The potential of forest-based social innovations (SI) can be understood by looking at existing institutional structures, relevant policy programmes and instruments, as well as the roles of the various relevant actors in SI frameworks. The case examples from Serbia and Slovenia aim to understand how existing institutional structures have become embedded in SI over the years as well as where gaps and untapped potential still exist within SI institutional frameworks. The research team conducted a content analysis of policy documents and of in-depth interviews with actors involved in SI with the results indicating a growing interest in SI in both countries despite the still vague understanding of the concept which is often equated with social enterprise (SE). Major factors that drive this interest are external processes, such as Serbia's accession to the EU and gaining access to EU funds for SI in Slovenia. This growing interest is most often articulated by public actors and civil society organisations but is also made manifest by the growing number of SE in each country. In Serbia, one high-profile example is a newly adopted regulation for SE in collaboration with civil society organisations that also establishes national support structures. However, this process lasted more than ten years, during which different challenges arose that revealed various notable informal and formal voids in governance structures for SI. Similarly, in Slovenia, new bodies were established and regulatory documents were adopted through regulations focused solely on SE, a group of activities that is classified as falling within the social-economy sector. Despite the supporting instruments available, and partially due to the rigid understanding of SI and SE, the potential of forest-based SI is not reflected in Slovenia's forestry or social economy sector. Although improvements are being made in both countries, the current situation certainly demonstrates that forest-based SI will likely continue to manifest as hybrid organisations, partnerships and/or projects. They will need to chart a difficult path through existing institutional structures by utilising opportunities under the mantel of rural development or social economy until each State's forestry sector recognises the potential of forest-based SI and provides suitable instruments to support them. In terms of practice, some of the most urgent recommendations made here relate to the need for connecting actors into viable networks to facilitate dialogue and information exchange as well as reap the benefits that come with centralised coordination.