Consistent with a broader trend across Europe, social entrepreneurs in Lithuania are finding it difficult to access financing and other forms of business support. This results in missed opportunities to create more social impact.

EIB’s Request

To address increasing societal challenges, such as labor participation and integration of newcomers, social innovation is becoming increasingly important in Lithuanian policy. Facilitating this social innovation requires social entrepreneurs, public authorities, investors, and other stakeholders to come together and collaborate effectively. Therefore, the European Investment Bank (EIB) has engaged Social Finance NL, in collaboration with Ernst & Young (EY) Czech Republic and EY Lithuania, to conduct a feasibility study on Social Outcomes Contracts in Lithuania. Through this study, the EIB aims to further develop and strengthen the social finance ecosystem. This initiative stems from a joint effort by the EIB Group and EIB Advisory Hub to further promote social outcomes contracts across Europe.

The SFNL Approach

Social Finance NL leveraged its knowledge and expertise primarily to develop a social innovation pilot project in close collaboration with EY Czech Republic and EY Lithuania, utilizing outcomes-based financing. After considering a variety of societal issues for which outcomes-based finance can make a difference, SFNL together with the Lithuanian Ministry of Social Security and Labour designed a Social Impact Bond pilot focused on youth who have left or are leaving youth care.

Result

The outcome of this feasibility study included, first, an overview of the possibilities for governments and investors to finance societal outcomes in a different way. Second, we developed a proposal for a potential Social Impact Bond. This proposal outlined the intended outcomes and included a business case. Additionally, it described how these outcomes are linked to payments and detailed the procurement opportunities for a Social Impact Bond.

Collaboration

“The support from Social Finance NL was very useful in progressing our work, and we enjoyed working together with this team. We are now using the SOC design study in different fields seeking to present possible ways to improve youth policy in Lithuania.” – Jonas Laniauskas, director of Youth Affairs Agency at the Lithuanian Ministry of Social Security and Labour 

Photo by Scott Graham