“Financing for Social Impact – The Key Role of Tailored Financing and Hybrid Finance”
Oslo, 9 November 2017
Tailored financing and hybrid finance promote a more efficient and effective deployment of resources in the VP/SI space. Using the right financial instrument or a mix of instruments is the way to help social purpose organisations (SPOs) gain access to the capital needed for achieving self-sustainability and for scaling. The new EVPA report “Financing for Social Impact – The Key Role of Tailored Financing and Hybrid Finance”, launched during the 13th EVPA Annual Conference aims at helping venture philanthropists and social investors become more efficient in deploying their resources – and achieve even more social impact.
The report looks at how funding can be shaped in a way that meets the financial needs of the SPOs and how they can have access to more resources by having different actors in the venture philanthropy/social investment space collaborating.
In order to help SPOs grow and scale, it is crucial to choose the right financial instrument(s) for each investee in the portfolio. EVPA has developed a three-step process of tailored financing to help VP/SI organisations find the most suitable financial instrument to support a SPO. Additionally, with SPOs adopting new and evolving business models and with new actors, such as banks and corporates entering the VP/SI space, it is crucial to channel the resources available in the most effective way. This is reason why the report also focuses on hybrid finance, which is defined as the allocation of financial resources to impact-oriented investments, combining different types of financial instruments and different types of risk/return/impact profiles of capital providers.
“The three-step approach of tailored financing developed in the report helps social sector funders channel their resources in a more efficient and effective way. Hybrid finance, on its side, opens up a highly divided market of pure philanthropy and pure commercial investment, in order to give space for the true complexity of the market, in which SPOs act at the intersection between both and are particularly in need of funding that reflects their character of being neither purely philanthropic nor purely commercial.”, saysPriscilla Boiardi, EVPA Knowledge Centre Director
You can access the report here!
The European Venture Philanthropy Association (EVPA) is a lively network of organisations sharing the same vision and a common goal: creating positive societal impact through venture philanthropy and social investment. Its mission is to enable venture philanthropists and social investors to maximise societal impact through increased resources, collaboration and expertise.
Currently, EVPA has over 230 members, mainly based in Europe, but also in the United States, Turkey, United Arab Emirates and Asia, showing the sector is rapidly evolving across borders. Its membership covers a full range of venture philanthropy and social investment actors, including venture philanthropy funds, social investors, grant-making foundations, impact investing funds, private equity firms, professional service firms, philanthropy advisers, banks and business schools. The EVPA office is based in Brussels, Belgium. www.evpa.eu.com
Ioana Traista, EVPA Communications Manager