Work4Progress (W4P): Building inclusive employment ecosystems – Beyond Grants

Overview

Across emerging economies, women and young people continue to face structural barriers to quality employment and entrepreneurship. These barriers are not only financial. They are also relational and systemic: weak local employment ecosystems, limited access to appropriate support, fragmented value chains, insufficient trust between civil society and financial institutions, and a lack of scalable solutions rooted in local realities.

In 2017, “la Caixa” Foundation launched Work4Progress (W4P) to address this challenge. Rather than operating as a traditional grantmaking programme, W4P works as a long-term platform for social innovation and ecosystem building. It supports inclusive job creation and community-led entrepreneurship in India, Mozambique, Peru, Colombia and Ghana, with a particular focus on women and young people in underserved rural areas.

The programme combines three mutually reinforcing elements: participatory social innovation, multi-stakeholder platforms and, more recently, a hybrid finance strategy. Through listening, co-creation, prototyping, and acceleration, W4P helps local actors identify promising solutions, test them in real-world contexts, and connect them to the partnerships and financial mechanisms needed to grow.

The case demonstrates how philanthropy can move beyond grants without abandoning its social purpose. For this programme, “la Caixa” Foundation uses flexible and risk-tolerant capital to build trust, reduce uncertainty, strengthen local ecosystems, and bridge gaps among entrepreneurs, civil society organisations (CSOs), and local financial institutions. The aim is not only to fund isolated enterprises, but to create the conditions for inclusive employment systems to emerge and sustain themselves over time.

Since its launch, W4P has supported the creation of more than 34,000 businesses and generated more than 76,000 jobs. Its experience shows that foundations can play a catalytic role by connecting actors that usually operate separately and by using finance strategically to help locally rooted innovations cross the “valley of death” between experimentation and scale.

“la Caixa” Foundation: A snapshot

“la Caixa” Foundation is a leading Spanish philanthropic organisation, originating from the former savings bank “la Caixa” (founded in 1904 in Barcelona). Its mission is to promote social inclusion, equal opportunities and societal progress through social, cultural, educational, scientific and international cooperation initiatives.

The challenge

The central challenge addressed by W4P is the disconnect between local innovation, employment creation and access to finance. Across W4P geographies, many enterprises emerging from community-led innovation processes have strong potential but remain too small, too early-stage or too risky for conventional financial institutions. They may lack collateral, credit history, formal business records, investment readiness or the scale required to access existing finance.

This affects a wide spectrum of actors: from financially excluded microenterprises to growing businesses in the so-called “missing middle”. At the same time, CSOs and local ecosystem actors often have deep knowledge of communities and strong convening power, but they may lack the tools, incentives, or financial capacity to engage effectively with banks, investors, or public financing instruments.

As a result, promising innovations often face a “valley of death”: They are strong enough to move beyond a grant-supported prototype, but not yet sufficiently mature to attract commercial finance. This is not only a funding gap. It is also a coordination gap between actors with different languages, incentives, time horizons and perceptions of risk.

W4P’s experience has shown that addressing this challenge requires more than adding finance. It requires building the relationships, evidence, trust, and capabilities that enable local enterprises, civil society organisations, and financial institutions to work together. This is where the role of philanthropy becomes particularly important: Foundations can absorb early-stage uncertainty, convene actors, support experimentation and help create pipelines of investable but impact-oriented initiatives.

The approach

W4P is best understood as a platform for systemic transformation. Its starting point is the conviction that communities are not passive beneficiaries of employment programmes, but active co-creators of economic solutions. This is particularly important in rural and underserved contexts, where exclusion often emerges from multiple barriers at once: lack of finance, limited mobility, weak market connections, gender norms, low access to technology, and fragmented institutional support.

W4P addresses these challenges through an integrated approach that invests in local ecosystems by combining ecosystem-building, social innovation, and hybrid finance. The programme methodology unfolds through four sequential stages:

1. Listening processes use participatory and ethnographic tools to understand local aspirations, constraints and capacities. This is the first step in ensuring that interventions are not externally designed but emerge from local realities and community aspirations.
2. Co-creation brings together civil society organisations, communities, entrepreneurs, public actors, academia, private-sector actors, and financial institutions to collaboratively design responses. By working over the long term in specific territories, the programme creates conditions for collaboration among these actors. These platforms allow partners to jointly identify opportunities, test ideas, build local ownership and align around shared objectives for inclusive economic development.
3. Prototyping allows solutions to be tested, adapted and refined. Examples across the programme include solar irrigation systems in Mozambique, circular economy initiatives linked to banana biofibre in Peru and women-led safe transport networks in India.
4. Acceleration supports the scaling of those initiatives that show potential for employment creation, inclusion and sustainability. W4P has progressively incorporated a hybrid finance strategy to address the financing gaps faced by emerging enterprises. Grants remain essential to support early-stage innovation, experimentation, ecosystem facilitation and capacity building. As enterprises mature, the programme can introduce recoverable donations and investment-like instruments that help build financial track records and prepare businesses for external financing.

This approach is implemented through multi-stakeholder platforms that operate as “networks of networks”. Across countries, W4P has worked with more than 60 partner organisations, including civil society organisations, universities, financial institutions, businesses and public institutions. The value of these platforms lies not only in coordination but also in the gradual construction of trust and shared responsibility among actors who often work in silos.

A distinctive feature of W4P is its use of developmental evaluation as a continuous learning tool. Evaluation is embedded throughout the process, rather than treated as an end-of-project exercise. This allows partners to adapt strategies in real time, identify emerging opportunities and learn from setbacks as well as successes. The W4P Virtual Lab further supports cross-country learning by documenting methodologies, sharing knowledge and connecting geographically dispersed ecosystems.

Over time, the programme has also developed an impact investment strategy. This did not emerge as a separate financial layer but as a response to a problem identified through the ecosystem work itself: many promising enterprises and prototypes generated social and economic value but lacked access to appropriate finance to consolidate and scale. The hybrid finance strategy therefore builds on the programme’s social innovation architecture and seeks to connect locally rooted enterprises with suitable financial instruments. Put simply, finance is not introduced as a substitute for social innovation, but as a tool to sustain and scale the solutions that emerge from it.

Philanthropy as catalytic capital

A central pillar of this approach is the role of philanthropy as catalytic capital. “la Caixa” Foundation provides flexible, patient and risk-tolerant funding that can absorb uncertainty, support technical assistance and enable the development of tailored financial solutions. In some contexts, these instruments include guarantees, concessional loans, and co-financing mechanisms deployed in collaboration with local financial institutions.

The Mozambique pilot with GAPI Sociedade de Investimentos, a local financial institution, is a useful example. Within the W4P ecosystem, GAPI is implementing a blended model that combines credit, guarantees and technical assistance to facilitate access to finance for micro, small and medium enterprises. The guarantee reserve and co-financed credit reduce perceived risk, while technical assistance strengthens the bankability of enterprises and supports stronger engagement from the financial institution.

In Peru, W4P collaborates with Codespa, Caja Huancayo and Beneficial Returns on a model that also combines credit, guarantees and technical assistance. This illustrates how hybrid finance can be adapted to different institutional contexts while remaining anchored in the programme’s broader objective – inclusive employment and sustainable local economic systems.

The main advantage of this approach is that it bridges worlds that usually remain disconnected: community-led innovation, civil society support, local finance and impact investment. Its main complexity lies in the need for time, trust, and careful alignment of incentives. Not all prototypes become viable enterprises, not all enterprises are ready for finance, and not all financial institutions are prepared to work with underserved entrepreneurs without appropriate risk-sharing and support.

Results

Since 2017, Work4Progress has supported the creation of more than 34,000 businesses and generated more than 76,000 jobs in India, Mozambique, Peru and Colombia. These figures reflect the scale of the programme, but they do not fully capture its systemic contribution: strengthening local ecosystems, improving access to finance, building trust among actors and creating pathways for local innovations to grow. In 2026, the programme was also launched in Ghana, where results are expected to emerge progressively in the coming years.

The programme has also generated practical examples of inclusive and sustainable entrepreneurship across sectors and geographies. These include solar irrigation systems in Mozambique that enhance agricultural productivity, banana biofibre initiatives in Peru linked to circular economy and rural livelihoods, and women-led safe transport networks in India that address both employment and mobility constraints.

The impact investment strategy is being tested through pilots in different contexts. In Mozambique, GAPI’s blended finance model reaches more than 50 SMEs and 168 beneficiaries. In Peru, the collaboration with Codespa, Caja Huancayo and Beneficial Returns reaches more than 50 enterprises and 600 beneficiaries. Together, these pilots show how philanthropic capital can help de-risk enterprise finance while maintaining an impact-first logic.

Beyond direct results, W4P has contributed to international learning on social innovation, employment and philanthropy. The programme has been featured in global spaces such as the Paris Peace Forum, the United Nations SDG Good Practices platform, and the EU Policy Forum on development, validating its potential for replication and adaptation in other contexts.

Key takeaways

The W4P journey offers important lessons for foundations seeking to move beyond grants:

• Building effective multi-stakeholder platforms requires time, trust and sustained facilitation
• Aligning the expectations of foundations, civil society organisations, entrepreneurs and financial institutions is demanding, particularly when they bring different incentives, languages and risk perceptions
• Financial instruments need to be carefully adapted to local realities and to the different stages of enterprise development.
• Above all, W4P shows that impact investment strategies are most effective when they are embedded in strong ecosystems, rather than designed as stand-alone financial products

Three insights stand out:

1. Going beyond grants requires a shift in the role of philanthropy. It is not only about introducing new financial instruments, but about moving from funding individual projects to building ecosystems, strengthening trust, supporting experimentation and creating the conditions for locally rooted innovations to grow.
2. Hybrid finance can help bridge the gap between innovation and scale, but only when the surrounding ecosystem is ready. Credit, guarantees and recoverable funding can reduce risk and unlock growth, but they need to be combined with technical assistance, local ownership, patient intermediation and strong links between entrepreneurs, civil society organisations and financial institutions.
3. Foundations of banking origin can play a distinctive bridging role. They are well placed to connect the cultures of philanthropy and finance; use flexible and risk-tolerant capital to de-risk early stages; and mobilise local financial actors while keeping social impact, inclusion and long-term sustainability at the centre.

Calls to action

For foundations, W4P shows the importance of investing in ecosystems, not only in projects. Foundations can use their independence, convening power and flexible capital to support long-term processes of social innovation, strengthen local actors and create the conditions for inclusive enterprises to grow.

More specifically, for foundations of banking origin, the case points to a specific opportunity: to draw on financial expertise while preserving an impact-first logic. The key question is not simply whether a foundation can deploy recoverable or investment-like instruments, but whether it can use them to strengthen the ecosystem around vulnerable entrepreneurs and underserved communities.

For impact investors and financial institutions, W4P demonstrates that underserved markets can become more accessible when finance is combined with local knowledge, technical assistance, guarantees and trusted intermediaries. Partnerships with philanthropic actors can reduce perceived risk, build investable pipelines and support responsible engagement with entrepreneurs who would otherwise remain excluded.

The next step is to build more structured collaboration between foundations, local financial institutions, impact investors and public development actors. W4P suggests that the future of “beyond grants” will not be defined by finance alone, but by the capacity to connect capital with participation, trust and locally rooted innovation.

This article was commissioned as part of Empowering Philanthropy Infrastructure for Change (EPIC), a project co-funded by the European Union.