di Sofia Lai Amândio, EU senior expert in social innovation and impact evaluation, European Competence Centre for Social Innovation
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Europe is sitting on one of the biggest public pipelines of social innovation in the world, and most impact investors barely talk about it. ESF+, the European Social Fund Plus, is the EU’s main fund for jobs, skills and social inclusion, with more than €140 billion for 2021–2027 (including national co-financing).
It traces its roots to the original European Social Fund, created in 1957 under the Treaty of Rome, making it the oldest of the EU’s structural funds and, still today, its largest instrument dedicated specifically to social policy. In 2027, the fund turns 70. As of 2021, for the first time in its history, every EU member state must now use part of it to support social innovation.
That should matter to anyone looking for the next generation of scalable social solutions. But there is a catch: Europe is still trying to judge 21st-century social innovation with old reporting systems built for routine projects, not experimentation, learning and spread.
If that does not change, ESF+ risks becoming a giant factory for pilot projects that never travel, never attract follow-on capital and never reshape public systems. If it does change, ESF+ could become something much more interesting for a public pipeline of innovations that are easier to spot, assess and back.
A public pipeline hiding in plain sight
For years, impact investors have complained about a thin pipeline: not enough investment-ready social ventures, not enough evidence, not enough repeatable models. Europe already has a partial answer, but it is hidden inside public policy rather than venture ecosystems.
Under current EU rules, every country has to reserve at least one ESF+ priority for social innovation or social experimentation. That means hundreds of projects across employment, education, inclusion, childcare, disability, homelessness and local services are being tested with public money. The question is no longer whether Europe funds social innovation. It clearly does. The question is whether Europe can tell which ideas are worth growing.
Proof of concept in Portugal
Take Portugal. Portugal Social Innovation has already supported 698 projects and 481 organizations, and in the current cycle it has approved €84 million in public funding and mobilized €20 million in social investment. Its 2014–2020 program reached an estimated 1.4 million people and helped social-economy organizations build management, fundraising and impact-assessment capacity.
It also tested new ways of financing social outcomes: Social Impact Bonds tied repayment to agreed results in education, health and employment, while Partnerships for Impact brought municipalities, foundations, companies and other social investors into co-financing arrangements. The OECD points to pilots including online education tools and telemedicine services as practical examples of the new solutions that this infrastructure made possible.
The point is not that every project became investment-ready. It is that public policy built the conditions that investors repeatedly say they need: organizations with stronger capabilities, tested solutions, measurable outcomes and partnerships between public authorities, philanthropy and private capital.
Those outcomes matter because they are not generated by private capital alone. They are produced by public funding that absorbs early risk, strengthens delivery organizations and convenes investors around shared social goals.
In the new Portugal 2030 pipeline, examples range from Programa abem: Rede Solidária do Medicamento, which works to improve access to medicines for people in financial hardship, to Porto de Partida, a housing-first inclusion project in Porto, and Teach For Portugal’s leadership program. These are not yet proof that every model is ready for conventional investment. But they show a public system creating the projects, evidence, partnerships and risk-sharing mechanisms from which an investable pipeline can emerge.
Still, unless the evidence is clear and usable, this pipeline will stay stuck inside public administration instead of connecting to broader pools of catalytic and private capital.
The real problem is not too little data
At first glance, this looks like a measurement problem. Social innovation often aims to change things that are hard to count quickly: trust, confidence, cooperation, service quality, local capacity or the way institutions behave. Traditional reporting systems are much better at counting people served, workshops held or short-term outputs.
But the deeper problem is not just about data. It is about what the data are used for. Evidence becomes dangerous when it is used mainly to rank very different projects against each other, or when it rewards what is easiest to count rather than what matters most. In that world, organizations learn to manage for indicators, not for impact. They write better reports, but they do not necessarily solve harder problems.
That should sound familiar to impact investors. Private markets also struggle when impact reporting becomes a branding exercise instead of a way to make better capital allocation decisions. The same lesson applies here. If impact evidence does not help decide what to improve, what to stop and what to scale, then it is mostly paperwork.
What investors should want from ESF+
The answer is not to demand gold-plated evaluation for every project. That would slow experimentation and punish small innovators. The answer is to build a simpler and more honest system that tells funders, public and private alike, what kind of evidence each project really has.
Think of it as a three-step evidence ladder.
- First, basic proof: what the project did, who it reached and what early feedback shows.
- Second, proof of change: reasonable evidence that something improved for people, organizations or places.
- Third, proof of cause or spread: stronger evidence that the project caused the change, or that it can work in other settings too.
Not every project needs to reach the top step. But every project should say clearly which step it is on.
For impact investors, this matters because it turns a foggy pipeline into a more usable one. Early-stage grant funding can support Step 1 ideas. Catalytic and blended capital can engage with Step 2 models. Larger pools of capital can look more seriously at Step 3 models that show stronger evidence or repeatability.
That is much more useful than a world where everything is labeled “innovative,” everything claims “impact,” and nobody can tell what is actually ready to grow.
Why this matters now
This is not just a Brussels process story. Europe is deciding, right now, whether social innovation will become a permanent part of its policy and finance architecture or remain trapped in a cycle of pilots.
At present, the ESF Social Innovation+ initiative is backing transnational projects, national support centers and communities of practice with a €197 million budget. The European Commission has also launched a call for “impact intelligence” services to turn scattered impact reports into more usable analysis and benchmarks. France is using dedicated ESF+ social innovation funding to help scale proven employment and inclusion models through France Travail, while Sweden is using national calls to support transfer and ecosystem building.
This is exactly the moment for “Agents of Impact” to pay attention. Too often, impact investors treat public programs as background conditions rather than as partners in building markets. That is a mistake. ESF+ is not just a grant scheme. It is a public lab, pipeline and de-risking tool for social innovation across Europe.
The ask
For European policymakers, the task is clear: Stop treating social innovation like any other spending line. Use simpler and fairer evidence rules that help people learn what works, what fails and what is ready to spread.
For impact investors, foundations and catalytic funders, the task is just as clear: Stop ignoring this pipeline. Work with National Competence Centres, managing authorities and public programs to identify promising models, support stronger evidence and build routes from grant funding to blended and investment capital.
Europe does not need more pilot projects that end in reports. It needs clearer signals about which ideas are ready to grow — and more investors willing to act on those signals.
Sofia Lai Amândio is an EU senior expert in social innovation and impact evaluation at the European Competence Centre for Social Innovation.
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