Keywords

1 Introduction

This paper intends to investigate the new forms of financing that have been the protagonists of rapid growth in recent years characterized by an unexpected shock that has hit the world economy, namely Covid-19.

In Italy, since the beginning of the pandemic, there has been a severe phase of economic recession (with a contraction of 12.8% of the gross domestic product), [1] a fall in employment (−841 thousand employed compared to 2019), and a more significant climate of mistrust towards the search for job opportunities that causes an increase in inactive people. In this scenario, the pandemic has widened inequalities, increased poverty, weakening the welfare systems. New forms of poverty emerged, just as happened after the financial crisis of 2008. The difference from the previous shock is that at the end of 2019, the poverty level is significantly higher. For the first time, the “new poor,” i.e., those experiencing material deprivation, have increased by over ten percentage points (from 31% to 45%). They are almost 450 thousand people. These include families with minors, women, working-age people, odd jobs, employees, and precarious workers. The year before the pandemic outbreak, ISTAT data [2] show that the absolute poor are 7.7% of the population (4.6 million). The weakest group are the families in the South, particularly the larger ones with five or more members, those with minor children, the families of foreigners, and the less educated and the under 34 years old. Data from the Bank of Italy show that in April-May 2020, 15% of Italian families reported a decrease in their income of more than 50%. These percentages increase dramatically for the self-employed category (80%).

Covid-19 has widened inequalities, increased poverty, weakening the welfare systems. The effects of Covid-19may hinder the achievement of the Social Development Goals (SDGs) of the 2030 Agenda [3].

Furthermore, Covid-19 is modifying the allocation of private and public funds toward the healthcare, financial inclusion, and food security sectors.

In this scenario, the models and tools of Impact Investing can address complex needs, both related to the health sector and connected to social projects combatting poverty and social exclusion.

To allow greater dissemination of these financial instruments, the Global Impact Investing Network (GIIN) published a roadmap for the future of Impact investing, identifying 18 actions referring to six areas:

  • Strengthen the identity of impact investing;

  • Change the paradigm that governs investment behavior and expectations;

  • Extend products with a social impact;

  • Design tools and services that support the incorporation of impact into the analysis, allocation, and deal-making activities of investors;

  • Improve training via targeted professional education;

  • Introduce policies and regulations that both remove barriers and incentivize impact investments.

In May 2020. GIIN and the R3 Coalition, the Response Recovery and Resilience Investment Coalition have facilitated new initiatives for the development of Impact investing,

The main networks in this market collaborate with the initiative, such as Aspen Network, a nexus of the organization (ANDE, AVPN, B Lab, Confluence Philanthropy, EDFI, US Impact Investing Alliance).

Several authors [4,5,6,7,8,9,10]) use the terms such as “finance for social impact,” “impact finance”, “impact investing”, “sustainable finance”, “social finance”, “impact revolution”, “green finance” to indicate these instruments, financial alternatives to traditional bank credit.

Impact investing, starting at a meeting of the Rockefeller Foundation in 2007, represents a challenge that involves various players in the economic system and not just financial intermediaries. It requires adopting new tools, activities, models, and intermediaries [11].

Impact investing represents an innovative way through which the financial systems support the sustainable development of the economy, with particular attention to the even complex needs of operators and individuals. Even according to Global Impact Investing Network (GIIN)Footnote 1 - proposes the following definition of Impact investing: investments in companies, organizations, and funds made to generate a measurable social and environmental impact and capable, at the same time, of producing a return economic for investors. Therefore, this new approach to finance offers financial solutions (with returns in line with or below market returns) to social and environmental problems/needs. The social impact is present in Italy. For example, Social Impact Italian’s investment is a new platform of CDP (Cassa Depositi e Prestiti) to stimulate innovative business initiatives.

According to the Italian Report of the G8 Social Impact Investment Task Force [12] (2014), Impact investing: “supports investments linked to measurable social objectives capable, at the same time, of generating an economic return for investors. Social impact finance actively places financial resources in projects, companies, and investment funds that generate social benefits compatible with the economic return to be ensured for the investor”.

All the studies that investigate finance for social impact highlight two features that unite the various financial products within this financial sector (see Fig. 1):

  • The purpose of achieving a social (and environmental) impact related to the expectation of the financial return for investors

  • The measurement of the social, economic, and environmental impact by recalling the concepts of accounting and transparency

Fig. 1.
figure 1

Adapted: Trotta [13]

The financial scheme for social Impact.

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This contribution presents a structure divided into three sections. The first paragraph proposes a short literature review to provide a conceptual framework of the distinctive features of social impact finance compared with the already known forms of financing. The second paragraph focuses on a particular financial product: the social impact bonds (SBIs). SIBs are an innovative financing mechanism in which governments or other authorities enter into agreements with social service providers, such as social enterprises or nonprofit organizations, and investors to pay for the delivery of pre-defined social outcomes. The third paragraph intends to propose a potential use of social impact bonds to foster local development via specific stakeholders, centered on the logic of the Quintuple Helix [14]. The real connection between financing, long-term return, and outcomes of local sustainability indicates new ways for a new form of capitalism.

2 Finance for the Social Impact in Scientific Debate and the Future Challenges for Its Development

2.1 A Short Review

Porter and Kramer [15] emphasize the greater complexity of social impact finance. They define Impact investing as an approach to finance that aims to achieve financial and broader objectives according to a shared logic value.

Impact finance has specific characteristics [16] that differentiate it from traditional financing

  1. 1.

    forms and mainly produce and measure social Impact;

  2. 2.

    with an adequate return.

In this regard, Gimpel [17] emphasizes the importance of finance and the intention to achieve a social impact that differentiates them from traditional finance and, therefore, the need to review conventional classic financial theories. These financial innovations draw much inspiration from behavioral finance, representing a different economic modus operandi to the neoclassical approach.

For other authors [4, 18, 19], the definitions of Impact investing focus on two elements such as the “financial return” and the “non-financial return.”

The complete implementation of social innovation projects, thanks to the availability of financial resources conveyed through the products/instruments of social impact finance, would allow for a “democratization of finance” and, therefore, a more equitable society [5].

Loagarde-Segot [20], Carè, et al. [10] The Manifesto “From Crisis to viability: Finance reconsidered” has indicated a post-crisis financial movement focused on the necessary intertwining between real economy and finance for environmental and social well-being.

According to multi-stakeholder criteria, Rizzello, Migliazza, and Carè [4] identify four common aspects: sustainable finance, impact entrepreneurship, public policy in the social sector, and a new cooperative approach to creating public-private partnerships.

Jackson [21], Joy and Shields [22], Berzin, Pitt-Catsouphes, and Peterson [23] underline the need to initiate partnership forms between different local players. According to these authors, to successfully implement projects oriented to social needs, it is necessary to enhance the synergies and partnerships between stakeholders operating in public, private, and nonprofit sectors. Logic-based financing schemes are the base of these forms of cooperation. With achieved results in social projects, the capital invested acquires the projected payoff. This different view suggests a revision of the traditional financial theories. [5, 24].

The development of impact finance represents a challenge for all operators. The financial sector should be more aware of the need for social capital, while on the demand side, the private and public actors need better skills and capacity to capture project sustainability. Salamon [25] uses the expression “Big Bang,” Cohen [26] speaks of “impact revolution.” Walker Kibsey and Crichton [27] affirm how impact financing is a “revolutionary way.”

JP Morgan [6], Clarkin and Cangioni [7], Alijiani and Karyotis [8] underline how impact investing must determine a positive effect, unlike what happens in the case of socially responsible investments (SRI), where the logic is to minimize assets that produce a negative impact. Both financial approaches adopt the long-term vision of cooperation and trust rather than individualistic behavior. Weber and Duan [9] and Carè et al. [10] highlight the focus on positive results in promoting sustainable development circuits for society. However, these authors define impact finance as a new form of social finance, and Phillips and Johnson [28] define social impact finance using the expression Green Finance.

Social Impact Bonds (SIBs) have attracted much attention after the last financial crisis. The post-Covid-19 scenario seems to be an attractive proposition for financing the delivery of social services.

2.2 The Future Development of Impact Finance

This section of the work proposes a reflection on the main challenges that all the players involved in the impact finance market will have to follow to allow for more rapid development of this different approach to finance.

These challenges will involve both the supply and demand sides, the orientations of financial intermediaries, and the environmental context in which the social innovation projects are financed.

Some challenges make the country’s entire environment unattractive for developing IIS (see Fig. 2). A first criticality is undoubtedly the government’s lack of attention to the SII. Most EU countries do not have comprehensive national strategies presenting SII guidelines and objectives in their countries. The lack of strategies explains the occasional nature of policies in favour of the growth of SII. The second general challenge is the lack of a unified and precise definition of SII. For example, the monitoring of the SII market appears increasingly tricky and increasingly frequent not to fully grasp the benefits of the SII because investments that satisfy the logic of the SII are confused with other types of investments. The final problem is that some providers have started labelling their products as SII products due to tighter regulations on sustainable investment criteria, even though their funding sources do not adhere to SII standards.

The legislation adopted in the various countries does not provide an unambiguous definition of the actors on the demand side. For example, there is a wide heterogeneity between the meanings of social enterprises in the EU Member States. In addition, most EU Member States lack a specific policy framework to support the development of social enterprises. Furthermore, 10 of 27 EU Member States have not introduced any specific organizational legislation to recognize and regulate social enterprise activity. Other regulatory barriers harm the supply of funds. Some regulatory obstacles prevent the mobilization of private funds toward impact investments. Finally, impact measurement methodologies are underdeveloped in most EU Member States.

Furthermore, there is no consistent, standardized approach to measuring Impact. Outputs (activities) rather than results are at the base of impact measurement systems.

On the supply side, there is still an overall funding gap for SII in Europe. This gap exists because private investors primarily attribute transaction costs and risks to higher SIIs than traditional commercial investments. For this reason, these entities will make their capital available to finance social innovation projects only in the presence of adequate guarantees. The implementation of the IIS is still in the infantry phase. Therefore, the demand for project funding cannot be satisfied. Another critical issue on the supply side is the scarce presence of investors who have significant funds. One area for growth to be further developed is the role of institutional investors (including pension funds) in directing existing funds toward Impact investing.

The demand-side challenges in Europe are even more daunting. Few beneficiaries can receive SII investments. There is a lack of social enterprises. The legal status of social enterprises varies from country to country, leading to the exclusion of many who could receive SII. Third, many social enterprises and demand-side actors have limited organizational capacity to receive SII.

Effective intermediaries can help overcome many obstacles to developing the SII market. They can create liquidity, reduce risk, lower transaction and information costs, and facilitate payment mechanisms’. The success of the SII market relies significantly on the capacity of financial intermediaries ‘to sustain long-term projects by minimizing the cost of running them.’

Fig. 2.
figure 2

Source: European Parliament [29]

The challenges to the development of the SII market.

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After framing the issue of impact finance, two examples of impact finance in Italy are the Social Impact Bonds and the Social Innovation Fund.

3 Social Impact Bonds and the Social Innovation Fund: Two Examples of Financing for Social Innovation Projects

3.1 SIBs

The Social Impact Bond (SIBs) is a particular example of an impact finance product that shares the operating mechanism of the “Payment for Results” (PFR) or Pay for Success (PFS) type with other contractual forms), which are well-known in the USA. The return for the investor is the positive impact generated by social activity. The SIBs are not bonds strictu sensu. In financial terms, they are future contracts on social outcomes. Bonds, equity, or hybrid financial instruments can finance a SIB in which the term bond indicates the link between the investment and the social Impact.

Social Finance UK was the first intermediary to create a SIB, which defines this financial product as an agreement between the various stakeholders and the Public Administration (PA).

Social impact bonds are justified because PA cannot manage social problems with preventive actions due to the scarcity of resources. Third-sector operators could play a key role in overcoming these difficulties of the public administration. Social enterprises and nonprofit organizations can demonstrate substantial experience in this financial sector.

The PA, interested in improving its service and reducing its costs, verifies the potential of these preventive interventions as alternative welfare methods and estimates the savings that would ensue if implemented at a specific scale.

The idea is that preventive services can be more effective and efficient than traditional care programs, usually based on interventions carried out only ex-post in response to an emergency or social hardship. The consequent saving of resources can be the leverage to align the interests of investors, administration, intermediaries, and service providers.

The SIB provides a partnership between different actors, sanctioned by bilateral contracts, and raises private capital to promote innovative public policies.

The essential elements of its structure are the following:

  • a program of social interventions capable of generating a social impact (outcome) and saving on public spending;

  • a loan/loan with repayment of capital and remuneration only in case of success of the Program.

Barclay and Simons [30] define the SIB: as “a contract with the public administration, in which the latter undertakes to make a payment for the improvement of social results. Based on this contract, resources are collected from socially oriented investors. This investment is a mix of interventions that aim to improve social results. The goal’s achievement is the requisites for investors to receive public financing. The return is commensurate with the degree of improvements obtained”.

Mulgan et al. [31] define the SIB as a new financial model:

  1. 1)

    Channeling resources from the financial system towards social issues,

  2. 2)

    Favoring an expansion of overall resources (public and private) in favor of welfare,

  3. 3)

    Transferring risks from the public sector to financial operators more capable of assessing and managing the risks associated with these instruments.

PIRU [32] identified three distinct social impact bond models: 1) Direct Provider, 2) SIBs with SPV, and 3) Social Investment Partnership (SIP). In the first model, investors directly financed the project, directing the financial resources to the provider. The supplier has a central role and manages an ample variety of risks.

The Special Purpose Vehicle (SPV) receives the investments and counterparty in the various contracts. The objective of this second model is to isolate risks and reduce information asymmetries between the parties, defining SIBs with an intermediary or SIBs managed by funds [33,34,35]. In this case, an intermediary intervenes between the SPV and the service providers. Based on a management agreement (a contract not included in the first model). The “Social Investment Partnership” model envisages the involvement of specialized operators (social enterprises, nonprofit organizations) capable of carrying out the project in the best possible way.

It emerges that the SIB is a sophisticated financial instrument; not created to encourage speculation but capable of creating a new social innovation framework. The complexity of the SIB lies in the network of relationships between stakeholders. An important proxy variable of the network is the Trust, which, together with the usual financial risk of investment, constitutes the total return of the investment.

The constituent of the SIB is the Social innovation performance. The investor does not bet on the random trend of a specific value (share, currency) but on the ability to generate social and economic value. The standard structure of the SIB foresees the interaction between five subjects (see Fig. 3):

  • Public Administration (local, regional, national authorities);

  • Service providers (typically nonprofit organizations);

  • Corporate investors;

  • Specialized intermediary;

  • Independent evaluator who certified the outcome achieved.

Fig. 3.
figure 3

Source: OECD [36]

The structure of social impact bonds.

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The intermediary plays the role of promoter of the SIB with the PA and other actors. The PA and the intermediary contract provide a payment conditional on achieving specific objectives. Suppose the funded program does not reach the goal. In that case, costs for the administration do not incur. Social service providers use the capital from investors to implement the program and, in part, used for management and evaluation costs borne by the intermediary. The service provider that implements the service is not required to incur additional fees if the social project does not achieve the expected results. In practice, it assumes an obligation of means and not of results. The operating mechanism of the SIBs allows us to highlight some advantages and shortcomings.

Among the advantages, the transfer of the risk of failure to the private investor allows the public sector not to expose itself and not compromise the relationship with taxpayers due to inefficient public spending. Administrations can guarantee the possibility of experimenting with innovative tools compared to traditional intervention strategies without assuming the risk of failure. The promoter must have in-depth knowledge of the social issues to intervene and build a SIB partnership. A solid actor-network is at the base of a Sibs’ capacity to limit information asymmetries and facilitate investment in social activities. These actors must also include third sector entities (social enterprises and nonprofit organizations) sufficiently structured, with experience in providing preventive interventions and innovative services.

The success of social impact bonds requires the definition of a program well supported by a clear identification of the target population, large enough to generate meaningful results. The selection of the beneficiaries must also be compatible with the methodology used to evaluate the results. In any case, there must be a reliable system for measuring the results achieved.

A further condition for implementing a SIB is the existence of a PA determined to tackle social problems with new tools and a long-term programming orientation, independent from a short-term political cycle.

The main benefit of using SIBs is that the total cost of the service provided by social enterprises or nonprofit organizations must be lower than the PA’s savings from the reduction in spending on existing programs.

The market of impact finance, particularly social impact bonds in the EU, has been the protagonist of consistent growth in recent years by exploiting its peculiar characteristic of the mix between financial returns and social impact. However, even today, it does not have its maximum potential, and there are significant differences in its diffusion among the Member States. The social impact investment market started growing in 2011, with a sharp increase from 2013 to 2015 (see Fig. 4).

Fig. 4.
figure 4

Source: European Parliament [29]

The trend of social impact investments in Europe.

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The Social Impact Investment (SII) market’s development levels are not homogeneous among the EU Member States. Germany, France, Portugal, Italy, and, although it is no longer members of the EU, the UK has already reached relatively high SII market maturity levels. The less developed markets of western, southern, and northern Europe have been showing constant growth in social impact investments. The Central and Eastern European (CEE) countries have a weak SII market. In particular, they lack SII intermediaries, incubators, and investment-readiness support and rarely use innovative SII financial instruments. According to the different maturity levels, Fig. 5 illustrates the different European dynamics of the SII market.

Fig. 5.
figure 5

Source: European Parliament [29]

The different maturity of SII in Europe.

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The social dimension is at the base of the Italian experience. Memorandum 2121 indicates a social and urban innovation tool, one of the recent initiatives of shared value in Italy, a specific approach based on Realtors and regional institutions [38]. The Program aimed to encourage the work inclusion of those detained in the prisons of the Lombardy Region. The project, whose name originates from a specific Article of Italian Law, considers the penitentiary system regulating the possibility of inmates to carry out work outside prisons (Article 21). This project represents the first case of collaboration between public bodies and private companies. Among the private companies involved, Lendlease, the Australian operator, has promoted two important urban redevelopment projects in the Milan area (MIND, i.e., the site of Expo 2015, and Milano Santa Giulia).

3.2 The Social Innovation Fund: An Analysis of Some Financed Projects

The following two paragraphs describe the main characteristics of the Social Innovation Fund’s ongoing projects. The second paragraph proposes an in-depth analysis of the role the Fund mentioned above can play in achieving objectives such as environmental and economic sustainability, and social inclusion, for cohesive economic growth in Italy. The more effective forms of diffusion of social innovation that produce impacts, not only economical, are fundamental above all following the outbreak of the Covid-19 pandemic. This pandemic has caused a widening of development gaps, penalizing the South of Italy more.

The Social Innovation Fund was established through the Notice of the Presidency of the Council of Ministers and mainly financed social innovation interventions. The Fund is entirely part of the logic of social innovation processes having four key elements:

  • Orientation to social needs and the generation of collective outcomes;

  • Co-creation of value as the foundation element of participants;

  • New forms of coordination;

  • Appropriateness in resource allocation choices.

This Fund finances intervention as part of a three-year program aimed at strengthening “the capacity of public administrations to carry out social innovation interventions aimed at generating new solutions, models and approaches for the satisfaction of social needs, with involvement of private sector actors. Caulier-Grice et al. [37] have introduced of social innovation concept (see Fig. 6), providing a framework divided into six moments that describe, from the beginning to the last systemic change, the mode of Fund’s operation. The following three types of interventions are:

  1. a.

    A feasibility study and an executive plan to design a potential social innovation project that responds to an identified need. This intervention in the first two phases, defined as Prompts and Proposals;

  2. b.

    The experimentation of social innovation idea with the application of models for measuring and evaluating social Impact, occurring in the Prototypes and Sustaining phases 3;

  3. c.

    The categorization of social innovation idea as a new public policy centred on a mixture of public and private resources, promoting multi-stakeholder governance with a public and private dimension. The Scaling and Systemic Change last steps.

Fig. 6.
figure 6

Source: Caulier-Grice, Mulgan, & Murray [37]

The Social Innovation Spiral –

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In Italy, 15 million euros were allocated from 2018–2020. About 109 provincial capital municipalities and 14 metropolitan cities were the primary beneficiaries of the Fund. The funded projects mainly concerned three areas of intervention: social inclusion, cultural animation, and the fight against early school leaving. Social inclusion concerns people with disadvantaged or vulnerable situations (Women victims of violence, minors, disabled, unemployed). The “Cultural animation” involves initiatives in the cultural and training sphere, especially regarding the suburbs’ marginal areas. The “Fighting early school leaving” discusses the prevention and fight against school dropouts. In 2020, the total financial resources disbursed amounted to € 21,250,000. Of the 79 projects, only 21 have had access to the second phase. The projects mainly concern the area of Social Inclusion (76%) distributed in Northern and Central Italy (13) and the South (8). In particular, seven projects are located in the Northern regions (Piedmont, Veneto, and Lombardy), six projects in the central areas (Marche, Umbria, Tuscany, and Lazio), and eight in the Southern regions (Puglia, Calabria, Campania, Molise, and Sicily). Social inclusion is the only macro-area that includes funded interventions in all three macro-regions. In particular, the primary social needs identified are social Exclusion (28%), work exclusion (26%), school dropout (17%), housing emergency (13%), elderly frailty (11%), and urban decay (4%). (See Fig. 7).

The Third Sector Entities (ETS) have a predominant role in managing these projects (53%), mainly in Southern regions. In addition, 24% are profit companies, universities represent 13%, and nine percent include other public authorities (See Fig. 8).

Fig. 7.
figure 7

Social Innovation Fund and projects funding. Author’s elaboration on data from the Italian Government Department of Public Administration https://www.funzionepubblica.gov.it/innovazione-sociale

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Fig. 8.
figure 8

Partners typology and Social Innovation Fund. Author’s elaboration on data from the Italian Government Department of Public Administration https://www.funzionepubblica.gov.it/innovazione-sociale

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Different financing instruments (see Fig. 9) are at the base of the Fund, and the banking sector is the principal provider of the resources (57%). The outcomes refer to promoting an enhancement in several well-being aspects of individuals and the community in the medium-long term. The expected results are related to social relations, improvement of personal well-being, increased skills, social inclusion, attractiveness, territorial competitiveness, job placement, and strengthening of administrative capacity.

In general, we distinguish three types of outcomes:

  • Hard outcomes: changes whose measurement takes place through quantitative and objectively verifiable methods;

  • Soft outcomes: those changes whose measurement takes place through qualitative methods, often difficult to measure;

  • Cashable outcomes: both hard and soft changes generating social values transformed into financial proxies (in terms of lower costs / higher revenues)

Indeed, quantitative measurement is still experimental and represents 29% of the total outcomes. The Social Innovation Program’s monitoring system aims to represent the most relevant data collected by analyzing the projects presented and monitored. The critical element is to build a joint analysis of the project’s social, economic, and financial sustainability. In particular, the current evaluation looks at the capacity to build specific metrics to comprehend outcome payers and the returns of the generated impacts. The outcome payers, the stakeholders who will benefit from the economic outcomes deriving from the achievement of the outcomes, take the form of direct and indirect outcome payers. Regions, Chambers of Commerce, Ministries, the National Agency for Active Labor Policies (ANPAL), and Employment Centers are among them.

Fig. 9.
figure 9

Financial sources and the Innovation Social Fund (2022). Author’s elaboration on data from the Italian Government Department of Public Administration https://www.funzionepubblica.gov.it/innovazione-sociale

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3.3 The Innovation Fund and the Link with the Sustainable Development Goals of Agenda 2030: Some Descriptive Results

The development of these new financial instruments works in connection with the United Nations Sustainable Development Goals, i.e., the new 17 objectives for 2030, a new agenda to analyze trends of the world market relating to the automation of work, finance for digital innovation, the democratization of data, the transfer of wealth to the fragile segments of society.

Following the just expressed considerations, this paragraph intends to propose an initial assessment of the potential impacts of the Social Innovation Fund through an analysis of the data provided by the Monitoring Committee. The primary beneficiaries of the Fund mentioned above are mainly the Municipalities, Regions, and Metropolitan Cities.

In particular, three lines of the analysis are:

  • Distribution of ongoing funded projects that refer to the sustainable development goals of Agenda 2030;

  • The link between the sustainable development goals and the Fair and Sustainable Well-being (BES);

  • The local authorities involved in the projects

Of the 17 sustainable development goals (SDGs abbreviation “Sustainable Development Goals”), 29% of the ongoing programs related to Objective 11, “Sustainable cities and communities.“ This objective intends to improve air quality and waste management and allow a building design that satisfies more participatory, integrated, and sustainable logic. The 2030 expected goal is to ensure access to safe and affordable housing. This objective is related to 5 dimensions of Fair and Sustainable Well-being (BES) Social Relations (58%), Quality of Services (27%), Landscape and Cultural Heritage (7%), Economic well-being (4%), Subjective Well-being (1.49%), Safety (1.49%).

Seventeen Italian municipalities presented social innovation projects with this objective. 67% of the projects submitted are located in the Municipality of Syracuse and Prato.

Goal 3 is the second objective that benefited from more resources “To ensure a healthy life and promote the well-being of all citizens at all ages.” As many as 18% of the resources went to projects for Goal 3. The country’s governing authorities will have to face several crucial challenges by 2030, such as:

  • Reducing the number of children born orphans, the maternal mortality rate to below 70 cases for every 100,000 children born alive;

  • To reset the causes of deaths in infants and children under five. This second challenge requires that all countries must commit to reducing neonatal mortality to at least 12 for every 1,000 live births and infant mortality under five years of age to at least 25 per 1,000 live births;

  • Fighting the spread of epidemics such as AIDS;

  • A constant commitment to the prevention and treatment of non-communicable diseases, the promotion of mental health and well-being, the prevention and treatment of drugs and alcoholic beverages, better road safety, more accessible access to sexual and reproductive health care services;

  • Promotion of universal health coverage following a logic of inclusiveness;

  • Improve the quality of the environment to reduce the number of deaths and diseases caused by air, water, and soil pollution problems;

  • Strengthen the implementation of the Regulatory Framework of the World Health Organization Convention on Tobacco Control;

  • Reinforce the investment in research and development of vaccines and drugs to combat communicable and non-communicable diseases;

  • Design a diversified offer of training services aimed at health personnel.

The fulfillment of this objective is linked to four dimensions of the BES: subjective well-being (62%), health (19%), social relations (17%), and work and lifetime balance (2.38%). Eight municipalities in the South have presented projects aimed at this objective. The dimensions of well-being 0are 4: Subjective well-being (62%), health (19%), Social relations (17%), and Work and lifetime balance (2.38%). In the South of Italy, the municipality of Campobasso has presented projects most oriented towards this objective (67%). The projects presented by this joint leader also favour subjective well-being as a dimension of equitable and sustainable well-being.

Objective 4 covers 17% of the programs is the “Quality Education.“ This goal, drawing on the previous Millennium Development Goals (WHO), intends to promote higher quality for all levels of education and all possible opportunities between primary education and professional training. Therefore, lifelong learning paths receive emphasis. In this way, all people will have the opportunity to lead a quality of life consistent with the peculiarities of the territorial area where they live in a safer, more sustainable, and interdependent way. The evidence shows various challenges by 2030:

  1. 1.

    Ensure that all girls and boys complete accessible, equitable, and quality primary and secondary education leading to relevant and effective learning outcomes;

  2. 2.

    Ensure that all girls and boys have access to quality early childhood development, care, and pre-primary education so that they are ready for primary education

  3. 3.

    Ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education, including university;

  4. 4.

    Considerably increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs, and entrepreneurship;

  5. 5.

    Eliminate gender inequalities in education and ensure equal access to all levels of education and vocational training for the most vulnerable;

  6. 6.

    Ensure that all youth and a substantial proportion of adults, both men, and women, achieve literacy and numeracy;

  7. 7.

    Ensure that all learners acquire the knowledge and skills necessary to promote sustainable development, including through education aimed at sustainable development and lifestyle, human rights, gender equality, the promotion of a peaceful culture and non-violent, global citizenship, and the enhancement of cultural diversity and the culture’s contribution to sustainable development;

  8. 8.

    Build and strengthen education structures through education for sustainable development that are sensitive to the needs of children, disabilities, and gender equality and provide learning environments that are safe, non-violent, and inclusive for all.

Many municipalities in Southern Italy, Campobasso, Naples, Bari, Brindisi, Lecce, Catanzaro, Catania, and Palermo, have privileged dimensions of the BES as Education and Training, Social Relations, and Subjective Well-being. In particular, Catania municipality prefers the quality of services (67%).

The fourth SDG that gathers 15% of the projects presented to the Fund is Goal 10, “Reduction of inequalities” between states and within them through promoting social, economic, and political cohesion among citizens.

To achieve this goal, the activation of global social protection policies and targeted planning and management of migratory flows is necessary. By 2030, the target is to increase the population’s income in the most economically disadvantaged conditions by 40%. Indeed, demanding challenges for the European countries. In Italy, following the outbreak of the Covid-19 pandemic, poverty levels considerably increased.

In addition, the various States have identified a 3% reduction in the transaction costs of migrant remittances. This objective involved the projects presented by 13 Italian municipalities, of which 5 in the South (Campobasso, Brindisi, Lecce, Palermo, and Catania) and 8 in the North (Cuneo, Turin, Bergamo, Padua, Treviso, Perugia, Fermo, Rome). The dimensions of the BES connected to the projects related to this objective are essentially 4: subjective well-being (39%), social relations (33%), economic well-being (19%), and quality of services (8%).

The fifth sustainable development corresponds to goal 8, “Decent work and economic growth,” which includes 12% of the total projects. Growth and youth are interconnected, and the young cohorts find full and complex access to the labour market. More than 200 million people currently have no work income. Therefore, creating a green economy and a much more dynamic labour market ready to enhance the potential of the young are two crucial challenges for the growth of both developing countries and emerging and industrialized ones. The realization of development must not take place at the expense of the natural environment, and environmental enhancement is necessary for new forms of growth. Governments have identified some challenges, such as:

  • Improve levels of economic productivity by investing in diversification, technological progress, and innovation, with particular attention to high value-added and labor-intensive sectors;

  • Promote policies aimed at development, job creation, and entrepreneurship, especially for small and medium-sized enterprises;

  • Ensure more efficient and sustainable use of resources to avoid environmental degradation;

  • Ensure full employment and decent conditions of decent work for all;

  • Reduce the share of unemployed young people and “NEETs);

  • Abolish all forms of forced labour and all forms of slavery and exploitation of child labour;

  • Improving the working environment in compliance with safety standards for all workers, including immigrants, especially women, and precarious workers;

  • Promote policies to promote sustainable tourism with essential repercussions on local territories;

  • Develop and implement a global youth employment strategy and the Global Employment Pact of the International Labor Organization.

All other objectives of The Social Innovation Fund indicate a low level of importance (less than 4%) (Fig. 10).

Fig. 10.
figure 10

Social Innovation Fund and BES (2022). Author’s elaboration on data from the Italian Government Department of Public Administration https://www.funzionepubblica.gov.it/innovazione-sociale

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4 Conclusion

New forms of financing such as SIBs and the Social Innovation Fund represent new opportunities for growth in recent years. The logic of the multi-stakeholder partnership indicates how impact finance indicates a new trend partially exploited in the current times. In our opinion, the strong ties between environmental sustainability and the new forms of financing explain why the environment, trust, and financial instruments during the current ecological transition a challenge ahead of us is global and systemic. Therefore, social innovation assumes strong links with the environment and the economy. Financial instruments represent new forms of these critical relations.

The different dimensions of Sustainable Well-being (BES), indicated in the first project cycle of the Italian Innovation Fund, demonstrates that some communities and cities require an increasingly precise financial design to intervene and solve local problems. In recent years, however, the applications of SIBs probably demonstrate their partial beneficial capacity for two main reasons. The first lies in the complex components of the financial structure, and the second issue is the difficulty of constructing reasonable quantitative metrics for evaluating results.

Conversely, “The Covid-19 crisis has created an urgent need for a just, impact-led recovery that serves all people and preserves our planet. It presses us to change our ways to address the tremendous social and environmental challenges better ahead of us.” [26].

This manifesto is clear: to save billions of people from more significant hardship. We must bring impact finance to the core of our economies by defining different actions. This comment is not a wish, but it requires immediate ability to intervene. First, introducing incentives to accelerate impact investment, which pursues social and financial returns to create sustainable jobs, advance education, better health care, and supply the expansion of nonprofit organizations more capable than classical organizations to support the most vulnerable. Also, the growth of investment levels into small and medium-sized impact-driven businesses and high-growth impact ventures to create new activities. Another issue is the impact of transparency on companies. These actions will reinforce the collaboration level of several stakeholders such as private companies, public enterprises, universities, and the public the own mutual trust.

In addition, Impact Finance opens a new way of financing at a territorial level. The 380/2020 EU strategy “Communication on Biodiversity Strategy for 2030 Bringing Nature back into our Lives” represents the starting point for a new reflection on the importance of environmental sustainability in designing local development models for the coming years. The European Commission has identified the socio-ecological transition as one of the main challenges for current and future societies and economies.

However, new steps are necessary to accelerate the ecological transition towards a social economy. A financial dimension of the innovation model requires a better understanding. The Global Impact Investing Network (GIIN) envisions a future world in which social and environmental factors are integrated into investment decisions. To realize this vision, the GIIN Roadmap has presented six categories of action that the impact investing community needs to take on to ensure the industry achieves its potential. Understanding how to effectively measure and manage impact is critical to ensuring investors achieve their desired results to address the world’s most pressing social and environmental challenges. We envisage an extensive use to enable the EU to achieve a continuous long-term improvement of quality of life through the creation of sustainable local communities and cities able to manage and use resources efficiently, i.e., an innovation that respects the principles of environmental sustainability related to new financial instruments. The logic of the multi-stakeholder partnership promoted is well suited to environmental protection and biodiversity in the direction of a sustainable and social economy where all actors are involved and responsible for formulating local development strategies.