In cooperation with Equinox Consulting Ltd., an evaluation and impact assessment of measures supporting social enterprises in Hungary was prepared on behalf of the Ministry of Innovation and Technology (ITM).

The aim of the analysis was to assess the impact of measures to support social entrepreneurship. The experts focused on the measures implemented with EU funding in the 2007-2013 programming period and their results and impacts. They also paid particular attention to the evaluation of the progress and results of the 2014-2020 period.

The evaluation assessed the contribution of the funding instruments to the objectives of increasing employment and job creation. The evaluation also assessed the impact of aid on competitiveness, growth, growth potential improvement, investment performance and sustainability. The experts also examined the evolution of corporate governance practices and company balance sheets.

In summary, social enterprises that are supported have great difficulty in remaining competitive in a competitive market while focusing on their social objectives. They face ongoing challenges in building their entrepreneurial footprint, which not only requires a permanent human capital commitment, but also financial investment or significant liquid reserves to sustain and continue operations. The experts suggested the need for continued support for social enterprises, the creation of a legal environment with a clear definition of social enterprises and the development of a certification scheme. The development of a common methodology for measuring the social impact of investments and a long-term strategy to support social entrepreneurship would be beneficial. The development and long-term maintenance of a support framework that builds on each other should also be considered. The experts suggest that a permanent wage subsidy should be available to support the employment objective of social enterprises. Some social enterprises provide transit services for re-integration into the open labour market and funding for this should be secured in the future.

The report entitled “Evaluation of measures supporting social enterprises in Hungary” is available here in Hungarian. The executive summary is available in English as well.