Grants for social entrepreneurship from Development Finance Institution “Altum”
About this good practice
The activities for public benefit are not always profitable or financially sustainable, especially in the initial stages. For some enterprises it may take time to become financially stable. Thus, there is the need to strengthen social enterprises financially, to support their long-term sustainability and to improve their business competence.
In period 2018-2023 Latvian Ministry of Welfare (MoW) implemented ESF project Support for Social Entrepreneurship from which it allocated a certain amount for grants through Development Finance Institution «Altum ». The process was as follows :
“Altum” announced the call for applications. Grants were available in the amounts from 5000 EUR to 200 000 EUR and they could be used for starting social entrepreneurship or or social projects, or for development of existing social entrepreneurship. The main criteria for project ideas were financial viability and long-term sustainability. The applications could be submitted as long as funds were available. High-quality projects were awarded financing. Financing was issued in several installments. “Altum” monitored implementation and reviewed the reports on progress of implementation.
The grant scheme will be renewed in 2024.
Resources needed
The initiative was funded by the ESF. The financial resources reached 12.2 million EUR, of which 85% came from ESF, and 15% from the national budget of Latvia. The initiative engaged 5-6 persons (part-time) at Ministry of Welfare and 4-5 persons (part-time) at finance institution Altum.
Evidence of success
Financial support encouraged starting new social enterprises and continuing existing projects for public benefit. The scheme improved business competences of social entrepreneurs, as they received consultations from MoW and “Altum”. Refused applications could be improved and resubmitted.
In the period 2018-2023 “Altum” grants supported 204 successful social entrepreneurship projects for total of 12.2 million EUR. 168 legal entities (mostly social enterprises) implemented their projects.
Potential for learning or transfer
Availability of grants activates social entrepreneurship, motivates development of new entrepreneurship ideas, creation of new social enterprises. It makes social economy environment more dynamic.
As the the grant scheme in the period 2018-2023 proved success, the MoW, supported by other stakeholders, has decided to renew this financial support instrument in the new financing period. It is expected that the grants for development of social entrepreneurship will again become available in the 2nd half of 2024.
