Deadline: 31 March 2020
This call for proposals is published under Regulation (EU) No 1296/2013 of the European Parliament and of the Council of 11 December 2013 on a European Union Programme for Employment and Social Innovation (“EaSI”) and amending Decision No 283/2010/EU establishing a European Progress Microfinance Facility for employment and social inclusion.
The call is financed under the European Programme for Employment and Social Innovation “EaSI” 2014-20203 which is a European-level financing instrument managed directly by the European Commission to contribute to the implementation of the Europe 2020 strategy, by providing financial support for the Union’s objectives in terms of promoting a high level of quality and sustainable employment, guaranteeing adequate and decent social protection, combating social exclusion and poverty and improving working conditions.
Purpose
Social Entrepreneurship support under the European Union Programme for Employment and Social Innovation (EaSI)
- One of the objectives of the EaSI programme is to promote employment and social inclusion by improving access to finance for social enterprises and supporting the development of the social enterprise finance market.
- Under the EaSI Microfinance and Social Entrepreneurship axis, at least 68 million EUR are earmarked for this purpose. Several financial instruments have been deployed under or with support from EaSI:
- The EaSI Guarantee scheme was launched in June 2015 to cover loans (of up to EUR 500 000) to social enterprises. This risk-sharing mechanism gives incentives to social enterprise investors to reach out to entrepreneurs they would not have been able to finance otherwise.
- The EaSI Capacity-Building Investments window was launched in December 2016. It aims at building up the institutional capacity of selected social enterprise finance providers in Europe primarily through equity or quasi-equity investments.
- Under the EaSI programme, the total amount that a social enterprise can receive is EUR 500 000 (state aid rules to be respected). Support under the programme is limited to enterprises, not listed on the stock market, with a maximum of EUR 30m turnover.
Objectives – Priorities – Outputs
The objective of the call for proposals is to contribute to the development of a social finance market, by designing and launching financial instruments for social enterprises and, at the same time, generating effective demand for social finance among social enterprises by developing their “investment readiness”. Ultimately this should enable more social enterprises to take on repayable finance for developing and scaling up their business model.
In this way the call aims at feeding the pipeline for the EU level financial instruments such as the EaSI Guarantee, the EaSI Capacity Building investments, the EFSI social impact investment instruments, as well as future EU level instruments for social entrepreneurship which will be launched under the InvestEU Fund.
- Strand A: Establishment of social finance partnerships
- This strand encourages the first steps towards a social finance instrument by facilitating the development of a consortium and commitment to act in view of laying the groundwork for a future financial instrument. It is also meant to encourage learning from good practice examples and expertise that can guide the formation of this partnership.
- The concrete outputs should include a Memorandum of Understanding between private, public and not-for profit-partners documenting:
- a detailed assessment of the social finance market and a vision for closing gaps and overcoming deficiencies in the supply of social finance, including needs in terms of types and size of investments and assessment of the investment readiness of potential investees;
- assessment of the suitability and feasibility of setting up a sustainable social finance mechanism;
- identification of suitable managers for the financial product envisaged;
- the commitment of the partners (including their roles and contributions) to contribute to, and to collaborate in, establishing a financial product that provides finance for social enterprises and that works in synergy with start-up and business development services for social enterprises;
- the outline of an investment strategy for this financial product, in particular, the key areas of vision, investment focus (geographical and sector focus), models of intervention, risks and returns, types of investee organizations, form and size of investment, co-investment, non-financial support;
- an outline of the investment readiness plan including an indication of the methodologies, tools and activities envisioned for enabling social enterprises to become investment ready;
- a description of the strategy and actions planned for achieving this after the end of the projects.
- Strand B: Establishment of social finance instruments and mechanisms
- This strand is aimed at mobilising key partners (potential investors, support organisations and stakeholders) to act and to cooperate with a view to setting up a concrete financial instrument. This type of action can give a strong signal to capital providers by demonstrating the feasibility of social finance.
- The concrete outputs should include a commitment of different types of investors (private investors, donors, public authorities), social enterprise support organisations and intermediaries and necessary agreements between private, public and not-for-profit partners to establish a financial instrument, including :
- the legal agreement of the partners (specifying their roles and contributions) to finance, set up and manage a financial instrument providing finance as well as investment readiness / follow-up support to social enterprises;
- the detailed investment strategy agreed encompassing, in particular, the key areas of vision, investment focus – geographical and sector focus, models of intervention, risks and returns, types of investee organisations, form and size of investment, co-investment, non-financial support, governance structures, obligations and benefits of investors, management rules and procedures as well as monitoring and evaluation arrangements;
- all contractual arrangements needed for the registration of the financial instrument, for fundraising, for investments, lending or underwriting and for the conduct of management;
- the investment readiness strategy including methodologies (e.g. training, coaching, mentoring, capacity building), tools and actions planned to ensure a steady and balanced deal flow and sustainability for the financial instrument;
- the methodologies, procedures or resources (e.g. for due diligence, impact measurement and reporting) jointly applied by the partners to reduce transaction costs and build mutual trust and confidence.
Guidance for the preparation of proposals and activities
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- For Strand A:
- a short overall description of the social finance market targeted by the proposal, indicating the type of social enterprises targeted and describing the situation on both the demand and the supply side.
- a description of the strategy and action plan for mobilising potential investors, support organisations and intermediaries that would sign a Memorandum of Understanding.
- For Strand B:
- a baseline assessment of the social finance market giving an indication of the stage of development of the market the applicant is operating in, the type of social enterprises targeted and their needs in terms of financial support (types of financial instruments needed and size of investments) and non-financial support (assessment of skills deficits), key barriers and a vision for closing gaps and overcoming deficiencies in the supply and demand of social finance.
- a Memorandum of Understanding or a cooperation agreement between the investor(s) and support organisation(s), including:
- an investment strategy agreed between partners (specifying objectives, action plan, resources, risks/return profile etc.) for the financial product to be established
- a sound (internal or external) feasibility assessment of the investment strategy
- an identification of an organisation that could potentially manage the financial instrument.
- For Strand A:
Description of the activities to be funded / Type of actions
- Actions on both strands must be fully carried out in EaSI participating countries and must focus on supporting social enterprises that are in need of smaller investments (< 500,000 EUR).
- Activities necessary to deliver the outputs may be funded under this call for proposals. These may include a mix of activities such as:
- Analytical activities such as market assessments, mapping projects, assessment of feasibility and suitability of setting up social finance mechanisms/instruments, design of methodologies, tools, processes;
- Marketing/networking actions aimed at bringing in additional investors (e.g. organisation of meetings or participation in relevant conferences/ fora that gather potential investors);
- Training activities and capacity building actions (e.g. aimed at developing capacities for managing investments);
- Knowledge dissemination and know-how transfer from and to peers in other EaSI participating countries (e.g. study visit, expert workshop, adaption of tools, procedures/contracts, etc.);
- The replication or adaptation of proven financing or support models, to be implemented in other countries. This may also include translations.
Budget Information
- The total budget earmarked for the co-financing of actions is estimated at EUR 2 500 000 million.
- The EU grant requested should indicatively be:
- for strand A: between EUR 150 000 and EUR 200 000
- for strand B: between EUR 200 000 and EUR 250 000
Eligibility Criteria
- For British Applicants: eligibility criteria must be complied with for the entire duration of the grant. If the United Kingdom withdraws from the EU during the grant period without concluding an agreement with the EU ensuring in particular that British applicants continue to be eligible, British beneficiaries will cease to receive EU funding (while continuing, where possible, to participate) or be required to leave the project on the basis of the article of the Grant Agreement allowing termination due to a change of the legal situation of the beneficiary.
- Legal entities properly established and registered in the following countries are eligible as lead applicant and co-applicants:
- To be eligible, the lead applicant, co-applicant and affiliated entity may be public or private entities of any type.
For more information, visit https://ec.europa.eu/social/main.jsp?callId=578&catId=629&furtherCalls=yes&langId=en