Where solidarity is investment

Financing Social Impact Funding social innovation in Europe – mapping the way forward

Topic: Social impact, social innovation, EU, financing

Executive Summary

The field of innovation for social purposes is developing rapidly all over the world, with new institutions and methods, growing confidence and evidence of impact. Social innovators are changing the way governments work, the way civil society achieves impact, and the actions of business.
Social innovations are new ideas, institutions, or ways of working that meet social needs more effectively than existing approaches. Often, social innovation involves the remaking and reuse of existing ideas: the new application of an old idea or the transfer of an idea from one part of the Union to another. The European Commission should aim to showcase and support new approaches, with the aim of adoption by national, regional and local government. It should also be demonstrating new markets with the aim of encouraging adoption by the private sector. Some of the most important growth sectors are likely to include health (already between 5% and 13% of GDP in EU countries and set to rise by 4% by 20502), education, eldercare, childcare and environmental services (estimates for Europe suggest that 1m jobs could be created from a 20% cut in present energy consumption3). And leading businesses are responding to the growing importance of social economy.
Across the world millions of people are creating better ways to tackle some of the most challenging social problems of our times: climate change, chronic disease, social exclusion, and material poverty. Often their ideas come to life through collaborations that cut across the public and private sectors, civil society, and the household. Frequently they make use of new technologies including broadband and mobile communication. Some of their successes are now part of everyday life, from microcredit in rural communities to web platforms linking teachers and learners, as well as banking services using mobile phones, community land trusts, restorative justice programmes, and more.
The field of social innovation is now beginning to gather momentum, with significant investment from governments, foundations and business. Over the next few years, it is possible that the ability to support, manage and grow innovations of this kind will become a core competence within governments, businesses, NGOs and foundations.
The field combines commitment, experience and energy. But it lacks the systematic and sophisticated infrastructures of support available to other fields – in particular access to appropriate finance and funding. The result is that although there is no shortage of good ideas, far too few achieve the impact they could. The report sets out a vision for where we want to be ten years from now. It highlights how these various infrastructural gaps will need to be overcome in order for the field to develop to maturity and puts forward recommendations for how we can achieve this.

Overview of the report

Section 1,2 and 3 describe what is meant by social innovation, as well as the actors involved in this emerging field. This chapter explains why the field of social innovation is at critical point, with numerous opportunities and drivers converging to make this moment a ripe time for the development of the field. However this development is currently hampered by a lack of financial and institutional supports.
Section 4 and 5 provide an account of what is already happening in this space and sets out a vision for a mature ecology of finance in this field.
Section 6, 7, 8 and 9 set out specific recommendations for funding and financing that will accelerate progress of the field. We explore how the European Union can unlock financial supports as well as recommendations for how private investment can be mobilised as well as the role that can be played by European foundations.