Sustainable funding models: Trading and Social Enterprise

As the availability of grants has diminished over recent years an increasing number of charities (and social enterprises) are looking at trading as a model for generating income: selling products or services on the open market for profit.

Ahead of next month’s Transition to Trading course at SSE London here is a presentation that Ian Baker, our Head of Learning, delivered to a number of charities in Luton that were hoping to move away from grant dependence towards a more sustainable business model:


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The key to sustaining long term CSR partnerships

SSE has built and sustained several multiyear strategic partnerships with organisations including PwC, Linklaters, Royal Sun Alliance and Lloyds Banking Group. These partnerships have generated unprecedented growth in our delivery of learning programmes for social entrepreneurs and subsequently increased our social impact to heights we could have never previously imagined.

For SSE, the key components to long lasting partnerships include; building relationships at multiple levels, open (and frequent) dialogue, understanding our partners business & brand and a clear understanding of each stakeholder’s objectives- both mutual and organisation specific.

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Show me the numbers… of success

Numbers We've been knee-deep in numbers at SSE this week; whether it's discussing social investment with all and sundry, measuring social impact, or powering through "spreadsheets of death". More exciting numbers about some of our Fellows and students this week are below:

 - Ros Spearing, whose Ebony Horse Club has got a £600,000 grant from Sport England towards their riding centre in Brixton (follow them on Facebook)

– Dave Miller, co-founder of Bikeworks, which is opening Bikeworks West next week; their no. 2 branch to follow the award-winning hub in East London, which will deliver similar services to thousands across west London; see their media page for more info

– Junior Smart, founder of the SOS Gangs Project who is holding the SOS Awards event tonight to recognise the achievements of his team and the clients who have turned their lives around. Of the clients they work with, only 12% reoffend (against a national rate of 75%)

Jack Harrison, current SSE London student, has won an award from Arthur Guinness/UnLtd to support his work at Carousel Futbal on the Calthorpe Project in Kings Cross. Up to £15,000 towards his excellent work.

Congrats to all: payment + results is where it's at. Breaking the 3000 follower threshold on Twitter, and 300 on our Facebook Page doesn't seem quite as impressive…. :0)

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Brief thoughts on the Social Impact Bond (and the future of funding)

Yesterday I found myself at NCVO listening (and responding) to draft recommendations from their Funding Commission, which is looking at funding in the sector for the next 10 years. I won't dwell too much on that, but would recommend reading the Emerging Recommendations paper to inform your thinking for the short and long-term.

Social investment and bringing private / commercial / new sources of money into the sector both feature amongst its pages, and the Social Impact Bond (SIB) is also named as one of the financial models that might helpe achieve this. It is an ingenious model, that encourages private and social investment (through social AND financial return), mitigates risk (and upfront investment) for government, and provides that crucial upfront money for the providers in question. And it focuses the sector, quite rightly in my view, on measurement and proving their impact: delivering outcomes they say they will.

Today is the official start of the first pilot, which will tackle reoffending in Peterborough which has been widely covered in the media this morning: nice to hear the sector on Radio, TV and in the mainstream press. And one hopes it is a great success.

At NCVO, I happened to find myself opposite Toby Eccles from Social Finance the organisation behind the bond pilot. So I took the opportunity to ask my main question on SIBs, which I previously raised in our Big Society recommendations paper (pdf), which is "what about the less-easily monetisable outcomes, particularly those (such as social capital, trust, confidence etc) which are crucial to the Big Society agenda?" The risk being that this new money focuses on the easily quantifiable / monetisable stuff (for returns etc), at a time when funding and investment is shrinking across the board.

Toby rightly pointed out that they had to prove the concept, and do it with a fairly chunk-able, solid area (reoffending is such an area where costs, savings etc are easy to quantify) before moving on to other more complex and nuanced areas in a few years. And that SIBs are only one part of the piece. Which makes a lot of sense to me, and I hope that SSE and others can engage and participate in helping forge + create new SIBs (and other financial models) in other relevant areas of social policy.

The challenge, as I see it, is two-fold.

One is that "in a few years" might be a timescale that doesn't stack up in the current climate for a whole range of organisations, if government puts emphasis on this particular model (which is so attractive in the current economic circumstances). Particularly if the Big Society Bank, as the NCVO recommendations currently say, is primarily used to help underwrite these new models. Because, as the recommendations also make clear, there are also other crucial areas that need investment or attention: financial literacy (including investment readiness), early-stage grants (a la Communities First etc), impact-first investment of other types, increasing entrepreneurialism, skills for scaling/trading, attracting philanthropy and corporate support in other ways, and so on and so forth.

Secondly, therefore, how do we ensure that the various funding initiatives and funders (Big Society Bank, Big Local Trust + other Big Lottery programmes, Communities First, Social Impact Bonds, Venturesome, UnLtd, venture philanthropy, trusts + foundations etc etc) are complementary and meeting as many of those needs as possible, in the toughest climate in years? And in the years to come.

From the recommendations, and those thoughts, I take a few things away: as practitioners, social entrepreneurs and social enterprises, we can: measure impact better (more robustly, transparently, quantifiably as possible), improve our understanding of different types of donors (and the quality of asking + relationship management), increase our knowledge and understanding of finance (and of those we work with), and engage in the conversation about new financial models.

Which should be enough to keep me going for now…..

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Revamped Social Enterprise Ambassadors Website!

Final logo_full colour Delighted to see the launch of the re-designed Social Enterprise Ambassadors site, designed by the wonderful team over at Webstars LTD. As part of a rebrand and renewal of the ambassadors programme, SEC and SSE have worked closely together to create a new web portal for the OTS-funded initiative, now in its third year. It's always fun being involved in something like this from 'soup to nuts' as it were…from writing the brief onwards. Kudos to Pauline (and Vicky) at SEC for sorting out the photos and much of the content more recently.

The redesigned site features a lot of interactive content, including photos, videos and some extensive bios of the ambassadors. For instance, check out long-time SSE friend + expert witness Craig Dearden-Phillips, SSE Fellows Saeeda Ahmed and Tokunbo Ajasa-Oluwa, and Tim Campbell, who came to SSE earlier this year for a fellowship session on Money and remains a close friend to us here in Bethnal Green.

Some other interesting features that might be worth checking out:
– Looking for an ambassador near you? Check out the Ambassador Locations
– The ambassadors now focus more closely on specific audiences, Young People, Business & Finance, Public Services
– Want the inside scoop? The ambassadors are avid bloggers and tweet like singing birds

Really great to see this site go up and to have worked closely with the ambassadors (thanks to Sophi, Peter, Julie, et al), who have been very helpful and supportive through this process and quick turnaround. Am looking forward to the programme making a large impact on the different target groups for the various campaigns in the coming year

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