Encouraging social entrepreneurship
Based on Article 27 and Article of the Law on Innovation Activity (“Official Gazette of the Republic of Macedonia” No. 79/13, 137/13, 41/14, 44/15, 6/16, 53/16, 190/16 and 64/18), and regarding Rules for organizing and conducting competitions or challenges to encourage innovation in the priority areas of science and technology dated 20.01.2020, archive number 01-514/17, the Rules for supplementing the Rules for organizing and conducting competitions and challenges to encourage innovation in the priority areas of science and technology from 16.03.2020, archive number 01-797/6, and and the Rules for supplementing Rules for organizing and conducting competitions and challenges to encourage innovation in the priority areas of science and technology dated 01.06.2020, archive number 01-1662/5, the Fund for Innovation and Technological Development on 09.09.2021, hereby announces the public call for:
ENCOURAGING SOCIAL ENTREPRENEURSHIP
In today’s volatile post-Covid-19 world, we are witnessing the many challenges that await us to solve or at least contribute to solving them, and the success of the business is no longer measured only by its financial performance, but also by how it contributes towards the betterment of society. In the past few years, there has been an increase in entities taking action to address environmental issues, such as sustainability and climate change, but also social inequalities, such as low levels of inclusion or diversity in enterprises. On the other hand, the habits and needs of customers or service users are changing. Throughout the world, but more and more in our country as well, customers want to know more about the origin of the product or service. Whether the product is created without violating natural or ethical codes or if it can be recycled are just some of the value-added examples for which buyers are willing to pay more.
Social entrepreneurship , as a concept of doing business, is not an unknown process in our economy, and in recent years it has become increasingly relevant through various programs that circulate in the startup ecosystem and help entrepreneurs to define, measure and increase the positive impact that they make on the society.
Social entrepreneurship or new forms of businesses try to create value or generate a positive impact on the society by offering services or products that meet the specific needs of the community by offering non-conventional solutions to societal challenges. These entities are closely linked to social innovation . Their capacity for innovation and multiplication is becoming an ever stronger mechanism for coping with challenges that contribute to exclusion and marginalization of those segments of society that do not have the capacity to deal with them on their own.
Typically, most of the profits generated by new forms of businesses within social entrepreneurship and their social innovations are reinvested in a way that further supports the goals of sustainable and inclusive growth. The innovative ideas of these entities have the capacity to make the world a better place. The inspiration behind social innovation is to realize a solution that will not only help the social entrepreneur generate profit, but will also make a positive change in the world. For instance, instead of embracing environmentally harmful production methods, social entrepreneurs come up with ideas so that the environment is not harmed and they still make a profit.
Perhaps the greatest advantage of being a social entrepreneur is the impact you can have on the society. Social entrepreneurs create business activities in a variety of sectors that can have a positive impact on society, including alternative energy sources, health services and a healthy lifestyle, social protection and education, addressing climate change and inequalities. The benefit of social innovation is in the freedom of research and creation of innovative solutions that can inspire change. Social entrepreneurs often take risks and think outside the box, constantly looking for new ways to solve problems.
Through this public call, the Fund for Innovation and Technological Development is trying to offer solutions to some of the key challenges faced by social entrepreneurship in the country:
- Lack of support for funding. Access to appropriate financial instruments is the biggest challenge for social entrepreneurs. The existing supply of financial instruments does not correspond to the needs and capacities of social entrepreneurs and is insufficient compared to the supply that exists for commercial enterprises. Therefore, social entrepreneurs struggle to accumulate the necessary capital and mainly invest their savings to deal with social problems.
- Scalability or ability to increase the capacity for growth and development.The primary problem faced by many social entrepreneurs is the lack of opportunity to take their business to the next, higher level.
- Duality of mission.Social entrepreneurs strive to create social value by solving various social problems that burden us. Through this challenge, by creating the right business model and strategy, we help social entrepreneurs create a model that is both impactful and financially sustainable.
This challenge of the Fund shall be realized in partnership with the Association for Research, Communications and Development „“Public” and the Business Impact Lab.
The partner organizations will provide individual mentoring support to selected competitors in the field of impact communication, and will provide access to national and global scaling programs for their businesses.
[1] The term social entrepreneurship covers a wide range of activities and initiatives, including social initiatives implemented by for-profit businesses, entities that explicitly pursue a social goal, relationships and practices that benefit society.
[2] According to the definition of the European Commission, social innovation means the development of new ideas, services and models in order to better address social problems. As a concept, social innovation can refer to a product, production process, idea, social movement or a combination of the above.
The goal of this call is to encourage the development of social entrepreneurship by supporting innovative solutions to current social needs and societal challenges (social innovation), while ensuring sustainable and inclusive development.
Almost every country in the world has promised to improve the planet and the lives of its citizens by 2030. They committed to 17 life-changing goals, listed by the UN in 2015. These global goals, also known as the Sustainable Development Goals (SDGs), include ending extreme poverty, providing better healthcare for people, and achieving equality for women. What is clear is that not only are smart solutions needed, but entities with innovation capacity are also needed.
This challenge provides support in achieving at least one of the following goals for sustainable development :
To end poverty in all its forms everywhere | |
To end hunger, achieve food security and improve nutrition, and promote sustainable agriculture | |
To ensure inclusive and equal quality education and to promote lifelong learning opportunities for all | |
To achieve gender equality and encourage women and girls | |
Promoting inclusive and sustainable economic growth, employment and decent work for all |
The implementation of the project can be up to 12 (twelve) months.
The Fund may, based on justified circumstances, approve extensions of the project implementation for up to 6 (six) months.
A total budget of 6,000,000 (six million) denars has been provided for financing projects within this call.
For an individual project proposal, the Fund provides financing of up to 90% (ninety percent) of the total project budget, in a maximum amount of 1,500,000 (one million and five hundred thousand) denars for companies that will be established within 30 days after receiving the Project Proposal Notice (in case a team appears as a Competitor).
A minimum of 10% (ten percent) of the total project budget must be provided by the Competitor.
Funds received from the Fund on any other basis or any other state aid, will not be considered eligible funds for co-financing by the Bidder – beneficiary of the funds from the Fund.
If there are not enough quality project proposals or the conditions for financing are not met, the Fund reserves the right not to award funds.
The eligibility criteria to be met by the competitor are:
- to be a trade company established in accordance with the Company Law and registered in the Central Register of the Republic of North Macedonia, or
- citizens’ association established in accordance with the Law on Associations and Foundations, registered in the Central Register of the Republic of North Macedonia, or
- team consisting of 2 (two) to 5 (five) members – natural persons
In the event that a company appears as a competitor, it must meet the following eligibility criteria:
- the annual income of the competitor should not exceed 1,000,000 (one million) euros in denar counter value, according to the financial reports for the previous two fiscal years;
- the average number of employees should not exceed 250 employees;
- more than 6 (six) years should not have passed from the moment of registration of the trade company until the moment of submission of the project proposal to the Fund;
- the trade company is owned by a natural person, legal entity (which is not in state ownership) and/or an association of citizens, and/or an institution that performs higher education, i.e. scientific research activity (with ownership share in the competitor of up to 20%);
- The competitor or its partners/shareholders are not directly or indirectly owners of over 20% in another trade company(ies) and whose individual annual income exceeds 1,000,000 (one million) euros in denar counter value in the previous two fiscal years and whose average individual number of employees does not exceed 250 employees, except in case of connection with a higher education, i.e. scientific-research institution;
- there should be no bankruptcy or litigation proceedings initiated against it;
- it should have all due liabilities on the basis of public duties and contributions settled;
- there should be no proceedings for forcible enforcement of overdue monetary claims initiated against it;
- in accordance with the Law on State Aid Control and the Regulation on the requirements and the procedure for granting de minimis aid, it should meet the following requirements:
- Not to have accumulated more than 200,000 (two hundred thousand) euros of minor aid for a period of three fiscal years, including the requested amount of funds from the Fund;
- Not to have accumulated more than 100,000 (one hundred thousand) euros of minor aid for a period of three fiscal years, including the requested amount of funds from the Fund, if the company is active in the road transport sector;
- not face with difficulties (enterprise facing with difficulties is enterprise not able to fulfil its liabilities from own resources or means which can be obtained from its owner/shareholders or creditors in order to prevent losses which would certainly lead to short-term and long-term cessation with the work of the enterprise without any external intervention by the providers); and
- it should not be engaged in coal production.
In case a competitor is a team or association of citizens whose project proposal has passed the selection phase, the competitor is obliged, within 30 calendar days after receiving the Notice of Selection of the project proposal, to establish a company in which as founders will appear at least 51% of the team members, which company will assume all the rights and obligations regarding the implementation of the Project and which will meet the criteria for eligibility of the public call.
If the project proposal includes a consortium , the requirements for the consortium member(s) are the same as for the Lead Competitor.
When applying to a consortium, the main project holder is the Lead Competitor.
In case of a consortium, all members of the consortium participate in the co-financing of the project
The project proposal should include activities for development of a new, innovative solution in stages from a confirmed concept to a solution functional in a real environment.
The activities may include:
- New product, service or model testing activities;
- Research and development activities;
- Prototype design and development;
- Activities for systematic measurement of the impact of the enterprise;
- Human resources, including external collaborators or consultants;
- Activities for access to impact and other investors;
- Internationalization of products or services;
- Multiplication activities in other environments and other target groups;
- Digitalization processes.
The abovementioned list of activities is not limiting.
Costs eligible for funding
- Gross salaries with included salary supplements defined in accordance with the Law on Labor Relations (holiday work, Sunday work, shift work, night work, etc.) for persons who are or will be employed by the beneficiary of the award and who directly participate in the realization of the project. The amounts of gross salaries for the employees engaged in the project should correspond to the established practices of the beneficiary before the start of the project, reduced by the amount of potential state subsidy received on the basis of salary;
- Procurement and/or rental of equipment and consumables for research and development;
- Hiring research and development experts/advisors;
- Hiring consultants for needs directly related to the project results (expertise in innovation management, financial management, asset mobilization, business development, marketing expertise for market testing and validation of potential beneficiaries, legal affairs, intellectual property protection, etc.);
- Subcontracted research and development services;
- Provision of quality, standardization and accreditation;
- Preparation and filing of a patent, trademark and/or industrial design application and
- Office and business support (rental of business premises, overhead costs, bank commissions, accounting services, submission of an annual account for the intended account of the project, costs for publishing a public procurement notice, hosting and other types of administrative costs) in the maximum amount of 15% (fifteen percent) of the total project budget.
Costs that are not eligible for financing:
- Salary supplements;
- Interest or debt costs on either side;
- Expenses and provisions for past and possible future losses or debts;
- Coverage of losses on currency exchange and penalties;
- Expenses for food and catering;
- Staff recruitment costs (cost for announcements of job posting, commissions from employment agencies, costs related to candidate selection, etc.) and relocation costs;
- Purchase of land or buildings, including renovation;
- Cash payments from the special purpose bank account for the project;
- Costs for consulting services provided by persons employed by the Beneficiary;
- Export activities (expenses directly related to export of products, establishing of and working with distribution network and other);
- Annual patent maintenance fees (except for well justified cases estimated as permissible expense during evaluation of draft projects);
- Costs for consulting services provided by the owner/s of the enterprise that is a beneficiary of the award;
- Renting of business premises from a lessor who participates in the activities of the project or is a person related to the Beneficiary of the award;
- Procurement of passenger, freight and transport vehicles;
- Procurement of used equipment;
- Value Added Tax (VAT), in case the awarded entity is entitled to a VAT refund;
- Costs for realization of activities that were previously financed from other sources.
The costs estimated in the project budget should correspond to the activities provided in the project application.
Only the costs incurred for activities carried out for the duration of the project, which are in accordance with the approved Project Budget and the Rules for organizing and conducting competitions and challenges to encourage innovation in the priority areas of science and technology shall be considered eligible costs.
The Fund reserves the right to negotiate with the winners on defining the project activities and budget based on the recommendations received from the Evaluation and Selection Committee (hereinafter: the Committee), prior to the signing of the Award Granting Contract.
In case the project is based on existing intellectual property rights, the Competitor shall be obliged, before signing the Award Granting Contract, to submit proof of the right to use the intellectual property in the form of a licensing agreement, in-kind contribution agreements, or other type of agreement confirming that the Competitor has the right to use the intellectual property on which the project results are based.
The Fund is not liable for intellectual property rights disputes between the Beneficiary and third parties.
All intellectual property rights and know-how that will be created during the implementation of the Project and / or as a result of the implementation of the Project belong to the Beneficiary and if applicable, the Beneficiary should protect the intellectual property rights.
The procedure, from the receipt of the received applications to the selection and the final decision on the selection and award of funds to the awarded competitors, consists of several steps:
- Administrative verification of applications (whether the application is complete and in accordance with the eligibility requirements stated in the public call);
- First evaluation of the project proposal (pre-selection)
- Pitching or presentation of the pre-selected project proposals before the Commission for evaluation and selection (optional);
- Selection of the best project proposals
- Signing of contracts
Each project proposal shall be evaluated by the Evaluation and Selection Committee, consisting of:
- Two (2) representatives – external experts in the field of the challenge
- Two (2) representatives from partner organizations
- One (1) representative of the Fund
The Committee operates on the basis of a Rules of Procedure of the Evaluation and Selection Committee that is adopted at the first meeting of the Committee.
NOTE: Upon request of the members of the Committee, the Fund shall have the right to hire experts who shall give an expert opinion on certain applications, appropriate to the area of their expertise. In such a case, the expert opinion shall be taken into account by the members of the Committee when evaluating the application.
The main criteria for evaluating project proposals shall be:
- Degree of innovation
- Project team capacity
- Project quality
- Implementation potential/market potential
- Impact
The Fund reserves the right not to award a contract if there are insufficient quality project proposals or the prerequisites for awarding the contract under these Rules and the requirements set forth in the Public Call are not met.
The main criteria and sub-criteria for project evaluation are given in the Evaluation Table form.
When applying, the following documents must be submitted:
Project documentation (signed and stamped by an authorized representative of the Competitor, and available through the Fund’s website):
– Duly completed form for project application
– Duly completed form for the project budget
– Statement of the Competitor for acceptance of the conditions of the Fund
– Notarized statement for ownership – founding structure of the Competitor (except in the case when a team or an association appears as a Competitor, it is submitted after the establishment of the company).
– Short CVs of the main persons engaged in the project (maximum for five people) in Macedonian language
The overall documentation should be submitted in Macedonian language. The project documentation must be submitted on the forms prepared by the Fund.
Project documentation along with CVs to be attached to the form by clicking the “Apply” button.
The deadline for applying for the public call is until 22.10.2021till 14:00..
Only those project proposals that have been submitted in the above manner and within the given deadline shall be considered for funding.
The rules and procedures for implementation, monitoring and supervision of the project are defined in the document Rules for organizing and conducting competitions and challenges to encourage innovation in the priority areas of science and technology from 20.01.2020 and Rules for supplementing the Rules for organizing and conducting competitions and challenges to encourage innovation in the priority areas of science and technology from 16.03.2020 and 01.06.2020 година.
For all additional information you can:
- contact us on the e-mail address sp@fitr.mk
- call us: 02 3145 258
In order to assist you in preparing project proposals, the Fund will organize info events during the call; free technical assistance from experts and mentoring workshops.
The information on these activities will be timely posted on the Fund website and on social networks (Facebook and Instagram).
1. In the part “Who can apply” on the call, the citizens’ association is obliged to establish a trade company that will take over all the rights from the call, regarding the implementation of the project. Does the obligation for 51% of the team members to appear as founders also apply to the association or only when a team appears as an applicant?
If the project application is submitted by the Association, then the Association should appear as the founder of the newly established legal entity. If the applicants are individuals (members of the project team) who are not related in an appropriate legal form, then at least 51% of the persons who are members of the team that will implement the project should appear as founders of the newly formed legal entity.
2. Is it allowed and / or recommended with the same project to apply to the two open calls, Social Entrepreneurship and /
or Co-financed grants for commercialization of innovations? How to assess who is more suitable for our project?
With the same project you can apply for both calls but if you get funding for one of the calls you will not be able to get funding for the other call.
When applying for calls, you should consider in detail the purposes and conditions of application contained in the public calls.
The Social Entrepreneurship Challenge aims to support innovative solutions to current social needs and societal challenges (social innovation), while ensuring sustainable and inclusive development and to cover at least one of the Sustainable Development Goals set out in the public call. Trade companies, citizens’ associations and teams can apply for this call. Citizens’ associations and teams before signing the contract with the Fund should establish a company that will take over the responsibilities of the project.
The project proposal should include activities for development of a new, innovative solution in stages from a confirmed concept to a solution functional in a real environment.
The purpose of the public call for commercialization of innovations is to encourage increased research and development activities in the private sector, to encourage cooperation between the private sector and higher education and research institutions, as well as other forms of cooperation for commercialization of innovations. This call is open to companies that want to develop an innovative product, service or process, alone or in cooperation with another company and / or institution that performs higher education, scientific research activity. The instrument offers financial support to companies registered in the Republic of North Macedonia in order to develop and implement innovative solutions, including support for companies with high growth potential.
The support through this instrument shall be awarded to projects with a clear commercial purpose that are in the phase of a prototype (or appropriate phase depending on the type of innovative product, service, process) up to the pre-commercial (pre-market) phase.
3. Does a registered craftsman can apply as an individual to the call, or maybe two or three registered craftsman can apply as a team to the call?
The following can apply for the call: trade companies, citizens’ associations and teams composed of individuals. If you are applying as a team, the team should consist of a minimum of 2 to a maximum of 5 members (individuals, not legal entities).
In accordance to the provisions of the public call, in case a competitor is a team whose project proposal has passed the selection phase, the competitor is obliged within 30 calendar days after receiving the Notice of Selection of the project proposal, to establish a trade company in which as founders will be at least 51% of the team members, which trade company will assume all rights and obligations in relation to the implementation of the project and which will meet the criteria for eligibility from the public call.
4. Given that we are applying as a team and not as a trade company, which of us and in what capacity should fill in the application for acceptance of the conditions and should we fill in the Statement of Ownership structure at all?
5. Are the costs of marketing activities eligible for funding? If the answer is yes, are there any restrictions regarding the type of marketing?
5. Дали трошоците за маркетинг активности се подобни за финансирање. As of 06.04.2021, 14:00.околку одговорот е позитивен, дали има некакви ограничувања во однос на типот на маркетинг ?
In accordance with the provisions of the public call, costs for expertise in the field of marketing are allowed, which refer, for example, to market testing and validation of potential customers, creating a marketing strategy, etc. Direct marketing costs are not allowed.