Rotterdam has developed a place-based impact investing approach to support the transition towards an “impact economy” that combines financial returns with positive social and environmental outcomes. Through a public-private partnership model, the city works with a coalition of partners to support impact entrepreneurship, focusing on initiatives that engage vulnerable residents in economic activity while addressing barriers to participation. By leveraging municipal tools such as procurement, subsidies, and partnerships, the approach aims to strengthen inclusive growth, empower vulnerable populations, reduce welfare dependency, and embed impact-oriented practices within the local economy.
Place based impact investing in Rotterdam
Abstract
The initiative aims to support the development of an impact economy in Rotterdam by fostering impact entrepreneurship and enabling businesses that generate both economic value and social benefits. A key objective is to reduce the number of people relying on welfare or public assistance by supporting pathways into employment and participation, particularly for vulnerable groups facing barriers to the labour market.
The approach responds to the recognition that traditional economic models are not delivering inclusive or sustainable outcomes, and that new forms of economic activity are needed to address social and environmental challenges simultaneously. The objectives also align with broader transitions in areas such as the circular economy, energy and food systems, as well as with the city’s role in fostering sustainable and inclusive urban development. They also contribute to Rotterdam’s ambition to strengthen social cohesion, improve participation, and ensure that economic growth delivers benefits for all residents.
Place-Based Impact Investing in Rotterdam Summary
Country: Netherlands
City: Rotterdam
EU member state: Yes
Geographic scale: City
City size: Large (1 900 000 residents)
Date launched: 2021
Current status: Ongoing
Policy pillar(s): Education, Labour markets, Housing and the built environment, Public services and infrastructure, Fair climate action
Target group(s): Children, Youth, Women, Older people, People with a migrant background, People at risk of poverty or social exclusion, People with disabilities, Ethnic minorities including Roma, LGBTQI+ community, People experiencing homelessness, Low-income households, Families, Unemployed or underemployed individuals, Small business owners and entrepreneurs
Funding and budget:
Total budget: EUR 14 400 000 (55% subsidies, 20% civil service deployment, 5% out of pocket investments and about 20% was invested in new instrument (impact finance and becoming shareholder of the social impact fund))
Funding sources: Local government (City of Rotterdam), European Commission, Private stakeholders
EU funds/programmes: Not applicable
Rotterdam’s approach is grounded in the belief that “business as usual” in the local economy is not delivering sustainable or inclusive, necessitating a transition towards an “impact economy” that combines financial returns with positive social and environmental outcomes. This diagnosis is informed by persistent inequalities in the city, where a significant share of residents face barriers to full participation in society, including distance from the labour market and reliance on welfare or other forms of public support. The approach also reflects broader global and local transitions – including in energy, circular economy, and food systems – reinforcing the urgency of systemic economic change.
In the absence of a formal overarching policy, Rotterdam has prioritised impact entrepreneurship as a practical entry point into the impact economy. Impact entrepreneurs are seen as key actors in delivering inclusive growth capable of expanding economic opportunities by directly engaging vulnerable populations in producing goods and services.
Delivery is based on a place-based impact investing model structured as a public-private partnership (PPP). Each partner – including the municipality, private actors and other stakeholders – contributes to shared objectives while maintaining their own roles, responsibilities and funding sources. European Regional Development Fund (ERDF) resources play a significant role in supporting these efforts. The city contributes through its policy tools, including procurement, subsidies and regulatory frameworks, while also participating in a broader coalition working to advance the transition to an impact economy. This flexible and collaborative model allows experimentation and learning in the absence of a formalised policy framework.
Implementation focuses on supporting and scaling impact entrepreneurship within the city by combining the public sector’s local knowledge and networks with the private sector’s resources to actively engage vulnerable groups in the local economy. The approach leverages the city’s influence – through purchasing power, funding mechanisms and policy alignment – to provide social enterprises with the support they need, while also addressing barriers to participation for vulnerable residents.
In practice, this includes financing and supporting initiatives that combine employment for vulnerable groups with activities like sustainable food systems, illustrating the integrated nature of economic, social and environmental objectives. Rotterdam has observed a growth in the number of impact and social entrepreneurs as well as a slow drop of people in welfare, which is contrary to the national trend in other cities and regions in the country. In addition, a growing number of civil servants are creating more awareness of the programme and are becoming increasingly optimistic about the potential of impact economy to promote social and economic inclusion.
Monitoring and adaptation of the project are still evolving. In the absence of a formal evaluation framework, the city tracks indicative trends, including the number of impact entrepreneurs, levels of welfare dependency and the degree of engagement among civil servants. A reduction in the number of people receiving welfare or public assistance serves as a proxy indicator to assess progress, while recognising its limitations in capturing the full scope of inclusion outcomes. Nonetheless, challenges remain in embedding the approach across public institutions, as the concept of an impact economy – which raises expectations on the private sector to address social challenges – represents a shift from established practices. Ongoing learning and internal capacity-building are therefore central to strengthening implementation and sustaining momentum.
Promote economic inclusion through entrepreneurship. By linking business activity with social objectives, this approach helps address underlying drivers of welfare dependency and supports more inclusive local growth.
Leverage public-private collaboration to drive systemic change. Combining public tools such as procurement and subsidies with private investment can unlock new resources and scale impact-oriented initiatives. A coordinated ecosystem approach helps align economic, social and environmental objectives, generating co-benefits across sectors.
Thrive Institute – Rotterdam Impact Coalition (case study): https://thriveinstitute.nl/case-rotterdam-impact-coalitie/ Voor Goed Agency – About: https://to.voorgoedagency.nl/about-voor-goed Place-based Impact Investing in Rotterdam (RSM PDF): https://www.rsm.nl/fileadmin/Faculty-Research/Centres/EPSVC/Place_based_impact_investing_Willem_Schramade.pdf Social Impact Fund Rotterdam – What makes us different: https://sifr.nl/wat-maakt-ons-anders/impact
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