the Social Investment Package (SIP...71 2. Main programmes, action plans and supporting schemes...75 2. 1. European Structural and Investment funds (ESIF...
and the economic spheres. 7 The economic concepts of capital and investment have become social policy instruments
ethical investment products, including‘social and environmental impact financing';'yy the institutions are also changing:
P A r T I s o C i a L I N N O V A t I O N, A n E w P A t H 15 investment
From access to public procurement or small experimental grants to investments in large projects likely to bring substantial social benefits in the medium to long term (e g. investment in the social integration of prisoners to eventually reduce crime.
this can even include regrouping investments to achieve the same social objective and involving stakeholders
or treble the impact of budgets and or investments. 29 cf. for example SOS (http://www. groupe-sos. org).
and supporting the development of a conducive ecosystem where it exists as well as the current state and dynamics of social investments markets.
whether marks and labelling schemes are in use, the social investment markets. Finally, it assesses the opportunities and barriers for each country.
Together with the Regulation on European venture capital funds (Euveca) and the Alternative Investment Fund Managers Directive (AIFMD), this Regulation aims to make it easier for AIFMD-exempt venture capitalists
The range of eligible financing tools/investments under the Eusef Regulation is wider than those available for venture capital funds under the EVCF Regulation. 58 The third axis of this programme focuses on microfinance
investments and guarantees to social enterprises which can demonstrate that they have a‘measurable social impact'.
and the Rockefeller Foundation on one of the first significant (despite the small sample) pieces of research on investments intended to create a positive impact beyond financial returns.
Mapping of public policies and social investment markets to provide an overview of national policies,
and, the current state and dynamics of social investment markets in Europe; and Task 5:
public policy and investment conditions for the development of social enterprises. 72 http://ec. europa. eu/internal market/social business/docs/expert-group/20131128-sbi-sector-mapping
There are increasing numbers of financial institutions that specialise in investing in social enterprises and many of the new ethical banks specialise in this type of investment.
the European Investment Bank (EIB) and European Investment Fund (it is financed out of the ERDF);
yy The EU PROGRESS Microfinance facility a fund managed by the European Investment Fund with a total fund of EUR 160 million.
A social investment fund is being launched, which is necessary and the main current concern for the BIS.
but is unattractive for those who seek a quick return on investment. Via support from the Social Economy network in The netherlands, Belgium and Germany,
Their unique strength is that they will address weaknesses in the European research and innovation system (notably, under-investment,
Innovation will continue to depend on R&d investment, which should continue to increase in advanced economies
How will social enterprise respond to economic conditions, social and environmental challenges, government policies, technology and investment over the next years?
From grants to investment: one of the most important drivers will be the development of the social finance sector.
Hybrid models of social investment (Social Investment Bonds, Social Impact Bonds) will emphasise new tools(‘investment readiness,
pressure on investors to consider social impact in investments and growing involvement of social enterprises on financial services delivery.
new national and EU funding priorities could exclude innovative social investments; innovative social enterprises will have to make an international impact thanks to social franchising.
will be an interesting alternative to traditional political investment. Indeed, effective social enterprises will be considered as models
The Social Business Initiative and The Employment and Social Investment packages, which frame and fund a new approach to social policies.
whereas the Social Investment Package (SIP) brings fresh impetus to social policy. 1. 1. Europe 2020 flagship initiatives96 The Europe 2020 Strategy has identified new drivers to boost growth and jobs in seven
the Social Investment Package112 and a distinctive initiative carried out yearly: the Poverty Convention. 1. 2. Consolidating the Single Market:
the Social Investment Package (SIP) The adoption by the Commission, in February 2013, of a new approach to social policy, formalised in the SIP, marks another turning point for the recognition of the value and support for social innovation
The SIP provides a strategic social and health investment approach to the modernisation of these policies.
focusing on simple, targeted and conditional social investment and a systematic approach to the role of social protection throughout the different stages of life.
and Investment funds (in particular the ESF) can make to social investment in the next financing period. 127 126 4 491 signatories from regions,
to design social policies around strategic social investment; to address gender challenges in a more coherent manner,
a social investment approach will be monitored during the semester and this would include how the Member State has benefited from social innovation in this regard.
The SIP Communication urges Member States to pursue active and enabling policies oriented towards social investment
and develop innovative ways of securing additional private financing for social investment. P A r T I I M A i N d E V E L O P m E N t S i N e U P O L
How to better confront bottlenecks on social innovation in implementing the SIP (consolidation of partnerships, improving sustainability of financing, mainstreaming ICT's potential, improved evaluation of social policy reforms supporting investment.
in order to reduce differences in investment in social policies. The findings of this conference provided an input for the meeting of the Employment, Social policy, Health and Consumer Affairs Council (EPSCO)
which adopted a specific set of conclusions on the SIP‘Towards social investment for growth and cohesion'.
and makes the case for social innovation through investment under the Structural Funds. Furthermore, the Ad hoc Group on Trans-nationality and Social Innovation offers a forum for discussion between the ESF managing authorities and the Commission.
and develop innovative ways of securing additional private financing for social investment, (iii) to facilitate the exchange of experiences
provisions concerning the Investment for growth and jobs goal and repealing Regulation (EC) No 1080/2006;
It is the EU's principle investment tool for delivering the Europe 2020 goals: creating growth and jobs, tackling climate change and energy dependence,
which the public authorities can organise support for social innovation in the programming of their investments.
which has accentuated the gap between the important long-term returns on human capital and social investments on the one hand and the necessity of keeping public budgets in balance on the other hand,
the new generation of ESF funds will support the implementation of the policy orientations set out in the Social Investment Package Communication,
the Social Investment Package (SIP) has encouraged Member States to use European funding, most notably the European Social Fund (ESF), more extensively,
and the Commission advocates allocating at least 25%of cohesion policy resources to the ESF to support human capital investment and social reform.
For instance, support for social issues can be programmed together with other investment priorities at the level of functional regions or at the urban level.
investments in physical assets (e g. investments in new technology to improve the farm's efficiency),
evaluation in final stages) and another five projects on social policy experimentation supporting social investment were funded under the 2013 call (budget of EUR 4. 2 million).
Europe 2020 challenges and the implementation of the Social Investment Strategy. 133 See Annex IV to the first BEPA report on social innovation.
achieving better outcomes for the investment made and in some cases generating cost offsets and even savings.
evaluation, and larger-scale implementation of new social policy initiatives, in line with the Social Investment Package (SIP;
explore the role of public-private partnerships in welfare reforms and investment in human capital;
social policy innovation is an essential element for structural reforms in the Member States, in line with the social investment approach.
Social services represent a smart and sustainable investment as they do not only assist people but also have a preventive,
Social services are fundamental for the social investment approach and for the social protection systems as they,
and the European Investment Bank (EIB) and operates as a guarantee instrument to microcredit organisations
yy explore the role of public-private partnerships in welfare reforms and investment in human capital;
The 2014 edition of OPEN DAYS will be held under the slogan Growing together Smart investment for people.
with opportunities to look into new instruments such as Integrated Territorial Investments and Community-led Local Development, financial instruments, etc.
The outcome was used in the implementation of the Social Investment Package. 143 For a fully representative list of social innovation events
innovation (Brussels 19-20 may 2014) On 20 february 2013, in the Social Investment Package, the European commission drew attention to the
and social investment in implementing structural reforms at the national level and delivering on the Europe 2020 Strategy objectives.
In line with the Social Investment Package, social policy innovation must be embedded in policymaking and connected to social priorities.
and estimated that the collective investment at EUR 5 billion over five years would be needed for the implementation of the recommendations, an investment
Citizens will identify barriers to growth, job creation and investment, and ultimately propose new policy or legislative approaches.
available to support the development of the social investment market and facilitate access to finance for social enterprises through quasi-bond instruments from 2014-20.
If they meet these criteria they can then market their Euveca to investors across the EU who are able to make an investment of at least EUR 100 000.3.2.3.
the European union Social Entrepreneurship Funds (Eusef) On 22 july 2013, a new European investment fund specifically designed to enable investment in social businesses became available.
The European Social Entrepreneurship Funds (Eusef) can be marketed to investors who are able to make a minimum investment of EUR 100 000 across the EU,
which will support the development of the social investment market, facilitate access to finance for social enterprises,
Three initiatives JASPER, JESSICA and JASMINE177 were developed in the 2007-13 programming period by the European commission, the European Investment Bank Group and other financial institutions.
The European microcredit facilities Initiative Meaning Initiator (s) Aim Budget JASPERS Joint Assistance in Supporting Projects in European Regions European commission, European Investment Bank
JESSICA Joint European Support for Sustainable Investment in City Areas European commission, European Investment Bank, and the Council of europe Development Bank Supports sustainable urban development and regeneration through financial engineering mechanisms.
JASMINE Joint Action to Support Micro-finance Institutions in Europe European commission, European Investment Bank Seeks to improve access to finance for small business. € 200 million The JASMINE
or investment risks related to financial-return crowdfunding, as well as the high cost of cross-border operation for crowdfunding platforms that host campaigns offering financial returns.
the European Investment Fund (EIF), with the collaboration of private sector investors, launched the Social Impact Accelerator (SIA), a pilot initiative
The SIA operates as a fund of funds managed by European Investment Bank with funding from the EIB, the Crédit Coopératif and Deutsche bank.
Beyond simple financial return targets, these social impact funds seek to trigger positive societal change as part of their investment activity.
yy to map public policies and social investment markets that impact on the start, development and growth of social enterprises;
The underpinning rationale is to boost innovation in the healthcare marketplace encouraging start-up development and SMES investments in R&d.
where participants increase the level of investment as they pass through the various stages. This is how NESTA's Big Green Challenge was organised.
A critical issue is to combine the investment decision and business support. Typical units for individual projects range from £2k-£250k,
and sequencing for example of investment in people, equipment and market growth. Business plans cannot design the future
and is similar to charitable status. CIC status enables social ventures to access equity investment
Some of the methods for effective supply include investment in evaluations and research data to demonstrate effectiveness
and requires more investment in professional skills. 5 84 THE OPEN BOOK OF SOCIAL INNOVATION Inspiration Some ideas spread because of their qualities as ideas they are inherently inspiring, arresting, and engaging.
or provide a means for providers of money to judge between alternatives. 208) Standard investment appraisal methods there are a wide range of tools in use in banking, venture capital and other fields of investment
and is used now as standard for assessing transport investment and large development projects. 210) Stated preference methods monetise social value by drawing on what people say they would pay for a service or outcome.
(which is meant to quantify a potential investment‘s social output), methods developed by the Center for High Impact Philanthropy (CHIP) and various other individual foundations,
and costs. 217) Social Return on Investment (first developed by REDF), has become increasingly popular within the nonprofit world.
One imaginative study of a regeneration scheme, for example, showed that modest investments in home safety
or a new set of investment devices. Systematic approaches to innovation are rare. But the UK health service may be becoming a good case study. It is a huge system by any standards with an annual turnover of £98 billion
It is involved already heavily in innovation through investment in research and development on pharmaceuticals and medical instruments and close links with top universities such as Imperial and UCL,
Where these succeed they create a political constituency for public investment in early years'education as well as effective models for delivery. 234) New models of the support economy.
and investment in community-based solutions focused on prevention. These are part of a‘family'of innovations in criminal justice that see the offender in their social context
and telecare technology (see also method 89). 256) Blocking technology and other investment choices that will impede changes to systems.
Stopping sunk investment, or reinvestment, in an old model can be the key to creating space for investment in new alternatives. 257) Frames for change.
Framing involves linking particular events such as natural disasters, crises of care or of the economy to underlying causes,
Reduced VAT rates have also been used in Europe to encourage environmental investment, as with home insulation in the UK, biofuels, renewable energy equipment and recycled paper in the Czech republic,
Image courtesy of Akuppa. 6 122 THE OPEN BOOK OF SOCIAL INNOVATION systemic ideas they need different methods to those used for investment in established systems.
or environment and transport. 274) The creation of new investment flows can do the same,
connections, knowledge, experience, and investment. Borrowing from the best of a member's club, an innovation agency, a serviced office and a think-tank,
and innovation agency to develop a model that seeks to create new ventures and back social entrepreneurs with a multidisciplinary team, a staged investment model,
and a business incubator, alongside a social innovation investment fund. Mars is a nonprofit innovation centre connecting science, technology,
inwards in the form of taxation and fees, outwards in the form of grants, procurement, and investment.
or windfall taxes from utilities for investment in emerging green technologies and other innovations. 348) Community pledgebanks are a development of the Pledgebank idea:
Public investment Financing public investment is complicated by the common difficulty in quantifying the effects of an investment,
This particularly applies to preventative investment. Private funding can be used where there are clear streams of revenue resulting from the investment,
with the public funding element covering the wider social impact elements of an investment and reducing risk. 359) Local bonds,
including Tax Increment Financing (TIF) and Business Improvement Districts (BIDS. These create flows of resources at the local and very local levels,
and can support new functions at arm's length from the local state. 360) Generating revenue from public investment on the US railroad model.
Prior to investment, property rights are vested in a Community Land Trust (CLT) or public body which then benefits from the increased rental value of sites after the public investment has been undertaken.
The Greater london Enterprise Board financed its operational expenditures for many years through the sale of industrial property it had bought during the recession of the early 1980s.1 158 THE OPEN BOOK OF SOCIAL INNOVATION 361) Social investment funds
such as the proposed Social Investment Bank to be funded from unclaimed bank accounts, which would act as a wholesaler for a range of financing needs (see method 475). 362) Social enterprise investment funds,
such as the Social Enterprise Investment Fund launched by the UK's Department of health with around £100 million,
and the London Climate Change Agency (LCCA) to develop sustainable energy programmes. 365) Joint project financing leveraging public money with voluntary contributions, sponsorship or community investment. 366) Layered
investments combining tranches with different rates of risk/return and different sources of capital (philanthropic, public, private) such as Blueorchard (Switzerland) or Big Issue Invest in the UK. 367
as with The swiss Re insurance of pollution claims from landfill. 369) Investment guarantees, with any claim on the guarantee being paid out with a one year delay.
This is to avoid the full value of the guarantee being counted in a public authority's current investment programme (Sheffield City council pioneered this delayed payment method in the 1980s.
370) Securitising future payment'streams to provide investment capital, as with the Prime Carbon scheme in Australia which contracts sequestered carbon from microbial treatment of agricultural soils to large companies on a five year basis,
allowing these payments to be 1 SUPPORT IN THE PUBLIC SECTOR 159 capitalised to fund farmers'investment.
or corporate energy efficiency measures. 371) Financial instruments for preventative investment including the UK's‘Invest to Save'budget, the USA's Justice Reinvestment programme,
and provide better incentives for public agencies to make preventive investments. They were endorsed in a government white paper in December 2009.373) Health Impact Contracts are a potential new financing device to connect the NHS in the UK with other agencies (primarily local government),
with investments by local authorities (for example in home based care for the elderly) tied to future payments by the NHS determined by
whether the investment leads to lower pressure on hospitals and acute services. 374) Bonus payments on spending aligned to social outcomes such as the UK Government's Performance Reward Grant for local area partnerships
. 375) Public investment aimed at social innovation growth strategies such as the proposed Social Investment Bank, the Toronto Atmospheric Fund,
and improving prospective post-tax rates of return. 377) Exemptions and assistance such as tax relief along the lines of the Enterprise Investment Scheme (EIS) for social enterprises,
These zones provided a range of tax incentives to attract foreign investment and paved the way for the sweeping reforms and the unprecedented economic growth of the past three decades.
credits, allowances and estate duties for personal public investment, such as those for higher education, elder care and environmental investment. 380) Charitable status extended to allow tax allowances on investment funds,
as with charitable investment in Community Interest Companies, or the L3c model in the US
which allows for programme-related investments from foundations. 381) R&d tax credits for the design and development of innovations.
R&d tax credits have been extended to cover design, and although they are designed primarily for commercial companies, they could be adapted to fit the economics of social businesses.
and others are treating grants more like investments alongside project involvement, technical support, continuous funding, and the coverage of core costs. 4 403) Direct funding for individuals, including the grants given by Unltd, The Skoll Foundation,
are used now by nonprofit organisations to secure longer-term funding with a detailed pledge to provide a social return on the‘investment'.
and Teach for America. 411) Grants as investment including tapered grant funding, public equity, and preference shares. 412) Grants as complements to innovation investment packages.
Grant funding for off-balance sheet expenditure, for example Cordaid's investment and development packages for commodity development projects,
or the UK's Department for International Development (DFID) Frich grant programme for UK market development for African supply chains. 413) Inverse tapering:
and social investment circles such as the Funding Network, United Way, Social Venture Network, or the North Virginian Giving Circle of HOPE (Helping Other People Everydy).
and z). Mission-related investment Philanthropy has moved increasingly to softening the distinction between grant and investment viewing funds as supporting projects that contribute to a specific mission,
including transformations of whole sectors for social ends. 419) Strategic investments to transform sectoral provision, for example, the Bill and Melinda Gates Foundation's investment in small high schools across America;
and the Prosperity Initiative; which creates sectoral partnerships to stimulate industries that create income and employment for the rural poor. 420) Venture philanthropy focused on innovation in particular sectors,
or‘blended value'measures and‘social return on investment'measures used for stakeholder communications (for more information on metrics see methods 208-229). 426) Effective philanthropy methods,
Much has been written about social returns on investment, triple bottom lines and‘blended value'2 but how to ensure that the interests of investors remains subordinate to the social mission remains a critical question for social enterprise.
and financial returns on investment or at least, reduce the negative impacts of investments. Investments can be screened negatively to exclude, for example,
companies and organisations which are responsible for exploitative labour practices, cause harm to people and planet or are at odds with the values and mission of the investing organisation.
Investments can also be screened positively to include companies which further social and environmental goals. For example
the Norwegian Government Pension fund follows a series of ethical guidelines issued by the Ministry of Finance these include the stipulation that the fund cannot make investments
'The website Your Ethical Money provides advice on how to direct personal investment into green,
sustainable and ethical products. 457) Mission-connected investment is a form of ethical investing it allows organisations to tie their investments closely to their missions
or so social enterprises in the UK. 459) Social venture funds that use equity-like investments for start-up and early-stage social ventures where loan financing is unsuitable.
These bonds enable investors to release 20 per cent of the value of their 3 SUPPORT IN THE MARKET ECONOMY 187 investment for charity
as with the Mustard seed charity's investment in the fair trade Community Interest Company, Liberation Foods. 465) Investment-readiness support aims to get projects
or promising enterprises to a stage where traditional investors can make investments. This can include
etc) to enable approaches to any funder. 466) Philanthropic investment for growth such as the CAN Breakthrough Social Investment Fund
runs CAN Social Investment, leveraging business support from leading private sector companies, as well as CAN Mezzanine,
seeking a blend of social and financial returns (see also method 361). 3 476)‘ ebays'for social investment, for example, Clearlyso,
Image courtesy of Bill Knight/www. knightsight. co. uk 3 192 THE OPEN BOOK OF SOCIAL INNOVATION Training and formation There is growing interest and investment in the development
This index can be used as a basis for responsible investment, as a way of identifying environmentally and socially responsible companies,
Office of the Third Sector (2009)‘ Social Investment Wholesale Bank: A consultation on the functions and design.'
and means of payment 156-157 public investment 157-160 fiscal moves to promote social innovation 160-161 Grant economy 168-173 grant giving 169-171
improving the grant relationship 171-172 mission related investment 172-173 Market economy 185-189 social finance 185-187 social finance institutions 188
166 National Health Service Duty to Promote 162 National Health Service Social Enterprise Investment Fund 158 NHS Innovation Hubs 135 NHS Institute
including investment appraisals, impact assessments, and newer devices to judge success, such as social returns on investment or blended value.
Communication is essential at this stage. Social innovators need to capture the imagination of a community of supporters through the combination of contagious courage and pragmatic persistence.
but also because of public subsidy of technology and private investment in incubators, venture capital, and startups. The equivalent potential supports for social innovation foundations and public agencies are much weaker.
such as those that aim at supporting long-term R&d investment and economic growth, whilst reducing income inequalities,
Further support, investment advice and funding for SMES and young companies is also available through the Commission's Startup Europe programme for web and tech entrepreneurs.
The term seed suggests this is a very early investment meant to support the business until it can generate cash on its own
or until it is ready for further investment. Seed funding is probably the hardest money for aspiring start-up entrepreneurs to get.
However, according to CB Insights (2014), 2013 was a big year of venture investments at the seed stage.
and capital sources behind the funding and mentoring of seed investments. Other companies organise events where start-ups are awarded with seed funding.
most developers or organisations that invest in mobile are in fact looking for a return on their investment.
and 5) the reciprocity and cross investment between project 43 creators and crowdfunders. Another stream of literature (Organisciak, 2008) refers to academia, charity, money, fun, community participation, forced participation, self-benefit from the product,
1. One big issue is how to provide infrastructural investments such as broadband deployments and pan European digital services that underwrite robust, equal,
more investment in this area is needed. Policy-making should encourage social innovations to be tested and implemented in specific social settings.
and to improve investment in those that really work. This is, therefore, also a recommendation related to policy making to support digital social innovation.
and whether they should receive continued investment. 4. As the basis for understanding and assessing the evidence of impact for a specific intervention or service.
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