BUDGET HEADING Preparatory action. Social innovation driven by social business and young entrepreneurship CALL FOR PROPOSALS - VP/2013/017

Transcription

1 EUROPEAN COMMISSION DG Employment, Social Affairs and Inclusion Europe 2020: Employment Policies Sectorial Employment Challenges, Youth Employment and Entrepreneurship BUDGET HEADING Preparatory action Social innovation driven by social business and young entrepreneurship CALL FOR PROPOSALS - VP/2013/017 Supporting the demand and supply side of the market for social enterprise finance In view of the large number of enquiries, please do not telephone. Questions should be sent by only to: EMPL-VP @ec.europa.eu. To ensure a more rapid response it is helpful if applicants send their queries in English, French or German. The English version of the call is the original. 1

2 Table of Contents 1. INTRODUCTION BACKGROUND OBJECTIVES THEME PRIORITIES INDICATIVE TIMETABLE BUDGET AVAILABLE ADMISSIBILITY REQUIREMENTS EXCLUSION CRITERIA Exclusion from participation Exclusion from award Supporting documents ELIGIBILITY CRITERIA Eligible applicants Eligible activities SELECTION CRITERIA Financial capacity Operational capacity AWARD CRITERIA OTHER REQUIREMENTS DEFINITIONS LEGAL COMMITMENTS PROCEDURE FOR THE SUBMISSION OF PROPOSALS Electronic submission Submission on paper Presentation of applications Contacts ANNEX

3 1. INTRODUCTION BACKGROUND Social enterprises as drivers of social innovation An important pillar of the European Union s ambitious socio-economic strategy for the next decade Europe 2020 is social innovation, which in essence is the process of developing new approaches or practices for resolving societal challenges through mobilising civil society actors to further inclusive, socially fairer and environmentally sustainable economic development and social change. This includes re-designing and reengineering business models and value chains, new relationships or collaborations between public, private and third sector organisations, and delivery mechanisms for public policies. In this context, social entrepreneurs and social enterprises 1 are drivers of change that operate on the basis of viable business models. They also generate jobs through activities that meet social needs in the context of sustainable and inclusive development. The financial, economic and fiscal crisis has drastic social consequences on Europe s young generation, which not only has been deprived of employment opportunities and lacks social security, but also is experiencing a crisis of values and a lack of confidence in the capacity of established institutions to tackle pressing social and environmental issues. Therefore, young people are particularly interested in engaging in civil society initiatives and in alternative business models such as social enterprises, which aim at generating social impact and social value. A specific barrier to developing and implementing social innovation initiatives is access to finance that suits the specific needs of social entrepreneurs and social enterprises as their driving forces. This is in particular relevant for organisations created or managed by young or early stage social entrepreneurs, Social entrepreneurship support under the EaSI programme On 6 October 2011, the Commission proposed a Programme for Social Change and Innovation 2, now named Programme for Employment and Social Innovation (EaSI), which will among other things provide support for social enterprises in the programming period One of the objectives of the EaSI proposal is "to promote employment and social inclusion by increasing the availability and accessibility of microfinance for vulnerable groups and micro-enterprises, and by increasing access to finance for social enterprises." In introducing a specific financial instrument for social enterprises, the EaSI proposal translates into practice the action of the 90m euro European financial instrument announced under the Social Business Initiative: in the Commission proposal, within the Microfinance and social entrepreneurship axis, EUR million were earmarked for social enterprise support for start-up and existing social enterprises. The final figure depends on the outcome of the negotiations on the Multiannual Financial Framework Under the EaSI, the Commission aims at supporting the development of the impact investment market and facilitating access to finance for social enterprises by making 1 For the purpose of this Preparatory Action, the following terms are used synonymously: social business, social enterprise and social venture; social finance and impact investment Structural Funds and European Structural and Investment Funds 2 COM(2011)609 final 3

4 available hybrid financing for social enterprises which could take the form of a combination of equity, quasi-equity, loan instruments and grants. The total amount that a social enterprise can receive is EUR (state aid rules to be respected). Support under the programme will be limited to enterprises, not listed on the stock market, with a maximum of EUR 30m turnover (most social enterprises are smaller). For the implementation of the financial instrument, the Commission will cooperate with a financial institution. The selected organisation could provide funding to social enterprises directly or indirectly through intermediaries such as impact investment funds. Social entrepreneurship under the European Social Fund (ESF) The European Social Fund (ESF) 3 was established by the Treaty of Rome and is the longest existing Structural Fund. It is the main financial instrument through which the EU translates its strategic labour market, human resources development and social inclusion policy aims into action. The implementation takes the form of Operational Programmes (OPs) defined in coherence with national strategic reference frameworks. The OPs are drawn up by the Member State or any authority designated by the Member State. They include information on the priority axes and their specific targets (Article 37 of Regulation 1083/2006). For each OP, the Member State designates a number of authorities, including a Managing Authority. The responsibilities of the Managing Authority include ensuring that operations are selected for funding in accordance with the criteria applicable to the operational programme (Article 60 of Regulation 1083/2006). On 6 October 2011, the Commission proposed the new Regulations that will govern the European Social Fund in the period One of the foreseen investment priorities reads "Promoting the social economy and social enterprises" (Article 3) 5. Title IV of the proposed general regulation 6 widens the scope for the use of financial engineering instruments under the structural funds. Thus the new ESF can be expected to provide possibilities for the promotion of social entrepreneurship through financial instruments. Barriers in the social finance market Barriers to develop and strengthen the market for social finance have a different weight across Europe, the most relevant being: On the supply side: lack of suitable financial instrument in place; few investors prepared to invest; scarcity of significant public sector initiative; little experience in specifying a sustainable investment strategy and risk/return profile of a social finance fund; lack of capacities and tools to assess the viability of business plans and social impact, insufficient quality of investment propositions, absence of market facilitators (such as qualified intermediaries and market places) or business angels etc. 3 In the programming period the ESF is governed by the following Regulations: Council Regulation (EC) No 1083/2006, Regulation (EC) No 1081/2006, Commission Regulation (EC) No 1828/2006, available at: 4 COM(2011) 607 final /2, 5 Ibid. 6 COM(2011) 615 final/2 4

5 On the demand side: insufficient orientation on capital markets, but on the grant economy; legal structures which discourage the attraction of (quasi-) equity; lack of transparency of the market for social finance; insufficient experience in making proposals for external financing, or for combining different sources and types of finance (e.g. grants/loans); costs of getting investment ready; insufficient infrastructures /business development services/ incubators, etc. European Parliament Preparatory Action The European Parliament recognised the need to overcome these barriers through smart action and asked the Commission to implement this preparatory action, working with potential finance providers (in particular managing authorities for structural fund programmes, notably those financed by the ESF) and financial intermediaries in a limited number of pilot regions. The preparatory action is aimed at helping develop and establish feasible, suitable and reliable schemes or funds providing equity or mezzanine funding (including venture philanthropy). The European Parliament expected the results of these learning pilots to be beneficial for the implementation of the relevant Europe 2020 flagship initiatives, notably Youth on the Move, An agenda for New Skills and Jobs, Innovation Union and the European Platform against Poverty and Social Exclusion, and for preparing the ground for an effective use of the ESF and other funds after The preparatory action will be implemented within the meaning of Article 54(2) of Regulation (EU, Euratom) No. 966/2012 of the European Parliament and of the Council of 25 October A total budget of EUR 1 million has been earmarked for this purpose. 5

6 2. OBJECTIVES THEME PRIORITIES General objectives The objective of the preparatory action is to identify, develop, promote and disseminate the good practice of national, regional or local governments and of financial intermediaries in assisting young social entrepreneurs at times of high youth unemployment. As such, the preparatory action will contribute to realising the potential of young and social entrepreneurship, emphasised also in the Commission s Social Business Initiative 2011, Annual Growth Survey 2011, as well as in the Communications Towards a job-rich recovery 2012 and Social Investment for Growth and Cohesion More precisely, this preparatory action aims to support the development of an impact investment market that would enable more social enterprises to take on repayable finance for developing and scaling their innovative business model: Through institution and capacity building with committed actors to boost the supply of social finance, and By facilitating and preparing access to finance for social enterprises through capacity building that generates effective demand for social finance by developing their investment readiness. The main task will be to develop and establish feasible, suitable and reliable financial instruments (schemes or funds providing equity or mezzanine funding, including venture philanthropy). In doing so, the beneficiary will explore and test effective ways of establishing, consolidating, sustaining and linking social finance schemes and instruments, organize learning on what works and how, as well as what does not work, and why. The Preparatory Action is addressed to social enterprises in their early stages, and to social enterprises started or developed by young people that have the potential for realising innovative solutions with a clear social and environmental impact, scaling their innovative approach, or for transferring their approach for replication in particular to young entrepreneurs. Thus, the preparatory action will pave the way for a swift uptake of EU social finance instruments after 2014 (notably the EaSI instrument and financial instruments under the European Structural and Investment Funds) by the creation of a pipeline of demand of impact investment actors for partnerships with the EaSI instrument to share risk, improve capitalization, and build capacity, in particular from Member States with less developed impact investment markets; experimenting with different models to develop the supply and demand side of the social finance market, which will provide a sound basis for fine-tuning the capacity building component of the EaSI instrument to promote social entrepreneurship; learning from good practice in developing and enhancing social finance across the Union, through organized sharing and disseminating of expertise and experience, and through presenting practical examples that demonstrate how (public-private) partnerships can effectively boost the supply of social finance through investing 6

7 in or complementing suitable financial products, as well as the demand through assisting social enterprises in getting investment ready. In order to achieve these objectives, the Commission will have to work together with potential finance providers and financial intermediaries in a limited number of pilot regions. The preparatory action will show ways in which support for young and social entrepreneurship can be most effectively incorporated into regional, urban or local development strategies. Special focus will be on the use that could be made, in the period, of EU financial instruments, in particular the Structural Funds. Specific objectives In order to take into account the variety of market situations in different Member States, the call offers several strands. Each of them addresses a specific configuration of barriers. Strands A, B and C act on the supply side of social finance, strand D on the demand side. For all strands, the focus should be on social ventures that aim at social impact, are financially sustainable, want to scale up (including through franchise) and, for that purpose, want to raise between EUR and EUR Strand A: Establishment of social finance partnerships This strand is particularly relevant for actions in countries in which the social finance market is not developed yet. It aims at addressing situations in which no suitable social finance instrument is in place, with a lack of investors prepared to launch or participate in a financial instrument. Although there is little experience in specifying a sustainable investment strategy and risk/return profile of a social finance instrument, there is some openness amongst potential investors and/or public bodies to contribute to establishing a suitable finance instrument. In order to explore options to close the gap in supply of social finance for innovative social enterprises and to mobilise and commit potential investors and stakeholders to cooperate, the grant aims at reducing the risk of engaging in the first steps towards a social finance instrument by facilitating the development of a consortium and commitment to act. It is also meant to encourage learning from good practice examples and expertise that can guide the formation of this partnership. Strand B: Establishment of social finance instruments and mechanisms This strand is particularly relevant for actions in countries with a relatively low level of development of the social finance market. It aims at addressing situations in which there is no suitable social finance instrument in place and potential investors and intermediaries lack expertise that can guide the drafting of contractual agreements needed for setting up a financial instrument. In order to mobilise and commit potential investors and stakeholders to act and to cooperate with a view to setting up a financial instrument, the grant is meant to reduce the risk of innovation in the social finance market by facilitating the acquisition of specific expertise in this field. Strand C: Establishment of collaborative funding models for social enterprises 7

8 This strand is particularly relevant for actions in countries in which different types of actors are already operating in the social finance market, but in isolation. As a result, these different types of social finance providers (foundations, social investors, public authorities, notably ESF managing authorities) apply a broad range of incoherent and unrelated eligibility criteria return expectations, conditions for repayment, requirements for accounting and reporting etc. In addition, there is a lack of transparency which makes it difficult for social entrepreneurs to develop an efficient mix of funding sources. The absence of suitable platforms, market facilitators (such as qualified intermediaries and market places) or business angels has prevented cooperation between investors, donors and public authorities. In order to improve the availability and effectiveness of suitable and needs-oriented financial instruments for social enterprises, this strand aims at mobilising and committing potential investors, donors and providers of business development services to co-operate with a view to finding innovative approaches to providing finance to social enterprises. Strand D: Development of investment readiness support for social enterprises This strand addresses the insufficient investment-readiness of social enterprises. Even in countries where there is a large pool of capital willing to invest in social enterprises, investments often remain complicated as social enterprises are not "investment ready". This can be explained sometimes by their low interest in repayable financial instruments due to an orientation towards the so-called grant economy, but also by a lack of necessary documents such as impact reports or business plans and insufficient experience in making proposals for external financing, or for combining different sources and types of finance (e.g. grants/loans). In many countries, the quality and quantity of start-up and business development services for social enterprises (incubators etc.) is unsatisfactory. In order to generate a pipeline of social enterprises prepared to access social finance, including under the EaSI programme and the future structural funds, this strand aims at improving the offer of specialised, experienced quality assistance and advice that help address social enterprises' weak capacity in acquiring external financing or for combining different types of finance. 8

9 Expected results Strand A: Establishment of social finance partnerships A mobilisation of potential investors and intermediaries that would sign a Memorandum of Understanding between private, public and not-for profit-partners documenting - the commitment of the partners (including their roles and contributions) to contribute to, and to collaborate in, establishing a financial product providing access to finance for social enterprises, - the outline of an investment strategy for this financial product (objectives, action plan, resources, risks/return profile etc.); and - a description of the strategy and actions planned for achieving this as well as the links and synergies with start-up and business development services for social enterprises. Strand B: Establishment of social finance instruments and mechanisms An activation and commitment of investors and intermediaries that would sign a set of legal documents required by EU and national rules to establish a financial instrument, and necessary agreements between private, public and not-for-profit-partners, documenting: - the legal agreement of the partners (specifying their roles and contributions) to finance, set up and manage a financial tool providing access to finance for social enterprises - the detailed investment strategy, governance structures, obligations and benefits of investors, management rules and procedures as well as monitoring and evaluation arrangements - all contractual arrangements needed for the registration of the financial instrument, for fundraising, for investments, lending or underwriting and for the conduct of management. Strand C: Establishment of collaborative funding models for social enterprises An innovative model of cooperation between investors and intermediaries that would sign a Memorandum of Understanding between private, public and not-for-profit partners (notably strategic philanthropic investors) documenting - the agreement of the partners (including theirs roles and contributions) to collaborate in financing social enterprises - the detailed cooperation agreements for implementing the joint strategy, and for ensuring synergies and added value; and - describing the actions planned to test (for a defined period up to 9 months) a finetuned mix of financial products that facilitates investments in social enterprises. Strand D: Development of investment readiness support for social enterprises An improved (in particular in terms of the quality, quantity or geographical outreach) provision of: - integrated assistance to social enterprises in delivering a realistic, but effective investment readiness plan. - assistance in the contacts and negotiations with potential investors. 9

10 3. INDICATIVE TIMETABLE Stages Date and time or indicative period a) Publication of the call October 2013 b) Deadline for submitting applications 15 November 2013 c) Evaluation period November December 2013 d) Information to successful applicants January 2014 e) Signature of grant agreement January 2014 f) Starting date of the action/ work programme Between December 2013 and March 2014 g) Information to unsuccessful applicants January BUDGET AVAILABLE The total budget earmarked for the co-financing of actions is estimated at EUR 1 million. The maximum grant will be - for strand A: EUR for strand B: EUR for strand C: EUR for strand D: EUR The EU grant is limited to a maximum co-funding rate of 80% of the total eligible costs taking into account the maximum grant amounts above. The Commission reserves the right not to distribute all the funds available. 10

11 5. ADMISSIBILITY REQUIREMENTS To be eligible, applications must: Be sent no later than the deadline for submitting applications referred to in section 3. Be complete and include all the documents indicated in the checklist and the text of the call. Respect the EC co-financing percentage as stipulated in chapter 4 (budget available). Applications must be submitted in writing (see section 13), using the application form and electronic submission system available at and be sent in two copies as a paper application. Applicants are invited to submit their project proposal preferably in English, French or German, in order to facilitate the treatment of the proposals and carry the evaluation through as quickly as possible. Failure to comply with those requirements will lead to the rejection of the application. 6. EXCLUSION CRITERIA 6.1. Exclusion from participation Applicants and co-applicants must be in conformity with Articles 93(1), 94 and 96(2)(a) of the Financial Regulation, Applicants will be excluded from participating in the call for proposals procedure if they are in any of the following situations: (a) (b) (c) (d) (e) they are bankrupt or being wound up, are having their affairs administered by the courts, have entered into an arrangement with creditors, have suspended business activities, are the subject of proceedings concerning those matters, or are in any analogous situation arising from a similar procedure provided for in national legislation or regulations; they or persons having powers of representation, decision making or control over them have been convicted of an offence concerning their professional conduct by a judgment of a competent authority of a Member State which has the force of res judicata; they have been guilty of grave professional misconduct proven by any means which the contracting authority can justify including by decisions of the EIB and international organisations; they are not in compliance with their obligations relating to the payment of social security contributions or the payment of taxes in accordance with the legal provisions of the country in which they are established or with those of the country of the RAO or those of the country where the grant agreement is to be performed; they or persons having powers of representation, decision making or control over them have been the subject of a judgment which has the force of res judicata for fraud, corruption, involvement in a criminal organisation, money laundering or any other illegal activity, where such an illegal activity is detrimental to the Union's financial interests; (f) they are currently subject to an administrative penalty referred to in Article 109(1). 11

12 6.2. Exclusion from award Applicants will not be granted financial assistance if, in the course of the grant award procedure, they: (a) (b) are subject to a conflict of interest; are guilty of misrepresentation in supplying the information required by the Commission as a condition of participation in the grant award procedure or fail to supply this information; (c) find themselves in one of the situations of exclusion, referred to in section 7.1. Administrative and financial penalties may be imposed on applicants or co-applicants who are guilty of misrepresentation Supporting documents Applicants and co-applicants must sign a declaration on their honour certifying that they are not in one of the situations referred to in articles 106(1) and 107 to 109, filling in the relevant form attached to the application form accompanying the call for proposals (cf. no. 3 of check list in annex). 7. ELIGIBILITY CRITERIA 7.1. Eligible applicants To be eligible, - Applicants and co-applicants must be legally established in one of the Member States of the EU - Applicants and co-applicants must be public, private or not-for-profit entities. - For actions dealing with the supply side of social finance (strands A, B and C), applicants must implement the action in cooperation with at least two co-applicants with a view to working towards the access of finance for social enterprises and in particular young entrepreneurs 7. For strand B, the applicant or one of the coapplicants must be an investor committed to invest/co-invest in the financial instrument to be established. Both applications under strands A and C are encouraged to involve investors in the consortium (as applicant, co-applicant, associate or affiliated organizations). In order to assess the applicants and co-applicants' eligibility, the following supporting documents are requested: - Legal entity form accompanied by the relevant supporting documents (see no. 6 of check list in annex) - A letter of mandate from each co-applicant (cf. no. 4 of check list in annex) - A signed letter of commitment (in English, French or German) from each coapplicant explaining the nature of the co-applicant's involvement (technical and financial) in the activities described in the work plan with the aim to achieve the required results (cf. no. 7 of check list in annex). 7 The term "young" refers to both the age and/or the early-stage experience as entrepreneur. 12

13 - In addition, applications under strand B should include a signed letter of commitment from a private and/or public investor (applicant or co-applicant) that has committed itself to invest in / co-invest with the financial instrument to be established (cf. no. 7 of check list in annex). - Applications under strand C should provide a letter of intention from a potential investor willing to invest or co-invest in the financial products (cf. no. 7 of check list in annex) Eligible activities To be eligible, actions must be fully carried out in the EU Member States (one or several). Strand A: Establishment of social finance partnerships Under this strand the following types of activities are eligible: - Assessment of the potential demand (e.g. through a workshop with stakeholders and social enterprises) - Identification and building commitment of potential investors and financial intermediaries - Identification of suitable managers for the financial product envisaged - Knowledge and know-how transfer from other Member States (e.g. study visit, expert workshop) - Assessment of the suitability and feasibility of setting up a sustainable social finance mechanism; Strand B: Establishment of social finance instruments and mechanisms Under this stand, the following types of activities are eligible: - Work of financial experts, lawyers etc. to draft the legal documents for setting up the social finance instrument or mechanism required by EU or national legislation - Professional work to draft the strategy for the operations of the financial instrument (including fund raising and developing capacities for managing investments) - Translations of legal documents in case proven models can be replicated or adapted - IT services in case the financial instrument uses web-tools or is based on a web platform Strand C: Establishment of collaborative funding models for social enterprises Under this strand, the following types of activities are eligible: - Design, assessment of the feasibility and test (for a period of up to 9 months) of innovative models of cooperation between investors, donors and public authorities in fields such as syndicate investments, revenue share agreements between social enterprises and investors, pooling of donations of foundations to provide new instruments such as guarantees or repayable grants, crowd funding, social impact bonds, joint procedures and resources for due diligence procedures, etc. 13

14 Strand D: Development of investment readiness support for social enterprises Under this strand, the following types of activities are eligible: - Investment readiness services (to individual social enterprises or groups of social enterprises) that aim at assisting, developing, strengthening and articulating an investment case to typically raise between EUR and EUR of capital. These services include advice and consultancy, mentoring and coaching, dedicated capacity building, training and peer learning to social enterprises from across different industries and defined geographical locations. Key service areas in support of investment readiness include, but are not limited to the following: o Strategy (strategic objectives, strategy review and development of sustainable business models for social enterprises, values, model of change and commitment to change, stakeholder involvement) o Business planning (business model assessment, business plan review and refining, market analysis, options analysis, implementation of the plan, measuring progress, evaluation and improvement) o Social impact (social value and impact measurement, methods and capability development to articulate, measure, assure and report on social impact) o Finance (Financial modelling, cash flow and financial forecasts, accountancy, finances, tax planning) o Sales & contracting (marketing strategy and customer base development, unique selling point, branding, public sector procurement processes, payment by results) o Governance & performance (legal structures, governance models, risk assessment, quality management, social franchising) o Investment (capital structure, fundraising strategies and practices, identifying and engaging with potential investors, investor panels and showcasing events) Implementation period Projects should start between the 2 nd of December 2013 and the 3 rd of March Expenditure incurred before the signature of the grant agreement is at the applicant's risk. Therefore, applicants should note that if their project is approved they will not necessarily receive the grant agreement prior to the start date of the action and should take this into account in programming the timing of their project. The maximum duration of projects is 12 months. Applications for projects scheduled to run for a longer period than that specified in this call for proposals will not be accepted. 8. SELECTION CRITERIA 8.1. Financial capacity Only organisations with the necessary financial and operational capacity may be considered for award. Applicants and co-applicants must have stable and sufficient sources of funding to maintain their activity throughout the period during which the action is being carried out or the year for which the grant is awarded and to participate in its funding. The 14

15 applicants' financial capacity will be assessed on the basis of the following supporting documents to be submitted with the application. All applicants and co-applicants have to submit the declaration on their honour, as well as the profit and loss account and the balance sheet for the last financial year for which the accounts were closed (cf. no. 10 of check list in annex). For newly created entities, the business plan might replace the above documents. The verification of financial capacity does not apply to public bodies Operational capacity Applicants and co-applicants must have the professional competencies as well as appropriate qualifications (relevant experience and expertise) necessary to complete the proposed work programme. In this respect, applicants have to submit: A written declaration attesting professional competencies and appropriate qualification of the team carrying out the activity proposed (cf. no 13 of check list in annex), Curriculum vitae of the project manager indicating clearly the current employer with whom there exists either a permanent or temporary contract of employment as well as the curriculum vitae or description of the profile of the people primarily responsible for managing and implementing the operation (cf. no 14 of check list in annex). References to related work or similar work undertaken over the past three years by the applicants, co-applicants, affiliated organisations or by experts that will be in charge of the action. Please identify for each project the objectives, location, results, organisation's role and degree of involvement, cost etc. (cf. no 15 of check list in annex). In addition, applicants have to submit the following documents in the annex of the online application and by post (cf. no 16 of check list in annex), depending on the strand they are applying for: Strand A: Establishment of social finance partnerships - No additional documents required Strand B: Establishment of social finance instruments and mechanisms - An investment strategy (specifying objectives, action plan, resources, risks/return profile etc. for the financial instrument to be established) agreed between the partners, - A sound (internal or external) feasibility assessment of the investment strategy, - An identification of an organisation that could potentially manage the financial instrument. These documents should not exceed characters in total. Strand C: Establishment of collaborative funding models for social enterprises 15

16 - A joint strategy (specifying objectives, action plan, collaboration fields and mechanisms etc.) for aligning resources and investments agreed between the partners, and its advantages over current approaches and practices. This document should not exceed characters in total. Strand D: Development of investment readiness support for social enterprises - A description of skills, experience and track record in investment readiness support of the applicants (and co-applicants, if applicable), - A description of the organisations (co-applicants, if applicable) providing access to capital (such as impact investment funds, angel investors or fund managers) the applicant intends to cooperate with, - Three references from social enterprises and at least one reference from a funder or investor which the applicant or the co-applicant has worked with on investment readiness within the last two years including details of the services provided, the investment targets and achievements. These documents should not exceed characters in total. 9. AWARD CRITERIA Eligible applications/projects will be assessed on the basis of the following criteria: - Relevance of the proposal to the call (25%). In this respect, the application should present how the proposed activities of the applicant organisation and/or co-applicants enlarge the size, extend the scope (by covering other Member States or regions) or complement the type of established services beyond the operations in the last years. - Quality of the proposal, including in terms of potential sustainability (30%) In this respect, proposals should include a description of the geographical coverage and the type of social enterprises targeted, activities, deliverables, milestones, assumptions, risks and how these will be managed, as well as an outline of alternative plans. o For the supply side (strands A, B, C) proposals should also include a description of the state of play regarding social finance supply (including stakeholder and problem analysis), potential demand (including assessment of potential demand and barriers to consolidate and scale). o For the demand side (strand D), proposals should include an assessment of barriers to securing impact investment, potential of social enterprises to innovate and grow, and of their investment needs, and description of the content of the proposed investment readiness programme for social enterprises, including the key services to be provided (as outlined in section 6.2 D above) and the methodology for their delivery. - Impact of the proposal (25%) In this respect, proposals should include a brief description of the envisaged results. - The cost / efficiency of the operation (20%). 16

17 With consideration of the budget available for this call for proposals, the proposals with the highest evaluation scores will be selected for award. Proposals with a total score of less than 65% of the maximum score will not be considered for award. 10. OTHER REQUIREMENTS - Participation in a platform for exchange of experience: the selected organisations have to participate in a platform for the exchange of experience. This will involve participation in four workshops as well as contributions to the common web-based learning platform to share the experience gained under this call. The costs of the participation of at least one participant for each organisation to the workshops should be included in the budget of the proposal (one night/workshop). The participants will be organisations supported under this call and other competent organisations. - Reporting: The selected organisations have to submit quarterly reports (in English) describing the activities undertaken, problems faced and how these were overcome, tools used, results achieved, learning needs, plans for the next steps. 11. DEFINITIONS Financial instrument Financial intermediary Investment readiness Social enterprise Social innovation Impact investment Financial product that may take the form of equity or quasi-equity investments, secured or unsecured loans, guarantees, or other risk-sharing instruments, grants and other type of participation in an enterprise A financial instrument of the European Union seeks to address specific policy objectives of the Union. A financial institution or contractual arrangement that facilitates the channelling of funds between savers/investors/lenders/donors to social enterprises in the form of financial instruments The capacity and capability of a social enterprise to seek and utilise investment. Key elements that help to make a social enterprise investment ready include effective leadership, business planning and strategy, methods and capability to articulate, measure, assure and report on social and environmental impact, risk assessment, quality management An undertaking, regardless of its legal form, which: has as its primary objective the achievement of measurable, positive social impacts rather than generating profit for its owners, members and shareholders uses its profits first and foremost to achieve its primary objective is managed in an entrepreneurial, accountable and transparent way, in particular by involving workers, customers and/or stakeholders affected by its business activities. The process of developing new (combinations of) approaches or practices for resolving societal challenges through mobilising civil society actors to further inclusive, socially fairer and environmentally sustainable economic development and social change. This includes re-designing and re-engineering business models and value chains, new relationships or collaborations between public, private and third sector organisations, and delivery mechanisms for public policies Financial activity which has an expectation of both a specified social outcome and an explicit financial return for its investors (usually below market-rate ). This could include a wide range of financial products. 17

18 12. LEGAL COMMITMENTS Successful applicants will receive two original copies of the grant agreement for acceptance and signature. Both these copies must be signed first by the beneficiary and then sent back to the Commission, which will then return one to the applicant once it has been signed by both parties. The grant agreement may include corrections and deletion of ineligibility costs or activities made by the Commission therefore the applicant should carefully read the whole agreement, and the budget and work programme sections in particular, before signing and returning the copies to the Commission. Please note that the award of a grant does not establish an entitlement for subsequent years. 13. PROCEDURE FOR THE SUBMISSION OF PROPOSALS Proposals must be submitted in accordance with the formal requirements and by the deadline set out under sections 3 and 5. Eligible organisations can apply for more than one activity under each of the four strands, and for more than one strand. No modification to the application is allowed once the deadline for submission has elapsed Electronic submission The compulsory on-line grant application form is an electronic form which must be filled by using the Internet Web system "SWIM" at the following internet address: This system allows the introduction, edition, validation, printing and submission of the grant application form. Once the application is submitted electronically, a print out of an exemplar has to be signed by the legal representative of the organization submitting the proposal and be sent to the Commission as per point 4.2. After submission of the application electronically no changes are possible. At the above quoted web site other requested forms, the financial guidelines for applicants and other useful documents can be found Submission on paper Please send your covering letter of application, together with all the documents listed in the checklist (annex to this document), as signed originals as well as one copy of all these documents (in total: 2 sets of documents), either: a) by post (date of postmark serving as proof of timely shipment) to the following address Call for proposals VP/2013/017 European Commission Employment, Social Affairs and Inclusion Directorate-General Unit EMPL-C.2 - J-27 06/062 18

19 or or 1049 Brussels Belgium b) by courier service (date of deposit slip serving as proof of timely shipment) to the following address Call for proposals VP/2013/017 European Commission Employment, Social Affairs and Inclusion Directorate-General Unit EMPL-C.2 - J-27 06/062 Service central de réception du courrier Avenue du Bourget, Brussels Belgium c) delivered by hand, in person or by an authorised representative (date of acknowledgement of receipt by the Commission service serving as proof for timely submission) to the following address Call for proposals VP/2013/017 European Commission Employment, Social Affairs and Inclusion Directorate-General Unit EMPL-C.2 - J-27 06/062 Service central de reception du courier Avenue du Bourget, Brussels Belgium In case of hand-delivery, please keep a receipt as proof of submission, signed and dated by the official in the Commission s central mail department who took delivery. This department is open from to from Monday to Thursday and from to on Friday; it is closed on Saturdays, Sundays and on Commission holidays. Please note that for security reasons, hand deliveries (including courier services) are not accepted in other Commission buildings. The European Commission will notify applicants once the evaluation procedure is completed. Requests for information concerning the progress of dossiers sent before the end of the evaluation procedure will not be answered. Applicants will be informed in writing about the results of the selection process. Unsuccessful applicants will receive a letter stating the reasons for refusal Presentation of applications Regarding the presentation of the application file, it is recommended to: - follow the order of documents as listed in the checklist in Annex; - print the documents double-sided, where possible; - use only 2-hole folders (please do not bind or glue). If an applicant submits more than one proposal, each one must be submitted separately. 19

20 13.4. Contacts Contacts between the awarding authority and potential applicants can only take place in certain circumstances and under the following conditions: a) Before the submission deadline At the request of the applicant, the Commission may provide information solely for the purpose of clarifying the nature of the call. Any requests for additional information must be made in writing by only to the address given below. Requests for additional information should reach the Commission at the latest 5 days before the deadline for submission. After this date, the Commission does neither commit to provide a timely answer nor to publish the corresponding information. The Commission may, on its own initiative, inform interested parties of any error, inaccuracy, omission or other clerical error in the text of the call for proposals. Any additional information including that referred to above will be published on the Internet in accordance with the various call for proposal-documents. b) After the submission deadline If clarifications or not substantial adjustments are requested or if obvious clerical errors in the proposal need to be corrected, the Commission may contact the applicant provided the terms of the proposal are not modified as a result. This is generally done by . It is entirely the responsibility of applicants to ensure that all contact information provided is accurate and functioning. In case of any change of contact details, please send an with the new contact details to EMPL-VP @ec.europa.eu. Contact address: EMPL-VP @ec.europa.eu 20