Following the news of a general election, we now stand at an important juncture. With the first 100 days of government starting in July comes the potential for rapid change. The social economy sector stands ready to walk in lockstep with policymakers to bring about real change to the UK’s most deprived regions. In this piece, we lay out solutions for policy-makers to support social entrepreneurs to deliver their solutions to some of society's most complex issues alongside economic regeneration.
A tale of resilience
The past decade has been difficult for businesses worldwide, with economic turbulence exacerbated by recent inflation spikes. Start-ups, particularly smaller organisations, have borne the brunt of these challenges in the UK, amplifying the strain on the nation's high streets. Yet, amid this turmoil, social enterprises have emerged as beacons of hope, opening their doors and staying afloat, especially in more economically marginalised communities.
The recent AKOU evaluation report into the ten-year programme, facilitated by School for Social Entrepreneurs (SSE), unveils a staggering 81% two-year survival rate for its social ventures, outperforming the UK SME average of 73%.
When policymakers are exploring interventions to rejuvenate and catalyse economic activity in these cold spots they need to do so realistically. Often there's intergenerational dependency, very low skills base and very low money circulation.
These entrepreneurs are driven not by profit alone but by a genuine desire to effect positive change in these communities. For the past 25 years, SSE has existed to support these visionary leaders, offering expert-led sessions, action learning sets, and grants.
Innovative funding models
Like any business, social enterprises need access to finance to start, scale and grow. But more than ever, that support package needs to be coupled with skills development and access to networks. At SSE, we have pioneered a new way of grant-making, Match Trading, which teams up capacity building with incentivised funding to encourage social entrepreneurs to build their own trading base and grow in resilience.
To help social enterprises achieve sustainability and deliver social value, they need support. Through our Lloyds programme, we have pioneered a new way of grant giving that has proven effective. This incentive grant funding encourages them to pursue their traded ambitions, acquire customers and partially indemnify them from the costs of the process of customer acquisition. We work with them in lockstep to help them build their business. Upon completion of the programme, students not only have a network of peers but also a loyal customer base supporting their work and product.
One social enterprise that transformed its business model with Match Trading is REMO, a paint reuse and recycling organisation based in Cambridge. After Match Trading they boosted their income from trading by 71%.
"Not only did the programme help us to learn how to increase traded income and how to respond to that in an agile way, it also gave us the confidence to strategically invest in the development of the organisation via social investment and larger pots of capital based finance." Nikki Di Giovanni, Director of Business Development, REMO
REMO experienced not just incremental growth but a substantial increase in turnover, from £125K in 2017 to £263K in 2022. Read more about REMO and Match Trading.
Redefining economic development
Despite economic shocks, social enterprises remain resilient pillars within communities, surpassing the survival rates of private-sector SMEs. It’s now more urgent that policymakers and funders to take note of these successes and scale up support for innovative interventions.
The solutions are under our nose; we need brave policymakers to scale up the resourcing of these interventions at pace and ambitiously.
A fresh perspective on funding flows into the social enterprise market is now needed, as are pivots towards more impactful, community-driven approaches.
The time for action is now. Let's heed the lessons learned from our decade-long journey and pave the way for a brighter, more equitable future.
Collaboration opportunity
The Enterprise Grants Taskforce brings together funders looking to support the development of earned income across the sector. Find out more about the taskforce and how other funders can get involved.
