PANF workshop 9 finance

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Financing social innovation

This document describes the above-mentioned workshop. The expert in charge of the workshop design and reporting is Peter RAMSDEN under his assignment to AEIDL for the EQUAL thematic group ‘Inclusive entrepreneurship’.


The EQUAL programme supported many social innovations in the conception and delivery of employment, training and enterprise services that were better adapted to disadvantaged groups. EQUAL based itself around a theory of change that was participative and based on partnership based solutions that would be mainstreamed in the future. However, it is also evident that many projects are as much the product of social innovators who have seen a problem and in some cases dedicated a significant part of their lives to making a difference. This workshop focused on how to support these innovators by using examples from the EQUAL programme but also looking outside EQUAL for examples of how systemic support can be organised for the process of social innovation and specifically finance to back these disruptive innovators while they are building their projects.


  • Should we be financing projects or backing people? The ESF has always backed projects but other investors in social innovation such as Ashoka Foundation and the UK’s UnLtd fund have decided to back individuals. Which approach is more productive in terms of social innovation and policy change?
  • How do finance needs of social innovation evolve at different stages of the social innovation life cycle? (early stage, growth, mainstreaming, maturity)
  • How can finance be structured so that it encourages risk rather than discouraging risk? Most funds have a focus on backing existing (within paradigm) activity rather than encouraging people and projects to think outside the box. Programme managers are not incentivised to support new and risky activity, better the devil you know....
  • Should we be creating regional social innovation funds that aim to maximise their social return on investment SROI? Can these be supported by the ESF? How would they be structured?
  • Is it possible for government to support disruptive innovations? How can we promote innovations which by their very nature are a form of ‘contre pouvoir’ or anti power or at least against the prevailing paradigm.
  • Why do we have lots of new ideas that are developed through projects but relatively few that make it through to the mainstream? What needs to change in the financing of innovation in the ESF so that more ideas go from conception (or invention) to innovation.



Nicholas McKinley, Aga Khan Foundation

K'cidade supports urban communities in their active participation in improving their lives and in creating sustainable development. The project invests in tools, methods and practices for individual organisational and community capacity-building.

The K'CIDADE EQUAL project funded 14 closely interconnected actions from 2005-2007 to promote entrepreneurial spirit and a culture of autonomy and initiative. The project is distinctive in its belief that to achieve successful activation of disadvantaged groups in the long run, it is important first to mobilise communities and raise individual and community confidence. This attempts to tackle the root causes, rather than just the symptoms, of social exclusion and low entrepreneurialism. The project promoter is the Aga Khan Foundation, whose philosophy is that, with the right support, even impoverished individuals and communities can become the leaders of their own destiny and provide for themselves.

K'CIDADE has established three Community Innovation Centres to launch and support a range of community projects. These are designed to be "creative and innovative spaces, planned and managed in the future by the residents". K'CIDADE stresses the importance of finding suitable opening times and locations in the communities as a vital step in making services 'easy-to-reach' and overcoming the real barriers faced by these communities such as low mobility. Strategic support services such as education, entrepreneurship, internet access and the capacity building of civil society organisations are provided or facilitated.

The K’CIDADE presentation focuses on learning from promoting social innovation in the community innovation centres. What have been the key stages to make the model a success? How have they succeeded in building support for the approach within government? What is the funding model that is needed to stimulate innovation at community level? (for example do they back individuals or projects?)

DP name: Urban Community Support Programme – KCIDADE
DP ID: PT-2004-096
National Partners: Associação Comercial e Industrial do Concelho de Sintra (Business and Industrial Association of Sintra); Associação Criança (Childhood Association), Central Business, Fundação Aga Khan Portugal, Santa Casa de Misericórdia de Lisboa (House of Mercy)
Transnational Partners: Spain - E+, Emprende +, Emprende en positivo / UK - Strategic Vision for Entrepreneurship for London South Central (STRIVE)
TCA id code: 3863 STRIVE+
Contact DP: Maria Marques (Fundação Aga Khan)
Address: Centro Ismaili, Av. Lusíada, nº1, P-1600-001 Lisboa
Telephone: +351 217 229001


Norbert Kunz, IQ Consult


Verbund Enterprise set out to tackle the problem of youth unemployment by designing a cost-effective four-phase business training programme, and equipping out-of-work youngsters with a passport that clearly shows their skills. The system has now spread to 10 centres in five Länder, and to keep the ball rolling it has co-founded a national association of start-up advisers with a quality charter.

Norbert Kunz who set up Verbund enterprise reflects on the innovation process that he went through in designing the project. What were the problems that they experienced? How did they overcome barriers? How did the nature of the funding support that they received either benefit or get in the way?


DP name: Verbund Enterprise – Junge Menschen auf dem Weg in die Selbständigkeit
DP ID: DE-EA-22874
National (operational) partners: JugendLOK eV Berlin, ArGe Enterprise Berlin & Brandenburg GbR, Büro für Wirtschafts- und Projektberatung, Existenzgründungs-Team Berlin-Brandenburg, Förderverein für arbeitslose Jugendliche eV Forschungsgemeinschaft für Aussenwirtschaft, Gesellschaft für europäische Kommunikation mbH, IQ-Consult Gesellschaft für innovative Qualifizierung und Beratung mbH, Kolleg für Management und Gestaltung nachhaltiger Entwicklung gGmbH, SNOW Projektbüro eV, Sozialer Bildungsverein eV, iQ Gesellschaft für innovative Qualifizierung eV
Strategic partners: President of the German Parliament Wolfgang Thierse; German Federal Ministry for Economics and Labour; German Children and Youth Foundation; KfW Promotional Bank; Federal Initiative: Businesses – Partner of Youth; GLS Community Bank; Deutsche Bank Foundation Alfred Herrhausen “Hilfe zur Selbsthilfe”; Veolia Foundation; Berlin Volksbank eG; the German Bundesdruckerei and many more
Transational partners: European Enterprise Network ( The Prince’s Trust (UK), CIME (France), ETAL SA (Greece), SACE/Job in/Crea Job (Belgium)
TCA id code: TCA 74
Contact: Norbert Kunz
Address: Seumestraße 7/8, D-10245 Berlin, Germany
Telephone: +49 30 611 34 29


Axel Cavaleri, ADIE

Maria Nowak had already dedicated one career to international development. In the late 1980s she was back in France and started to work in her home country on questions of social exclusion and poverty. She founded the "Association for the Right to Economic Activity" (ADIE) and has single-mindedly fought for a change in perception of people on the margins of society so that they are thought of not as a problem to be solved but as an opportunity to be harnessed. ADIE now lends to more than 17,000 borrowers many of whom come from disadvantaged backgrounds and/or unemployment. Maria Nowak’s personal drive has led to reforms in the laws in France and to the recognition of micro finance by the European Union including the launch of the recent Jasmine initiative.

Axel Cavaleri reflects on how ADIE has innovated during its evolution over the past two decades and in particular discusses how the financing of the organisation has had to be put together piecemeal. (Maria Nowak has talked about having to sign up to 500 local agreements with banks and local municipalities). What would have been the more logical model for developing a large national micro finance institution? How could the ESF have been relevant to this growth?

DP name: Appui aux activités génératrices de revenu dans les réseaux ethniques ou communautés (Supporting income generating activities among ethnic groups and communities)
DP ID: FR-NAT-2001-10994
National partners: Association pour le Droit à l’Initiative Economique (ADIE), Agence Nationale pour l’Emploi (ANPE), Fédération des Associations Franco-Africaines de Développement (FAFRAD), Institut de Recherche et de Formation Education Cultures Développement (IRFED Europe), Maison de l'Initiative Economique Locale (MIEL)
Transnational partnership: TCA 927 Echange d’expérience: création d’entreprise dans les quartiers en difficulté: Sant Cosme Innova (Spain)
Contact: Estelle Mille
Address: ADIE, 4 boulevard Poissonnière, F-75009 Paris
Telephone: +33 1 56 03 59 00