European venture philanthropists and social investors are living up to the expectations of supporting real social innovation by investing in early-stage high-risk ventures, bringing them through the Valley of Death.
This and much more in the new EVPA survey: “Investing for Impact”.
EVPA releases “Investing for Impact | The EVPA Survey 2017/2018”, the only study that explores where and how European venture philanthropy and social investment (VP/SI) organisations deploy resources to support social purpose organisations (SPOs). In 2018, VP/SI organisations report growing budgets coming from a diverse group of funders, more stable and professional human resources, and an improved pipeline management.
“Investing for Impact | The EVPA Survey 2017/2018” gathers data from 110 VP/SI organisations across Europe, either focussing exclusively on social return, or seeking a social return alongside a financial one, and adopting the core practices of the VP approach (i.e. tailored financing, non-financial support and impact measurement and management).
An interesting trend for 2018 is the growth registered in Central Eastern Europe (CEE) with a 7% of the resources allocated there, compared to the 2% of two years ago. This result is likely to reflect the increased number of organisations coming from this region and investing locally, also thanks to the work EVPA is carrying out in this region since 2014.
Relevant key data and trends include:
- VP/SI organisations help SPOs get through the early stages of their growth, with half of the respondents providing on average €200,000 or less per SPO.
- Equity is the most patient form of capital with almost all respondents using this financial instrument to support SPOs for more than four years.
- Loans are the most deployed financial instrument in the VP/SI space, followed by grants, equity, and hybrid instruments (only 5%).
- The large majority of VP/SI organisations with positive financial return expectations, seek moderated financial returns: respondents deploying equity having expectations not exceeding +10%, and those using debt expecting returns from 0% to +5%.
- Grants are largely used to support SPOs at incubation and start-up.
“The purpose of this report is to provide independent industry statistics, which are crucial in a sector that is increasingly gaining importance and attention among a wide range of actors, including policy makers, traditional investors and grant-making foundations. Furthermore, since the VP/SI sector is evolving rapidly, it is crucial to gather and aggregate data that are consistent with the definition and the boundaries of the VP/SI space” mentions Steven Serneels, EVPA CEO a.i.
“EVPA’s role is particularly important when it comes to providing market research and data on recent developments in the field of impact investing and venture philanthropy. These data constitute much-needed evidence and contribute to shaping EU policy and initiatives”, stated by Manuela Geleng, Director of “Skills” Directorate at the Directorate General for Employment, Social Affairs and Inclusion at the European Commission
The full survey and infographic can be consulted here.