Context and problem(s) addressed
The province of Noord-Brabant in the Netherlands faced challenges in scaling up social entrepreneurship initiatives that addressed societal issues but struggled with securing growth capital, fitting their intergrated approach within the compartmentalised government structures, and receiving sufficient appreciation for creating multiple social values. These challenges hindered the ability of social entrepreneurs to make a broader impact.
Intervention and financing model
To tackle these three key issues, the provincial government of Noord-Brabant launched The Brabant Outcomes Fund (BOF) in 2018. The fund focused on selecting social enterprises that could scale up their impact while contributing to multiple policy domains, particularly those aligned with the SDGs.
The provincial government cooperated with three impact investors and signed outcomes contracts with four entrepreneurs who work on addressing important societal problems in the region of Noord-Brabant in the Netherlands.
One specific example of a successful intervention under the BOF is “Stichting Sarban de Toekomst”, which operates restaurants offering training and job opportunities to refugees facing challenges in accessing the labor market, contributing to SDG 8 (decent work for all) and SDG 10 (reduced inequalities). The business provided refugees with work experience and training, leading to over 80% of participants finding stable employment within six months. This intervention not only created jobs but also fostered social inclusion and empowerment.
Outcomes funds allow the funding of multiple SOC projects under one structure to accelerate growth, generate economies of scale and maximise learning.
Key outcomes (if applicable) and associated measurements
The emphasis in SOC is usually placed on outcomes that result in actual cost savings for the outcome payer. Such cost savings are relatively easy to measure objectively. However, in the BOF, cost saving was not the primary objective and outcomes that were not directly linked to savings were included as well. Consequently, other valuation methods were needed. In the BOF three different methods were used to determine the financial value of outcomes: 1) Cost-based pricing, 2) Valuation in accordance with market price and, 3) Valuation based on the opinion of the target group and/or stakeholders. If the agreed qualitative and quantitative results have been achieved, the provincial government will repay the working capital to the investors.
One specific example of a successful intervention under the BOF is Stichting Sarban de Toekomst, which operates restaurants offering training and job opportunities to refugees facing challenges in accessing the labor market. The business provided refugees with work experience and training, leading to over 80% of participants finding stable employment within six months. This intervention not only created jobs but also fostered social inclusion and empowerment, contributing to SDG 8 (decent work for all) and SDG 10 (reduced inequalities).
What made Brabant Outcomes Fund (BOF) unique compared to other Social Outcomes Contracting initiatives (SOC) is the way it included multiple values in the contracts. By this we mean that social values, such as empowerment and wellbeing, were an integral part of the contract alongside economic value.
In the first BOF, all 4 entrepreneurs achieved the agreed social results. Given this success, a second BOF initiative is being developed which aims for a total investment of 20 million euros through a combination of European, regional, public and private capital.