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February 21st, 2017

Social Impact and the Financing Agency for Social Entrepreneurship (FASE)

Ashoka set up the Financing Agency for Social Entrepreneurship (FASE) in 2013 to bridge the gap between social enterprises and social impact investors, with a focus on the German social investment market, which was, at the time, relatively underdeveloped in comparison to the US. FASE has partnered with organisations such as the philanthropic foundations of Apax, BMW and Vodafone to invest in social enterprises such as Schmökerkisten UG, ROCK YOUR LIFE! and Streetfootballworld plus, while actively promoting the creation of social investment networks.

The initiative

Ashoka set up the Financing Agency for Social Entrepreneurship (FASE) "to bridge the gap between social enterprises and impact investors through investment readiness and transaction support; FASE was initiated [as] a support network for socially motivated organisations."[5] Its focus is primarily on social ipmact investing in Germany and German-speaking countries, although its influence has spread beyond those nations' borders. “FASE's objective is to support the development of an impact investment market that will enable more social enterprises to take on repayable finance. This helps to boost the supply of social finance through institution and capacity-building with philanthropic and commercial investors. It also contributes to developing and establishing feasible, suitable and reliable financial instruments.”[6]

Its mission is to close the financial gap. “The mission of FASE is to contribute to the transformation of the social finance market by overcoming one of the most pressing obstacles to the expansion of social innovation in Germany and Europe: the financing gap.”[7] It also aims to create a financial infrastructure for social innovation. "FASE assists social enterprises with outstanding concepts in finding significant growth capital that allows them to scale their businesses and their impacts on society."[8]

One of FASE's roles is to act as a broker between social enterprise and sources of funding and to facilitate partnerships. “They identify investors and financiers across the entire spectrum, ranging from private investors, family offices and foundations to social investors and banks... Through consulting, they enable social enterprises to finance significant growth steps across the often rigid boundaries between donors, investors and the public sector.”[9]

The challenge

Social entrepreneurship, based on the idea of social impact investing, has long been part the US philanthropy culture. However, in 2012 it was still relatively undeveloped in Europe. “According to the EVPA [The European Venture Philanthropy Association], EUR1 billion were invested in impact funds in Europe in 2012, out of which around EUR50 million went to Germany alone. In 2009, the Monitor Institute estimated the market size for impact investing at USD50 billion saw a potential for growth to USD500 billion by 2019. However, social entrepreneurship in Europe is still in a nascent stage, even if it continues to gain momentum.”[1]

The main obstacle to funding this form of social enterprise was the entrepreneurs' lack of access to capital.  “There are a number of challenges and opportunities in the European social finance market. The evolution of a social enterprise usually involves a diverse group of funders and supporters. Most social entrepreneurs, however, are not able to cover more than 75% of their operating costs with revenues. This situation creates a strong need for innovative financing strategies and calls for a more substantial number of dedicated impact investors.”[2]

There was a lack of cohesion and shared standards in the social investment market. "Although different types of actors were already operating in the social finance sector, there was almost no cooperation between them. Different suppliers of financing applied a broad range of mostly incoherent and unrelated eligibility criteria, return expectations, conditions for repayment, and requirements for accounting as well as reporting. As a result, social enterprises were usually quite lost between these different ‘financing planets' and did not manage to find appropriate financing to scale their social impact."[3]

This resulted in difficulties when trying to access funding from multiple sources in order to share risk. “Additionally, there was a lack of transparency. Social enterprises often face substantial difficulties when trying to develop an efficient mix of funding sources. In particular, this bottleneck applies to the critical segment of smaller deals (<EUR250,000) and risky development activities, for which risk-sharing is essential and hard to find. The absence of suitable platforms or market facilitators prevented a much-needed cooperation between investors, donors and public authorities.”[4]

The public impact

FASE's key achievements since its creation include the following:

  • "FASE has built an open pipeline of investment-ready social enterprises and already closed seven transactions between EUR100,000 and EUR500,000 and thereby channelled over EUR2 million investments into the social finance ecosystem.
  • "FASE has built a broad network of potential impact investors in Germany and beyond and has established the first social business angel club in Germany."[10]
  • “A deal-by-deal support from experts like FASE can be a very effective mechanism to channel hybrid capital to social enterprises in early stages of their growth. This approach has been successfully demonstrated in Germany and Austria with nine closed deals to date, bringing approximately EUR3 million in additional resources to the social finance ecosystem.
  • “Starting in early 2013, FASE has been successfully established as a new financial intermediary between social entrepreneurs and impact investors. Presently, it comprises a wide range of more than 100 social enterprises in various stages whose business models have been reviewed and filtered to meet the requirements of the target investor market.
  • "More than 200 interested parties (business angels, foundations, private investors, family offices, banks) form its network of active investors."[11]

Stakeholder engagement

FASE was established by Ashoka, which is the most important stakeholder in FASE. Ashoka's strong network has helped FASE win partners and projects. “With Ashoka as a strong partner, FASE continues to benefit from Ashoka's network of social entrepreneurs, pro bono partners and supporting sponsors.”[12]

FASE engages with its stakeholders and takes an active role in creating and extending entrepreneurial networks. “Since its inception, FASE participated in multiple conferences, workshops, panels, events and meetings, inside as well as outside the social finance sector. Until the end of 2014, the team attended more than 40 events and held approximately 20 workshops and speeches on major occasions such as Vision Summit, EVPA Annual Meeting, StifterTage, IBAN launch and several entrepreneur breakfast meetings.”[13]

Also, banks and investment funds provides investments to the organisation, making them important stakeholders. “Finally, several investments into FASE mandates came from banks, investment funds and social investors. These are mostly impact players that pioneered the market and represent a vital part of today's social finance scene.”[14]

Political commitment

FASE has no strong national political connections, tending to work more with the private sector. In Germany, FASE's main sphere of activity, the government has not made any significant interventions. “The federal government's involvement in the development of the German social impact investing market has been limited thus far. The Engagement Strategy and the resulting Multi-stakeholder Conference organised by the Federal Ministry of Family, Senior Citizens, Women and Youth (BMFSFJ) constituted a first step in anchoring the social entrepreneurship discourse at a national level, touching also on financing issues.”[15]

However, there has been far greater political commitment at the European level, through the European Union (EU):

  • "The EU has supported FASE with grants to pilot hybrid financing models during 2014/2015".[16]
  • “As part of our EU project, FASE designed seven hybrid financing models. All of them smartly combine the available instruments to exactly meet to the specific needs of the respective social enterprise”.[17]

Public confidence

FASE has no direct connection with the public, acting an entrepreneur in the classical sense, between the funders and the social enterprise organisations themselves. However, the EU project demonstrated the feasibility and benefits of an orchestrated approach, combining different types of funders and integrating a wide range of financial instruments into packages. "As a result, it has improved the availability and effectiveness of financial instruments for social enterprises by enabling a collaboration between investors, donors and public authorities. It has also encouraged more social enterprises to take on repayable finance in the future to develop and scale their business models."[18]

The testimonials of various social organisations, although selected to promote FASE, do indicate a grassroots belief in FASE's work:

  • “Through the great collaboration with FASE, we have managed to reach investment readiness in a short period of time and bring a great investor on board for Disability performance. The acquired growth capital has enabled us to build a sustainable organisation and to provide exciting opportunities for people with disabilities in the economy and society. (Gregor Demblin, Disability Performance)
  • “With FASE we have found the right investor for our Social Enterprise. Through the investment we can make our themed book-boxes known throughout Germany, so that more schools can benefit from our offer.” (Lisa Eineter, Schmökerkisten)
  • “Thanks to the support of FASE we were able to start our programme ROCK YOUR COMPANY! by April 2015. Seed funding will allow us to test our mentoring programme with more than 60 students from October 2015th. (Philip Idhe, ROCKYOURLIFE!)
  • “FASE helped us with the negotiations with investors and supported us with a lot of advice - an important assistance to set up our hybrid business model!” (Dr Frank Hoffmann, Discovering Hands) [19]

Clarity of objectives

FASE defined its objectives and mission clearly and has remained consistent since its inception in 2012. Moreover, it has been able to attract many potential investors from different ‘financing planets’ to meet its objectives. “FASE’s objective is to support the development of an impact investment market that will enable more social enterprises to take on repayable finance. This helped to boost the supply of social finance through institution and capacity building with philanthropic and commercial investors. It also contributed to developing and establishing feasible, suitable and reliable financial instruments.”[20]

Strength of evidence

During its creation, FASE was able to draw on Ashoka's 40 years of experience in partnering with enterprises that focused on social entrepreneurship and social innovation, as well as on the work of the organisation's "Ashoka fellows".


FASE gave due weight to the feasibility of its operations, especially in the financial domain:

  • “FASE engineered a long-term revenue sharing mechanism with an overall cap to the profits going to the investors. The new social business had found its early growth capital where no one had looked before.”[21]
  • “The financing agency was initiated and is currently carried by Ashoka - the first and leading organisation in support of social entrepreneurship worldwide.”[22]

It also took a clear view of the contractual issues relating to social entrepreneurship. “Legally binding constraints provide the strongest indication of commitment to social goals. FASE in Germany helps social entrepreneurs raise money and, in the financing contracts managed by FASE, clauses are included in order to prevent social mission drift.”[23]

See also Management below for the use of a tool for piloting and testing new funding models.


FASE has a core team of skilled and knowledgeable managers who have experienced the recent financial crisis and understand the entrepreneurial space in which they operate. "FASE has built a core team with Dr Markus Freiburg, Ellinor Dienst, Cecilia Bunnenberg, Christina Moehrle and a group of senior advisors... Additionally, it has put a strong network in place, ranging from partners who finance its activities (e.g., Apax Foundation, BMW Foundation and Herbert Quandt, a private family office) to pro bono partners who support [FASE] in realising its mission (e.g., Hogan Lovells, Latham & Watkins, Vodafone Foundation, and Kreditanstalt für Wiederaufbau)."[24]

FASE's managerial decision-making is supported by cutting-edge tools. “There is a typical process that FASE applies to all its transaction mandates. This process is especially important when piloting and testing new models due to the innovative and complex nature of these deals. Before choosing a mandate, FASE uses a specific, proprietary mechanism: the ‘4scoring tool'. It allows FASE to assess each potential mandate in a systematic way.”[25]


FASE places great emphasis on monitoring and evaluation of its projects, both to assess its social impact ("the social impact can be measured and documented, e.g., by SRS and social KPIs")[26] and to model its future work in the social investment sector:

  • “To have a better grasp of individual preferences of its more than 200 interested parties, the organisation compiled a structured database with the help of personal interviews and detailed investor information.”[27]
  • “It designed innovative, tailored financing models that address the specific needs of social entrepreneurs. These state-of-the-art instruments have been piloted with concrete financing projects and are able to smartly combine different types of investors and their individual profiles.”[28]
  • “FASE explored effective ways of designing, consolidating, sustaining and linking social finance cooperation models and financial instruments and tested them with concrete cases. In addition, key learnings were prepared to inject this knowledge into the sector and to share what worked well (or not), how and why.”[29]
  • “FASE worked with the following five social enterprises to test and pilot the cooperation models: (1) DisAbility Performance Social Enterprise GmbH, (2) Schmökerkisten UG, (3) ROCK YOUR LIFE! GmbH, (4) Streetfootballworld plus GmbH, and (5) bettervest GmbH."[30]


FASE was initiated by Ashoka, which is "the first and leading organization in support of social entrepreneurship worldwide".[31] FASE has worked proactively towards achieving its objective to support the development of an impact investment market that will enable more social enterprises to take on repayable finance. The EU has also supported this objective of FASE and provided grants to develop hybrid financing models for social enterprises: "the EU supports FASE with grants to pilot hybrid financing models".[32]

FASE has collaborated in events and workshops with organisations such as Vision Summit, EVPA Annual Meeting and StifterTage and tested its co-operation models with organisations such as DisAbility Performance Social Enterprise GmbH and Streetfootballworld plus (see Measurement above).


About Financing Agency for Social Entrepreneurship - FASE, European Venture Philanthropy Association (EVPA)


Creating Collaborative Funding Models for Social Enterprises, July 2015, FASE for the European Commission


FASE - Our Team, FASE


Financing Agency for Social Entrepreneurship: Germany, February 2016, OECD


Mapping The Social Impact Investing Market In Germany: An Overview of Opportunities in the Education Space, Anna Katharina Höchstädter and Prof Dr Barbara Scheck, June 2014, Impact Investing Policy Collaborative


Say Hello To Hybrid Finance, Felix Oldenburg, 1 August 2014, Forbes


Social Impact Investing: Financing Social Change, 27 January 2015, National Advisory Board, Germany


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