Le financement des entreprises sociales- une comparaison France-Californie : Accès aux fonds propres et aux financements moyen terme

Blazy, Clémentine (2011): Le financement des entreprises sociales- une comparaison France-Californie : Accès aux fonds propres et aux financements moyen terme.

Abstract

This paper aims at comparing French and Californian social businesses' financial structure and their access to equity and equity-like funding. The author finds from the study of an 800-French social businesses sample that these French organizations suffer from a lack of access to this type of capital. This puts them at risk in their early stages and makes it difficult to develop at a larger scale. As seen from France, the Californian social business sector seems more flourishing, and the access to equity funding a less acute issue. This paper tries to put this first impression to test and to know both institutionally and factually about social businesses in California, their financial structure depending upon their stages, and the type of financial tools they have (or don't have) access to. Although the social investors' community is much more numerous in California than in France, and that many major financial institutions and foundations have recently taken several decisive steps towards a highly structured "impact investing" market, the author identifies several nuances to be made. Among them, the fact that the french legal frame incentivizes the diversion from part of the flow of capital towards these businesses, whereas the american legal structure still refrains in part these types of investments. Moreover, the numerous social investors' community in California is also extremely scattered in their investment strategy, infringing in a way the flow of capital the social businesses can have access to: social investment is still a nascent field and entails today a wide scope of definitions, depending on the investor.

• Item Type: MPRA Paper
• English Title: Social businesses funding- France vs. California: Access to equity and equity-like capital
• Language: French
• Keywords: equity; long term; debt; ROI; social enterprise; social business; corporate finance; finance; impact investing; social investor; CRA; ERISA; Social Innovation Fund; institutional
• Subjects: M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M0 - General; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M13 - New Firms ; Startups

References

Bromberger, A. (2011, Spring). A new type of hybrid. Stanford Social Innovation Review

Cates, R., & Larson, C. (2010). Connecting CDFIs to the Socially Responsible Investor Community. Ford Foundation

Chertok, M., Hamaoui, J., & Jamison, E. (2008, Winter). The Funding Gap. Stanford Social Innovation Review

Direction Générale du Trésor et de la Politique Economique. (2007, Novembre). Le taux reduit d'impot sur les societes pour les PME. Lettre Treso-Eco

Emerson, J. (2003, Summer). The Blended Value Proposition: Integrating Social and Financial Returns. California Management Review

Emerson, J., & Spitzer, J. (2007). From Fragmentation to Function: Critical Concepts and Writings on Social Capital Markets' Structure, Operation, and Innovation. Oxford: Oxford Said Business School; The Skoll Centre for Social Entrepreneurship

Emerson, J., Freundlich, T., & Fruchterman, J. (2007). Nothing Ventured Nothing Gained, Addressing the Critical Gaps in Risk-Taking Capital for Social Enterprise. Oxford: Oxford Said Business School, The Skoll Centre for Social Entrepreneurship

F.B. Heron Foundation. (2009). Equity advancing equity

Freireich, J., & Fulton, K. (2009). Investing for Social and Environmental Impact: A Design for Catalyzing an Emerging Industry. Cambridge, MA: Monitor Institute

Gaillard, G., & Sermier, J.-M. (2011). Les modes de financement et de gouvernance des associations de protection de la nature et de l'environnement. Rapports d'information parlementaires de l'Assemblee Nationale

Givord, P., Picart, C., & Toutlemonde, F. (2008). La situation financière des entreprises : vue d'ensemble et situation relative des PME. Dossiers INSEE

Hebb, T. (2010). The role of Institutional Investors in Social Finance. Carleton University

Hope Consulting. (2010). Money for Good: The US Market for Impact Investments and Charitable Gifts From Individual Donors and Investors

John, R. (2006). Venture Philanthropy: the evolution of high engagement philanthropy in Europe. Oxford: Said Business School, The Skoll Centre for Social Entrepreneurship

Kassan, J. (2010). Reform of the US Securities Laws is Necessary for Impact Investing to Reach Full Potential. Cutting Edge Capital

Kerlin, J. (2010). A Comparative Analysis of the Global Emergence of Social Enterprise. Voluntas: International Journal of Voluntary and Nonprofit Organizations (Vol 21)

Le Labo de l'ESS. (2009). 50 propositions pour changer de cap

Lynch, K., & Walls, J. (2009). Mission, Inc.: The Practitioner's Guide to Social Enterprise. Berrett-Koehler Publ Inc

Observatoire National de l'Economie Sociale et Solidaire. (2009). Atlas 2009 de l'économie sociale et solidaire en France et dans les régions. Conseil National des Chambres Régionales de l'Economie Sociale (CNCRES)

Observatoire National de l'Economie Sociale et Solidaire. (2010). Panorama de l'économie sociale et solidaire en France et dans les régions. Conseil National des Chambres Régionales de l'Economie Sociale (CNCRES)

O'Donohoe, N., Leijonhufvud, C., Saltuk, Y., Bugg-Levine, A., & Brandenburg, M. (2010). Impact Investments: An emerging asset class. JP Morgan, Rockefeller Foundation, GIIN

Phills, J., Deiglmeier, K., & Miller, D. (2008, Fall). Rediscovering Social Innovation. Stanford Social Innovation Review

Shortall, J. (2009, Septembre). Introduction to Understanding and Accessing Social Investment

Tchernonog, V. (2007). Les associations : financement, emploi, travail bénévole, évolutions. Equipe Matisse, Centre d'économie de la Sorbonne, CNRS

The Center on Philanthropy at Indiana University. (2010). GivingUSA 2010 : The Annual Report on Philanthropy for the year 2009. Giving USA Foundation

Vercamer, F. (2010). Rapport parlementaire sur l'Economie Sociale et Solidaire