Palestine's Social Entrepreneurship Landscape

BuildPalestine released their comprehensive report, titled 'Social Entrepreneurship Landscape in Palestine', to help draw attention both to the incredible efforts of social entrepreneurs, as well as to the considerable difficulties they face in doing what they do. While interest is definitely on the rise, more financial sustainability is needed to shift the needle in the right direction.

“The catastrophe in Gaza has led us to reflect on our role as a Palestinian organization committed to social impact and has given us a deeper perspective on the role of social entrepreneurship in enabling genuine progress in Palestine”, says the report. Social enterprises have not been spared during this difficult period for Palestine, with several team members and founders of BuildPalestine-supported SE’s having been injured or killed over the last year. Assets, equipment, raw materials and entire systems have been severly damaged and destroyed. As such, the situation is dire for many social entrepreneurs, specifically in the most heavily contested regions.

It makes it even more commendable that social entrepreneurs in Gaza “have demonstrated remarkable creativity and resourcefulness in developing solutions to pressing social and environmental issues, ranging from access to basic services to generating renewable energy”, according to the report. The report offers examples of social enterprises that have been active throughout, contributing to their local communities in different ways. There is Art to Heart, an art project dedicated to integrating people with disabilities or marginalized groups into society. Inash Al-Usra, a women-led organization, creates job opportunities for Palestinian women through a variety of income-generating projects. Or there’s the example of Flowless, a water technology solution that has expanded beyond the Palestinian market, ensuring working water networks in different countries.

While these enterprises offer great examples, it’s worth taking a moment of pause to reflect on the difficulty of their circumstances. We recommend reading through the entire report, but are happy to summarize some of the main points below.  

Challenges faced

One considerable handicap for Palestinian social entrepreneurs consists of a lack of clear framework and different legal barriers. Currently, social enterprises operate under various legal classifications, such as nonprofits, cooperatives, or even for-profit entities. This lack of a tailored legal environment complicates registration and limits access to support and adequate funding. Additionally, many Palestinian social entrepreneurs are dissatisfied with their existing legal classifications, as they often feel constrained by regulations that do not align with their social impact goals.

There is an identity element to this, too. Many social entrepreneurs identify their work as community projects rather than formal social enterprises. This lack of a unified identity for social entrepreneurship can restrict the sector's growth and reduce the visibility of these impactful ventures.

The lack of clear policy also contributes to another shared obstacle: financial constraints. Access to funding remains one of the most formidable barriers for social entrepreneurs in Palestine. Current financial support is primarily provided through international aid, which is often unsustainable and lacks the stability required for long-term growth. While international aid definitely flows in the direction of Palestine, there are also many documented instances of organisations pulling funds away from the region because of geopolitical scrutiny and sensitivity.

It's a sentiment echoed by Lama Amr, Executive Director at BuildPalestine. “Due to restrictions imposed by the occupation and high dependence on international aid, Palestinian changemakers lack the agency to build purposeful futures for their communities. That is why our theory of change focuses on empowering Palestinian social entrepreneurs through sustainable and innovative methods, moving beyond traditional aid.”

It's not an easy task. Other local financing options are few and far between, with banks and other financial institutions often hesitant to support hybrid business models that do not prioritize profit maximization. As a result, no less than 30 percent of Palestinian social entrepreneurs depend on grants, as well as their own personal savings. Needless to say, this situation inhibits their potential for growth while introducing severe financial risks for the entrepreneurs themselves.

Contributing to this difficulty in securing funding is a lack of impact measurement and management prowess. Many social entrepreneurs do not have access to the necessary knowledge and tools to conduct thorough impact assessments. As a result, there is often a disconnect between the impact these enterprises are creating and their ability to document and report it, which in turn affects their ability to attract support from donors and impact investors.

Finally, those social enterprises that do manage to secure funding, are exposed to a limited market. The relatively small market size within Palestine forces many social enterprises to look beyond national borders for growth. Logistical challenges, including restrictions on movement between the West Bank, Gaza, and occupied territories, hinder these expansion efforts.

Recommendations

The BuildPalestine report brings together different recommendations to help the social economy in Palestine take the next step. They span across different themes, including policy, market building, finance and cultural change. The recommendations are a call for more unity – to enroot social entrepreneurship in Palestinian culture and education, and as such, building a case for its legal recognition. Impact Europe has been helping, and will continue to assist, in enacting several of these recommendations. Throughout our EU-funded work in the Impact Together!-project, we have seen time and time again how resilient social entrepreneurs can be, and how much additionality they bring to these communities and regions that deal with geopolitical instability.

Want to help in Palestine? There is, perhaps, one recommendation you may be able to help with:

“To encourage and support the mobilization of sustainable funding for social enterprises from both the local and Palestinian diaspora in addition to Palestinian allies to reduce reliance on international aid”

If you are interested in contributing to this, do not hestitate to reach out to us, or to the BuildPalestine team directly.

For those attending Impact Week – you can learn more about the incredible work our partners do by attending our Breakfast in the Neighbourhood on November 27, from 10:00 - 12:00, or by attending the session Working with Social Entrepreneurs in Challenging Circumstances on November 28, from 17:45 - 19:00.