It’s human to think in boxes. It gives a homely feeling of structure, focus and simplicity. Unfortunately, social problems are everything but simple. Their shock waves are felt far away from the source and do not necessarily stop at borders or fences. So why should innovations trying to solve these issues be constrained to individual countries? It doesn’t make sense.
The big challenges of today exist in complex, often distorted (eco-)systems. They involve a multitude of stakeholders, a variety of mind-sets, and very different motivations, cultures and goals. But they have one thing in common: effective solutions require huge funds that the public sector alone isn’t able to mobilize. Achieving the SDGs calls for the incredible amount of USD 3.1 trillion per annum to fill the gaps, as everyone can read in prominent publications, e.g. from OECD and the WEF. Thus, all eyes are on the private sector. And this is the point where venture philanthropy and social investment come into play.
Quite naturally, looking on the other side of the fence involves risk. What if my investment gets lost because I can’t properly assess the local ‘language’, framework and structure? Who can I really trust to co-invest or partner with? How can I share the burden of additional expenses – from due diligence to legal structuring to monitoring to assessing impact? And do I, as a social investor or venture philanthropist, have the capacity to really add value abroad? What is the role that I can play for more impact across countries and where are the stories – positive or negative – that I can learn from to avoid failure and fulfil my goals? As is typical in imperfect ecosystems, one answer is collaboration.
Yet even if a social innovator, investor or entrepreneur has lined up all the necessary ingredients – from legal support (ideally pro bono) to capacity building (investment readiness support) to a great consortium of like-minded actors – scaling innovative impact models across borders sounds easier than it is. But luckily, there are shining examples. Discovering Hands (DH) initially started in Germany by engaging blind women as medical tactile examiners for improved breast cancer detection. Better inclusion and better health in one solution combined – a compelling model for impact. Although the social enterprise is active in several countries today, it wasn’t easy to find the ideal way to achieve regional scale. After the successful proof of concept of its business and impact model in Germany, a first international franchise pilot of Discovering Hands was successfully tested and funded in Austria. In a next step, FASE supported the social enterprise in building a European investor coalition: social business angels, foundations and family offices from Germany, Austria and the Netherlands jointly agreed to finance the further internalisation of the social enterprise.
Venture philanthropist and social investors often have strong preferences for investing in their home markets (so-called home bias). However, if we really want to scale social innovation across Europe and build a single European market for social innovation, it is key to foster cross-border venture philanthropy and social investment.
Finally, this is the reason why we are here at the EVPA conference: to find effective ways to collaborate and create a true cross-border impact ecosystem. It’s so much more than just an accumulation of boxes. Let’s create real systems change.
Markus Freiburg is Founder and Managing Director Financing Agency for Social Entrepreneurship (FASE)
500+ key players in the social investment and venture philanthropy sector will meet on 29 and 30 November, in Warsaw, Poland for the 14th EVPA Annual Conference. Check here the details about the programme, speakers and registration.