Pedro da Silva Carvalho is the CEO of Finance for Social Impact, a startup recently created with the main objective of structuring major social impact projects, and their funding model.
Which were the main reasons that made you apply this project to the European Commission call “Supporting the demand and supply side of the market for social enterprise finance”?
We found it potentially very interesting. FSI was created based on the diagnosis that there is a huge need for financing social initiatives in Portugal. Specifically, there is a systematic lack of critical mass in the initiatives on the one hand, on the other none of the most innovative initiatives abroad was finding eco in Portugal. One of our ambitions, in our mission, is to help contribute to the increase of efficiency (economic and other) in the financing process.
Moreover this project – for being innovative and raising questions connected with investment – appealed to FSI skills, namely financial knowhow that is central to this project. We also understand that having TESE as project partner means we have access to a unique knowhow in the social market, which will be very useful for the implementation of this project, as well as its follow-up.
What are your expectations regarding the project results?
Expectations… formally the project objective is to celebrate an agreement between investors, essentially. The issue is that an investor agreement per se does not make sense. In a broader sense, this project has to do with the creation of a market, the social enterprises market. Today, this market doesn’t exist if we use a purely quantitative definition.
But the potential exists, and it seems that a will also. The point is to learn from other countries, the French and the English that have gone through the same journey 10 years ago. The potential that exists is all social sector entities (not to be confused with social enterprises) that can have all the conditions in order to become social enterprises. It’s necessary that they wake up to this fact. But even if they want there are difficulties: both legal and institutional. None of the measures that were instrumental in the explosion of these markets in France or United Kingdom exists in Portugal, in practice.
One of the issues we have to overcome is the lack of critical mass initiatives in Portugal, unlike what we see abroad. To change this it’s necessary that the government assumes it, the desire to focus on investment, giving conditions for social investments to have return in order to attract new players to the market. And to transform part of philanthropy in investment, even in grants, for example for projects at startup phase. And then the formal agreement that we want to celebrate ceases to be an isolated initiative. And in this case in can make sense.