The 2020 Investing For Impact Survey: How social investors support positive societal change

Brussels, 25 February 2021 – The European Venture Philanthropy Association (EVPA) has released key data on social impact investment in Europe. The results of its 2020 Industry Survey show how investors for impact are supporting organisations (social enterprises, NGOs, etc.), both financially and non-financially, to achieve positive change in society. The Survey asked investors about the amounts they deploy, the financial instruments they use, the sectors they support, and the impact strategies they implement. EVPA analysed the practices of over 100 European practitioners, such as impact funds, foundations and engaged grant-makers, financial institutions, crowdfunding platforms, incubators and accelerators.

The results of the Industry Survey show a growing trend towards the support of social purpose organisations (SPOs) with investors for impact deploying more than €6 billion in the field in 2019, with €11.3 million on average. More than two thirds of organisations investing forimpact (68%) reported an average deal-size of less than €500k, and investments into SPOs with potentially financially sustainable and/or possibly self-sustainable business models (69%). Both results show that investors for impact are crucial to test societal solutions in their early days, taking risks that most others are not prepared to take.

For the second time in a row, debt is the most used form of capital (44%) to support SPOs on an average timespan from 2 to 6 years, showing a relevant involvement of financial institutions giving loans for impact within the ecosystem. As expected, equity (30%) remains the most “patient” form of capital. Half of these resources were deployed within Western Europe, including 6% invested cross-border. However, investments in Central & Eastern Europe increased significantly, reaching 16% of the total amount invested by respondents; it was only 2% in 2013. This is an encouraging trend that confirms the crucial role EVPA and the CEE social investment taskforce are playing to mobilise resources in this region since 2014. The remaining 25% was invested outside Europe.

The survey highlights that investors for impact consider impact measurement and management (IMM) a fundamental part of their strategy, with 81% seeking to measure the positive outcomes of their investees’ activities. At the same time, they work to strengthen investees’ capacity by helping them implement such an IMM system, mainly during start-up stages.

In terms of the sectors covered and the sustainable development goals (SDGs) targeted, investors for impact primarily focus on under-capitalised areas and sectors, such as “end poverty – SDG 1”, “reduced inequalities – SDG 10” and “quality education – SDG 4”. It is interesting to see how investors for impact complement the impact investment strategiesof larger funds investing with impact, by supporting different sectors and SDGs.

Furthermore, putting in practice principles of the EVPA Charter of Investors for Impact relating to the importance of collaboration and mobilisation of resources, more than a third of investors forimpact (36%) engaged in at least an outcome-based mechanism, such as Social Impact Bonds or Development Impact Bonds; and the majority (87%) co-invested at least once in 2019, with almost all (95%) engaging in other forms of partnerships.

“This survey provides key insights into the investing for impact trends and practices, confirming the critical role it plays in targeting under-resourced societal challenges”, said Roberta Bosurgi, CEO of EVPA. “I am also excited to see the relevance of the Charter of Investors for Impact confirmed, and how the 400 practitioners that endorsed it so far are shaping social investment practices. I want to personally thank all the organisations that embraced the principle of transparency and shared their data with EVPA’’

For more information, please contact Jorgos Papadakis, Marketing and Communications Director

Supplementary data:

1. Infographics with snapshots on the impact ecosystem and the new interactive report are available here: https://evpa.eu.com/knowledge-centre/publications/the-2020-investing-for-impact-survey.
2. You may watch the webinar with the presetation and the key findings of the Industry Survey here: https://evpa.eu.com/events/event/2021-02-24-venturing-societal-solutions-the-2020-investing-for-impact-survey/