Resumo

Social enterprises are of great importance in meeting demands and needs that are not solved by governments. However, there are still difficulties in establishing and maintaining these enterprises because these businesses have limited access to financial institutions and need more funding sources. In addition, there are questions about the main funders, how the configuration of financial instruments relates to different investment logics (finance-first, impact-first) and about the conceptual portrait in approaches such as the Benefits Theory of Nonprofit Finance.

There is still potential for the field of social impact investing to grow and contribute to creating an impact of the same kind. However, this potential can only be realized if we better understand this topic (GLANZEL; SCHEUELE, 2015), including its sources, structure, and configuration. In this context, this study addressed the following problem: How are financial instruments configured for social enterprises? To answer this question, this study aimed to analyze the configuration of financial instruments for social enterprises through a theoretical essay with a systematic literature review.

Social impact investing refers to various alternative lending strategies and investment modalities for financing projects and ventures intended to generate positive social, environmental/sustainable development impacts and financial returns (RIZZI; PELLEGRINI; BATTAGLIA, 2018). It is the allocation of financial capital that, in addition to economic returns, aims to achieve social services and outcomes for individuals/communities with social-environmental needs (ARENA et al., 2016; VASYLCHUK; SLYUSARENKO; KOTANE, 2019).

Academic research has presented the sources about the financing of social enterprises but without an extended discussion of their characteristics, the way they are operationalized, and the configuration of available financial resources. Moreover, the issues raised in this theoretical essay show that the absence of a discussion of the financial instruments, demonstrates in various aspects the need for a model that portrays the process of financing social enterprises, for which the framework proposed is a first attempt.

The prevailing and determining logic in a given location tends to influence the mechanisms, characteristics, and financial instruments provided to social enterprises, whether in the form of the definition of the social issue, innovation, or target area (ARENA et al., 2016); risk distribution (TEKULA; ANDERSEN, 2018); loss tolerance and return periods (ROUNDY et al., 2017); selection mechanisms (DI LORENZO; SCARLATA, 2019); or even the requirements for fees, additional costs, revenue sources, and expansion of funds received (ASCHARI-LINCOLN; JÄGER, 2016).

ARENA, M. et al. Social impact bonds: Blockbuster or flash in a pan? International journal of public administration, v. 39, n. 12, p. 927–939, 2016. GLÄNZEL, G.; SCHEUERLE, T. Social impact investing in Germany: Current impediments from investors’ and social entrepreneurs’ perspectives. VOLUNTAS International Journal of Voluntary and Nonprofit Organizations, v. 27, n. 4, p. 1638–1668, 2016. DI LORENZO, F.; SCARLATA, M. Social enterprises, venture philanthropy and the alleviation of income inequality. Journal of business ethics, v. 159, n. 2, p. 307–323, 2019.