Project Description
Context
Many social organisations use entrepreneurial solutions to solve social and environmental problems, while creating local jobs. Access to patient capital would allow them to be market-driven and grow in scale; complemented with business development support, they would be positioned to achieve impact and financial sustainability. In reality, the regulatory frameworks and the ecosystem level of development limit their growth, making them donor-driven and dependent on public financing. Also, the social investor community is not connected with the Visegrad and the CEE region overall – perceived as fragmented, economically and politically unstable. The result is a significant gap between the region and the rest of Europe in term of social investment and a slow transition from grant dependency to more sustainable and impactful growth.
Solution
Given their experience, key stakeholders from V4 - NESsT, Valores, Pontis and TOL - accompanied by other peers (EVPA, Yunus Social Business Balkans, GSEN), voluntary joined efforts to solve these regional challenges. They formed to lead a region-wide Social Investment Task Force, to build the social investment industry, attracting more and better-suited capital for social enterprises and NGOs, while making them investment ready. It is connected to a global movement that is sharing best practices and accelerating these processes. As Visegrad is more advanced in the region, knowledge and innovation will be transferred from V4 to the Balkans, via working meetings, events, exchanges, a joint report on the assets and advantages of investing in the region, an online resource centre and policy recommendations to help the industry thrive
Regional relevance
Social entrepreneurs in the region face difficulties in raising capital below USD 250,000 (be it grants or soft, patient capital, like low-interest loans or recoverable grants). A country-by-country approach would further fragment the sector, considering the size and scope of the industry at national levels. As the region faces common challenges, a common approach, showing the assets and opportunities of the region and their potential to have greater impact, would help position Visegrad and the CEE region in the European and global market to attract domestic and international funding (EVPA study: only 2% of European social investment capital is spent in CEE) and advance its entrepreneurial drive (75% of the annual budgets of CEE social entrepreneurs' organizations are donor-imposed and have to be used for specific purposes).
Main project objective
Improve the ecosystem for social organizations and social enterprise by developing a regional movement for social impact investing aimed at attracting early stage, patient capital to build sustainable social organisations. Through our project and efforts, we will be able to educate various stakeholders and mobilize domestic and European funding to support best practices and develop new mechanisms needed to strengthen the management teams and build strong, sustainable social organizations.
Supporter
The Fund is an international donor organization, established in 2000 by the governments of the Visegrad Group countries—Czechia, Hungary, Poland and Slovakia to promote regional cooperation in the Visegrad region (V4) as well as between the V4 region and other countries, especially in the Western Balkan and Eastern Partnership regions.
