Social finance has emerged as a significant public policy priority in many European Union (EU) member states as they seek to support collectively-owned social enterprises addressing societal challenges. It is widely accepted that success in these endeavours “depends on the existence of a solid social finance ecosystem” (European Investment Bank 2020). This ecosystem is understood to comprise policymakers from municipal, regional and national levels, as well as social enterprises, social enterprise representative bodies, higher education institutions, social lending organisations and intermediaries.

In recent years a significant number of EU member states have been engaged in social finance pilot projects as proofs of concept. Ireland has been a laggard in this regard and successive governments have failed to provide and appropriate framework for social enterprises. That only changed in 2019 with the launch of the first National Social Enterprise Policy 2019-2022. The policy explicitly named access to appropriate financial instruments as a key challenge for Irish social enterprises as there is no tailored financial instrument or specific statutory budget that fits the needs of the growing social enterprise market. Moreover, there is a recognised lack of investment readiness among social enterprises.

It was with this key tension in mind that a team of DCU researchers set out to examine this issue in an Irish context, and to take steps to develop a social-finance eco-system in the country. The Hybrid Social Finance Initiative is a collaboration between Prof Deiric O'Broin and Dr Paula Dolan from DCU's School of Law and Government. DCU was the research lead in a consortium featuring Rethink Ireland and Community Finance Ireland.

The project aimed to do this in two ways: to contribute to the development of the social finance sector in Ireland by developing financial instruments for social enterprises; and to support the wide range of social enterprise organisations working within any area that falls under the current government definition mentioned above. At present, there is no tailored financial instrument or specific statutory budget that fits the needs of the growing social enterprise market. Moreover, there is a lack of investment readiness among social enterprises. This project sought to address these challenges through a participatory approach beginning at the research phase and continuing throughout the project implementation.

The research progressed along the following timeline:

• A systematic literature review that included the research team engaging closely with project's thirteen European partners in this process to calibrate initial findings on a quarterly basis;
• Regular briefings to the relevant policy unit in the Department of Rural and Community Development; 
• A substantial user-led/participatory research component, including (a) a preliminary research workshop with the Social Enterprise Committee of the Irish Local Development Network, (b) a survey distributed nationally by national representative networks, local development organisations, social lending organisations and local authorities and the Department of Rural and Community Development, (c) four participatory research workshops where the recommendations were "field tested" by social enterprises, (d) a dissemination roadshow with five events  (Dublin, Cork, Donegal, Galway and online) where the key findings were outlined, and (e) a research dissemination event in Buswell's Hotel. The workshops, roadshow and dissemination event highlighted the research team's findings, i.e., trends, challenges, gaps etc. and a number of model financial instruments, identified with key stakeholders in the social enterprise sector, including existing and potential social finance providers; public policy makers at local, regional and national levels; social enterprise representative networks; and social enterprises. The feedback from these workshops and events contributed to the development of the Hybrid Social Finance Loan;
• The proposed financial instrument was also detailed at the Department's National Social Enterprise Conference in November 2022 prior the formal launch and research dissemination event.
•  A launch and research dissemination event on the Central Bank of Ireland which detailed the key elements of the Hybrid Social Finance Loan.

Building on the DCU research team's findings, the project partners, Rethink Ireland, Community Finance Ireland and Dublin City University, developed a blended social finance model (Hybrid Social Finance Loan) which includes the following elements:

• Non-repayable loan, which will be tied to agreed performance milestones;
• Non-financial supports, tailored to the needs of the organisation, to improve its investment readiness, develop its capacities and create social impact;
• Accelerator programme providing training in four core areas: impact management; communications; sustainability and strategy; and equality, diversity and inclusion;
• Continuous support focusing on building capacity and resilience in the first two years.