The paper argues that the social entrepreneur movement has a critical need to address the funding gaps in risk-taking capital for social enterprises. The new enterprises need investment if they are to grow and prove their innovations, and this needs to be investment that shares the risks of the enterprise.
But a dearth of such capital is hampering the sector’s development ... and the authors of this paper are arguing that new instruments and stakeholder relationships need to arise if we are going to meet this challenge:
“ Put simply, between the traditional approach to financing non-profit ventures through grants, fundraising and limited use of debt, and the traditional approach to financing for-profit ventures through market-rate private equity and debt, there is a funding gap into which an increasing number of social enterprises are falling ... Innovation in the allocation of capital for social change is needed if existing vehicles are falling short of accomplishing our objectives.” — Emmerson, Freudlich and Fruchterman
Resources.
— “Nothing Ventured, Nothing Gained: Addressing the Critical Gaps in Risk-Taking Capital for Social Enterprise” by Jed Emmerson, Tim Freundlich and Jim Fruchterman, published 2006 by the Skoll Centre, Oxford University
— Social Edge website discussion on this paper
— “Foundations: Essential and Missing in Action” interview with Jed Emmerson by Alliance Extra March 2006
