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Financing Social Impact: Funding Social Innovation in Europe

The field of innovation for social purposes is developing rapidly all over the world, with new institutions and methods, growing confi dence 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 eff ectively 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’s goal should be to showcase and support new approaches, with the aim of them being adopted by national, regional and local government. It should also be demonstrating new markets in order to encourage 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, care of the elderly, childcare and environmental services (estimates for Europe suggest that 1 million jobs could be created by a 20% cut in present energy consumption3 ). And leading businesses are responding to the growing importance of the 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 households. 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 signifi cant 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 fi elds – in particular, access to appropriate finance and funding. The result is that although there is no shortage of good ideas, far too few actually achieve the impact they could. The report sets out a vision of where we want to be ten years from now. It highlights how these various infrastructural gaps will need to be filled for the field to develop to maturity, and puts forward recommendations for how we can achieve this.

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