Acclaims for this book

International Acclaims

Everybody interested in social entrepreneurship should get a copy of this book. It is a must-read for all those who want to understand the intricacies of social enterprises.

– Wolfgang Spiess-Knafl, Director of the European Center for Social Finance, Author of Impact Investing, Germany

We have to mobilize more financial resources to solve social and environmental challenges. This guidebook will help to achieve this goal!

– Dr. Andreas Rickert, CEO, PHINEO gemeinnützige AG, Germany

A fine guide to help social entrepreneurs develop an appropriate business model.

– Prof.dr. Jan Jonker, Chair Sustainable Entrepreneurship, Radboud University Nijmegen, The Netherlands

This book gives a contemporary overview of the opportunities and challenges related to social impact ambitions and measurement.

– Prof.dr. Karen Maas, Director Impact Centre Erasmus, Erasmus University Rotterdam and Professor of Accounting & Sustainability, Open University, The Netherlands

This much needed book is not only a great roadmap for social entrepreneurs, but also a wonderful resource for those of us teaching social entrepreneurship!

– Barrie Litzky, Associate Professor, Drexel University, USA

Belgian Acclaims

"This book A Financial Guide for Social Entrepreneurs is very relevant for all system change social entrepreneurs in Belgium and to our Ashoka Fellows that have also contributed as case studies such as Arnoud Raskin, founder of Mobile School & StreetwiZe. It is a fantastic resource to navigate the complexity of funding their idea and impact. Thank you to Professor Dentchev and the co-authors for this contribution, which will have a tremendous impact on continuing to build the supportive ecosystem for social entrepreneurs in Belgium."

– The Ashoka Belgium Team

This is a complete and well-structured work that should be mandatory literature for all entrepreneurs, be they social, impact, or mainstream entrepreneurs.

– Wim Beazar, President of SOIF De Punt, Belgium

A great source to dig in and get all the information needed to set up or develop a company with a positive impact.

– Céline Bouton, Director, LITA.co, Belgium

Financial Guides to Social Entrepreneurs, that combine case studies, conceptual frameworks, analysis, and practical recommendations, like this book, is much needed in Europe and around the globe. Only financially sustainable social enterprises can promote the social innovations that are needed to mitigate the economic and social damage brought by the coronavirus pandemic, and to provide models for redesigning societies and economies to recover from the crisis.

– Gerhard Bräunling, Expert in Social Entrepreneurship, Belgium

This book offers a good overview of how the Belgian ecosystem of social entrepreneurship and impact investing looks like anno 2020.

– Piet Colruyt, Impact Investor, Belgium

This book provides for both nascent and experienced social entrepreneurs the opportunity to reflect upon their financial challenges and solutions in creating a more sustainable society.

– Chantal Cooreman, Belgium Impact

This guide includes both a comprehensive theoretical framework on social entrepreneurship as well as field examples which illustrate the concepts in a very relevant way.

– Sevan Holemans, Managing Director, Solifin ASBL/VZW, Belgium

An essential book to develop your social project or to support social entrepreneurship in Belgium. It bases its theories on practical cases, in a serious academic approach and a language accessible to the greatest number. To be read urgently!

– Marie-Laure Jonet, Founder and Director, DiversiCom, Belgium

This book is a must-read for every social entrepreneur. It will help them to increase and sustainalize their impact for sure.

– Lode Leirens, Manager Sustainable Business & Social Enterprises, BNP Paribas Fortis, Belgium

A guide as we love it: the right focus, to the point and practical.

– Björn Macauter, General Manager, Ondernemers voor Ondernemers, Belgium

This great book brings together the mayor insights you need to know to start up and grow a social enterprise. Having access to this document in the early days of StreetwiZe • Mobile School would have saved us a lot of time and energy. We are flattered to be chosen as one of the case studies in this thoroughly elaborated document.

– Arnoud Raskin, Managing Director, StreetwiZe • Mobile School • StreetSmart, Belgium

This book is very hands-on! A true guide for social entrepreneurs.

– Sarah Schelstraete, Director, Sociale InnovatieFabriek, Belgium

This book guides social entrepreneurs through the financial wilderness. But more importantly, it emphasizes the need for having a strong business model and a broad ecosystem. Social impact is created thanks to partnerships and focus.

– Olivier vanden Eynde, CEO, Close the Gap, Belgium

Table of Content

Preface

Chapter 1. Financial Challenges of Social Entrepreneurs

1.1. Introduction

1.2.Meet the Social Entrepreneurs

1.3.Social Entrepreneurs with different backgrounds

1.4.The Financial Challenges of Social Entrepreneurs

1.4.1.Financial Challenge 1: Access to funding

1.4.2.Financial Challenge 2: Complexity in the business models of Social Entrepreneurs

1.4.3.Financial Challenge 3: Predominant focus on social impact

1.5.The overall approach of this book

1.6.Summary in bullet points

Chapter 2. Gaining Access to Funding

2.1.Introduction

2.2.Funding and the life-cycle of social ventures

2.2.1.Funding during the explorative stage of development

2.2.2.Funding during the validation stage of development

2.2.3.Funding during the building stage of development

2.2.4.Funding during the growth stage of development

2.3.How to secure funding?

2.3.1.Internal acquisition of financial skills

2.3.2.External acquisition of financial skills

2.4.Summary in bullet points

Case study – Close the Gap

Chapter 3. Communications

3.1.Introduction

3.2.Communication pillars for Social Enterprises

3.3.The Challenge: communicate, communicate, communicate

3.4.How to create a good communication strategy for SEs

3.5.Tips to improve the communication of Social Entrepreneurs

3.6.Summary in bullet points

Case study – DiversiCom

Chapter 4. Impact measurement

4.1.Introduction

4.2.The theory of change

4.3.Stakeholder engagement

4.4.Characteristics of good measures

4.5.Summary in bullet points

Case study - Goods to Give (G2G)

Chapter 5. The Supportive Ecosystem for Social Entrepreneurs

5.1.Introduction

5.2.Defining Entrepreneurial Ecosystems

5.3.The Support Aspect of Ecosystems

5.4.The Main Ecosystem Actors

5.5.Becoming an Ecosystem Champion

5.6.Summary in bullet points

Case study – Belgium Impact

Chapter 6. Business Model

6.1.Introduction

6.2.The Importance of Business Model Thinking

6.3.Sustainable and Inclusive Business Models

6.4.Business Models of Social Entrepreneurs

6.5.The need of Financial Planning

6.6.Lean structures

6.7.Summary in bullet points

Case study – Mobile School / StreetwiZe

Chapter 7. Guiding SEs through the Financial Wilderness

APPENDICES

Appendix 1: Overview of Social Entrepreneurship Ecosystem Actors in Belgium

Appendix 2: Inspiring Cases of Social Enterprises in Belgium

Authors’ Short Bio’s

List of References

List of Figures

Figure 1: Social Entrepreneurs on the For-Profit vs. Non-Profit Spectrum

Figure 2: Movements of SEs

Figure 3: The overall approach of this book

Figure 4: The types of funding sources depending on the life-cycle of SEs

Figure 5: Financial actors in impact investing in Belgium

Figure 6: Key aspects of building the communication strategy for SEs

Figure 7: The three pillars of SEs Theories of Change

Figure 8: The different steps of impact measurement

Figure 9: SEs and Entrepreneurial Ecosystems for a greater social impact

Figure 10: The Building Blocks of SEs business models

Figure 11: Guidelines to Finance in Social Entrepreneurship

Table of Abbreviations

3Fs: family, friends and fans/fools

BoP: Base of the Pyramid

EE: Entrepreneurial Ecosystem

HR: Human Resources

IT: Information Technology

KPI: Key Performance Indicators

NGOs: Non-Governmental Organizations

SEs: Social Entrepreneurs

SROI: Social Return on Investment

Preface

Social entrepreneurs (SEs) are omnipresent in our society. Belgium counts more than 18,000 social enterprises, and in the European Union, they are responsible for about 13 % of the overall employment (Nyssens and Huybrechts, 2020). With their focus to resolve grand social and environmental challenges, SEs play a vital role in the sustainable development of our planet. Despite their noble ambitions, however, this endeavor is not easy to accomplish for many of them. SEs face major challenges to find the necessary resources for the development of their activities (Saebi, Foss & Linder, 2019) and thus count often on the support of others (Montgomery, Dacin & Dacin, 2012).

This book focuses on the specific challenge of SEs to finance their activities. All five co-authors of this book have witnessed a variety of financial challenges during our close collaboration with social entrepreneurs and their ecosystems. Hence, the main objective of this book is to offer a guide through what some SEs may even experience as the financial wilderness. The starting point of this book was our yearlong experience in finance and social entrepreneurship. We started with numerous discussions among ourselves, in order to identify what we think might be the most pressing financial challenges and respectively possible solutions to suggest to SEs. With these ideas at hand, we organized 3 focus group discussions in the Spring of 2019. The focus groups were ranging from 4 to 8 participants in a mixed group of SEs, impact investors and other supportive organizations. These focus group discussions have greatly contributed to a better understanding of the financial challenges that SEs face in practice. These exchanges have also helped us to suggest relevant solutions.

Overall, we have identified some technical challenges for financing social entrepreneurs, related to their financial competences or related to the availability of capital. But we have also identified some underlying and fundamental reasons why SEs may experience the financial aspect of their activities as challenging. Therefore, this book goes beyond the suggestion for SEs on how to strengthen their financial competences and how to access capital. In addition, we argue with this book in favor of solid business models for social entrepreneurship. In fact, we suggest that SEs can resolve a great deal of their financial challenges by focusing on the fundamentals of their activities, by developing a solid business model, by engagement of supportive ecosystems, by impact measurement and by effective communications. In this sense, SEs may want to work on the fundamentals of their activities as much as on the improvement of their financial knowledge.

The suggestions provided in this book are embedded in the scientific literature, as we would like to ground the proposed solutions in knowledge already gathered on this topic. However, it is important to mention here that this book constitutes a practical guide. As such, one set of the suggested solutions might be applicable for some, while another set could be relevant to others. The financing of SEs cannot be reduced, unfortunately, to a simplified set of dos and don’ts. So please take our ideas rather as a source of inspiration on how to strengthen the performance of social enterprises. We hope that our suggestions can provide inspirations to resolve the financial challenges of SEs. To that end, we have included illustrative cases to Chapters 2 to 6 that present the proposed solutions to the financial challenges of SEs. The cases of Close the Gap (access to funding), DiversiCom (communications), Goods to Give (impact measurement), Belgium Impact (supportive ecosystems) and Mobile School – StreetwiZe (business model), help to illustrate our messages and to inspire SEs in their journey as a changemaker. This book offers an overview of actors providing impact investment, actors providing