Over the last years several new initiatives and funding opportunities have been established including new models, platforms aimed at increasing the availability of capital for social enterprises in Sweden.
Mikrofund West is one of the initiatives, a funding organization owned by civil society organizations focusing mainly on cooperatives and social enterprises. The fund can be seen a role model for micro financing initiatives that are expanding across Sweden. To date two initiatives exist; Micro Fund Z (Jämtland County) and Micro Fund East (Stockholm County). The funding for the micro funds comes from a combination of public and private organisations.
Recently, in December 2014, the business region of Gothenburg has decided to support Microfund west with 3 million Swedish Crowns. Other important channels for funding of the social enterprise sector are Regions and Municipalities. Leading the development is the Western region of Sweden and the region Skåne. Both have supported the sector through social investment funds.
Primarily they provide seed-capital and the funds are often directed to interventions for children and youth, but also to job creation and homelessness. At the moment there are no new grants one can apply for in the regions, but there are ongoing projects being financed. Among the municipalties Norrköping, Umeå and Ale are stand out as pioneers. According to a study by the Forum for Social Innovation 46 of the 290 municipalities have had some type of social investment funding in 2013.
There are also two social banks operating in Sweden, The JAK Bank and Ekobanken, focusing on businesses with a clear focus on social and ecological value creation. In addition, it’s worth knowing that these social banks together with Coompanion and the Association “Hela Sverige ska leva” incorporating more than 4,700 local development groups have initiated and promote the emergent micro-finance sector.
A recent phenomenon is also providing a new source of funding for social enterprise. Today, there are at least 4 available Swedish platforms. FundedByMe, Polstjärna, Crowdcube and Crowdculture.
Other Initiatives related to funding of the social enterprise landscape Impact Invest Scandinavia impact investor network in Sweden which connects promising social enterprises with impact investors.
Idéer för Livet, a project with its base in Skandia Insurance, provides seed money funding for projects related to youth and children. Since it started in 1987 it has funded more than 3,000 projects. (Alamaa, 2014) Uppstart Malmö is a foundation which has drawn investments from a number of private investors who have contributed around 30 million SEK in total.
Uppstart Malmö also supports entrepreneurs with its extensive network of partners and advisors. Hjärna Hjärta Cash provides seed-stage equity investments for for-profit social ventures. It also provides business development support.
Social impact bonds, which is a new approach for the public sector to attract financing from new sources (e.g. private foundations and investors). Only successful projects are paid for by the public sector meaning that the risk is transferred to other actors which in turn is thought to encourage innovative initiatives that otherwise would have difficulties in finding financing.
This instrument can be vital for a country like Sweden with a large welfare sector that needs new ways of financing and gives incentive to innovations. Public contracts in procurement sums up to 700 billion SEK yearly which says something of the potential.
However, today, a lot of social enterprises find it hard to enter the public service market due to the complex regulations. Making public procurement processes more accessible to smaller organizations and social enterprises will further their role in providing public services. (Alamaa, 2014)