Growing recognition of the role of social enterprise in the European Union (EU) have fostered interest in social entrepreneurship across Europe (ICF, 2014), but the question is what is its developmental status in Central Eastern European (CEE) and South Eastern European (SEE) countries. Comparative analysis have shown that when compared to western EU, social enterprises in CEE&SEE are less developed, more invisible and unrecognized (Galera, 2016; ICF, 2014). Their role appears to be marginal (Borgaza et al., 2008) when compared to Western countries.
As the specific theme, the forms and methods of financing are crucial for the development of social entrepreneurship initiatives. Access to financing (European Commission, 2011.; ICF, 2014) has been identified as a key issue to be addressed while additional support and the development of new forms of financing is expected. In particular, this is the case at the beginning of the development of the sector as it is generally the case in Central and Eastern European countries.
Social entrepreneurship is characterized by hybridity. In the development sector it relies on different types of financing of the primary economic activity (Di Domenico et al., 2010; Austin et al., 2006), from public money (from either national or local level) to different types of investments and donations. One of the sources of funding that had significance in the development sector in Central and Eastern Europe is certainly the external financing from international organizations and the EU. For example, Czech, Poland and Croatian ICSEM working papers (Dohnalová et al., 2015; Ciepielewska-Kowalik et al., 2015; Vidović and Baturina, 2016) in a way highlight that EU funds and other external finance had the significant role in developing social enterprises in the respective countries.
The main idea behind this work is to investigate the role of external financing in the development of the social entrepreneurship sector in CEE and SEE by means of comparative analysis of six countries: Albania, Croatia, Hungary, Macedonia, Romania, and Serbia. The main research question is what was the role and importance of external financing in the development of the social entrepreneurship sector in stated countries. In a way, this paper attempt to discuss what is the relevance and embeddedness of initiatives launched by external funding in a specific tradition and development of a concept of social entrepreneurship in the CEE and SEE countries. In doing so we will take into account the past experience of the wider third sector with international/external funding sources.
The methodological approach used in the paper is based on desk research. Desk research, as a method of collecting data from existing resources, includes the collection of secondary data from available documents, reports, studies, strategies, etc., related to social entrepreneurship. If possible, the desk research would be supplemented by semi-structured interviews with experts in particular countries and data from ICSEM International Survey on Social Enterprise. This paper is one of the transversal analyses within International Comparative Social Enterprise Models (ICSEM) project.
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4. Financing issues for social enterprises, philanthropy and social finance
