The World Bank Development Marketplace announced last week that it will create a funding platform designed to facilitate follow-on funding to social enterprises that it had previously chosen for seed funding. This platform, called the Development Marketplace Investment Platform, will help a “pilot group of 30 selected social enterprises that have received prize money from DM” to attain additional rounds of financing.
This initiative responds to a persistent gap in the funding cycle for social enterprise organizations. Social enterprises that have secured an initial round of funding from interested donors or by winning competitions consistently struggle to raise additional capital. Many die; in fact, most nonprofits close because they run out of money.
Echoing Green, a New York-based early-stage funder of social enterprises, has observed the same problem among the social enterprises that it funds. It has responded to this problem by urging some to pursue for-profit status and develop credible and sustainable revenue streams, and by creating an impact investment fund to generate additional funds for Echoing Green fellows and applicants.
Michael Belinsky 