The topic of attracting investment and supporting entrepreneurs is always relevant, no matter if it is a crisis year and there is a lockdown, or if the country's economy is growing. Today we will tell you about the It`s Craft Revolving Fund, which opened in spring 2021 to support entrepreneurs in the field of art, crafts, and craft production and is registered in Nova Kakhovka. The director of the fund, Victoria Kulakova, will speak.

To begin with, I would like to introduce the It`s Craft Foundation, which is part of the It`s Craft social enterprise and is the only private foundation in Ukraine that provides financial assistance to beneficiaries from all over Ukraine on a revolving, or repayable, basis. I must say that the topic of financial support is quite broad and has many aspects. Usually, for entrepreneurs who have no experience working with financial institutions, the words "loan" and "credit" have a minor coloration. Therefore, in this article, we will look at several aspects of the activities of such funds, our history of formation, and share examples of a foreign fund that we take as an example.

What kind of a beast is a "social entrepreneur"?

Social entrepreneurship has been a trend in Ukraine for several years, although few people understand what this beast is. There are accusations that social entrepreneurship does not exist because there is no law to regulate it. This is where I usually get a laugh: ask yourself if you are doing something that is not prohibited, or if you are doing only what is prescribed in the Constitution. Of course not. Many countries do not pass laws on purpose in order not to restrict businesses that are created to solve social problems simply because these people are in pain and earn money for others, not for themselves to buy a new car or apartment. Another aspect of social entrepreneurship is that the state cannot offer them support because it could lead to a potentially corrupt situation. And the second reason is that if the quality of benefits or financial assistance were provided to such businesses, there would be a category of social businesses that are only paying lip service to the idea of solving problems, but simply declaring themselves as such in order to get a benefit. And I'll ask you again, do you help others only if someone gives you something for it? Of course not. That is why there is no rush to introduce preferences for doing good deeds.

Establishment of the social enterprise It`s Craft

I have been a certified social entrepreneurship trainer since 2018, a business coach in a number of international projects, and have had my own branding studio since 2012. Since 2014, I have been actively engaged in civic activities and have been a manager at the NGO "Regional Development Agency of the Tavrian Association of Territorial Communities". It is as the manager of the TOTG RDA and a trainer from the British Council that I am known in most communities in Kherson Oblast. The number of people who want to build their own business and the number of clients from existing businesses created the foundation of experience that my partner Pavlo Yarmii and I invested in the It`s Craft project. Our main goal was initially to support entrepreneurs and craftsmen of Kherson region, but in the first month of our activity we realized that it was inappropriate to limit ourselves to our native region, because we do not have enough craftsmen and processors, for example, of meat.

Complex business models that combine the goal of making money and creating change

It's Craft is a platform that consists of an online store and a fund to support craftspeople, which is registered as a charitable foundation. This allows us to provide both grant assistance (non-refundable) to individuals and repayable interest-free financial assistance for the development of entrepreneurial activities. The It`s Craft Foundation is currently funded from the profits of the online store and has a revolving model: the winners of the competition return the funds after a year of using them, and they go to the winners of the following year. The competition's budget grows every year, as the store's profits are added. Thus, year after year, the financial capacity of the fund will grow, as the store's profits increase and the funds provided in previous years are used up.  In May 2021, we signed the first two financial assistance agreements in the form of a repayable loan, and in August we opened a quarterly Permanent Creators' Competition, which finances the production of prototypes of creative products on a grant basis. And very soon, on November 28, the winners of the fall quarter of the Permanent Creators' Competition will be announced. Both financial programs operate on a competitive basis, the conditions are described on the website and consultations are provided by phone.

Who can receive financial assistance from the It's Craft Foundation

How will a working entrepreneur or an ordinary creative person realize that they can apply for support? I propose to look at those who are already represented on the website www.itscraft.com.ua. The store has products from both registered entrepreneurs and individuals - artists and craftsmen ("craft" means handicraft) in categories ranging from food and drinks to souvenirs and interior items. We position the store as a place where you can find craft goodies and authentic gifts for any occasion. Thus, if you produce something from natural raw materials, according to an original or traditional recipe/method, share the values of environmental friendliness, preservation and modernization of traditions, you are a potential partner and seller.

When we created It`s Craft in the spring of 2020, in the first months of the global economic transformation, we consciously planned a long-term strategy and did not pursue super-profits, but built a structure where entrepreneurs would be comfortable: consulting support, support in creating a modern corporate identity and product packaging, brand promotion, online promotion not only within the store but also on social networks, where we have closer contact with customers. We can also highlight our exhibition activities and representation of It`s Craft at fairs, conferences and forums.  Today, the online store is a year and a half old and we are reaching a new level of enterprise automation.

Imitating the best

We analyze not only the Ukrainian market for such services, but also learn from the experience of foreign countries. Studying other countries is extremely important not only from a business perspective, but we were also interested in learning about funding models and fund interaction. After all, when we started our social enterprise, we faced the fact that the legal form of a revolving fund does not exist in Ukraine, although this model of accumulating funds is the most sustainable for reinvestment and withstanding crises. As an example, we would like to share the case of Smart Impact Found, which operates in Serbia. Like our organization, Smart Impact Found is part of a larger hybrid structure:

  • is a non-governmental organization  SmartKolectiv.www.orgwhich has been operating in the sector of consulting and non-formal education for startups and existing businesses with corporate social responsibility for over 15 years;
  • There are partner organizations and volunteers, and hired consultants on a regular basis;
  • and the revolving fund itself - Smart Impact Found.

We were most interested in studying the financial and organizational models of the Foundation. The research was conducted as a series of interviews with Ivanna Stancich. As the Head of the Social Innovation Program, she is responsible for developing and implementing professional and financial support programs for social enterprises, developing partnerships with the business sector, and promoting the Foundation. Ivanna develops the acceleration program and provides consultations to those who have received financial assistance in the form of weekly telephone dialogues.

We will describe the most interesting facts that are still hard to imagine in Ukrainian realities.

  1. In EU countries, there is a law that obliges all enterprises to bear social responsibility of business or so-called corporate social responsibility (CSR). All forms of organizations have to define a specific social goal for their enterprise, allocate resources for it, and report officially on their CSR activities every year. This is impressive. After all, in Ukraine we are still talking about business ethics and responsible production. And for everyone to have their own area of social impact and to measure it, we need to catch up with this level of civic maturity for more than a year.
  2. Smart Impact Found also provides interest-free repayable financial support in the national currency, but equates its equivalent to the value of the euro, and the second most interesting aspect is that the money is provided for a period of 3 to 5 years. This is a rather long period, so an entrepreneur must be very careful in forecasting business liquidity and the severity of market risks.
  3. Before financial assistance is provided, recipients are trained in planning and then have an incubation and acceleration phase, so businesses receive highly qualified support and business education for about 6 months. Let us ask you to imagine the cost of such processes. Consulting organizations provide part of the consultations free of charge, and in return they get PR and recognition of their agencies.
  4. The amount of financial assistance ranges from 10 to 50 thousand euros (in national currency). This sounds like a large sum, but you need to remember that the standard of living in the Balkans is different and in terms of a consumer basket, these amounts will not seem huge.
  5. A very interesting fact is that 50% of Smart Collective's budget comes from its consulting activities, advising large businesses and helping them develop, implement and report on their corporate social responsibility. One of the most famous clients is Coca-Cola. It is worth reminding that Smart Collective is a non-profit public organization. And the organization's budget is allocated not as profit, but to implement the organization's programs. It's about scale.
  6. They accumulate the remaining 50% of the organization's budget from various sources: charitable contributions from 3 corporations, grants from classical donors such as USAID and the EU, and funding from a business angel who used to be a venture capitalist (he took part in the business), but today only provides funds and in-kind support.
  7. Smart Impact Founded is the only social entrepreneurship support organization in Serbia and the only one in the Balkans with this level of competence and scale of activity, and this level became possible after 15 years of activity. They opened a revolving fund only in 2020, and before that, they had been collecting a financial portfolio for 3 years to create this fund.
  8. In European countries, social entrepreneurship also includes non-profit organizations that create social impact (beneficial changes), while in Ukraine, only an individual entrepreneur or a legal entity that conducts economic (commercial) activities is considered a social entrepreneur.

Summarizing the above facts, I would like to conclude that the path of social entrepreneurship, including It`s Craft, is just beginning and it is quite long. While it may not be easy for business today, education, flexibility, openness, transparency and partnership are our future and the offer of the It`s Craft platform. Our mission is and will be the development of creators and craftsmen in the conditions that exist, the development of the community and the enhancement of values that help people live: an ecological attitude towards themselves and nature, cultural and creative self-individuation, and the pursuit of beauty and aesthetics.

We invite everyone who cares to engage in a dialog. If you have any proposals for partnership, cooperation or questions about our activities, please contact us at info@itscraft.com.ua and tel. 066-8982224. Learn more about social responsibility and entrepreneurial support competitions on our website:

The study of social entrepreneurship support organizations was conducted as part of the House of Europe Personal Project with the financial support of Goethe-Institut Ukraine and the European Union.

Victoria Kulakova, director of the This is Craft charity foundation.