidance, simple application processes and transparent selection methods. Social Innovation Europe
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.
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
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
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
How else can the European Commission promoteSocial 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
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