Ellora Kowalczyk on the Enterprise Development Programme cross-sector conference
Charities and community-based organisations tend to rely on traditional grant funding as their main income, which contributes to an unequal relationship between funders and charities. However, a cultural shift within the charity sector is taking place. Enterprise development and Social investment gives charities and organisations greater agency over their finances, thus shifting power to the people. This bottom-up approach allows organisations to move toward a more resilient and flexible financial model.
The Enterprise Development Programme (EDP), funded by Access, aims to empower charities to diversify their income to include profit generating initiatives. Funds generated from trading increases agency and resilience as it can act as a source of core funding for charities, thus reducing reliance on grant funding and creating a more equal balance of power.
In September 2023, we held a Cross-Sector Celebration of the EDP, co-organised with the brilliant partners that have made this programme possible; including Access, Association Of Mental Health Providers, Groundwork, Homeless Link, Social Investment Business, The Ubele Initiative, and YMCA George Williams College.
The impact of the EDP was elegantly summarised by Jordon Canter from Arc. At Arc, a homelessness charity, their social enterprise allows service users to step into employment with support. Jordon emphasised that the homeless people they work with would have fallen through the cracks again if it hadn’t been for their social enterprise, Crescent Cleaning Services.
However, this cross-sector conference was not just about celebrating the work that has taken place through the EDP, and the subsequent positive impacts. It was also about creating space for community, togetherness, and ideas for improvement. As ‘the EDP isn’t just a programme, it’s a community of people’ – Soizic Hagège, from YMCA George Williams College.
Meet the funders – ‘It can be difficult to speak truth to power.’
This discussion, chaired by Murphy Hopkins-Hubbard from Homeless Link, explored social investment models which move away from the traditional philanthropic model. The session looked at how they can contribute to a shift in the power dynamics between funders and organisations, but also recognised that such models do not in themselves eradicate systemic barriers that charities and organisations face when applying for social investment.
Adrian Bean, from Key Fund, explained that social investment is not appropriate for everyone! Nevertheless, organisations should have the option to decide, and therefore education and understanding of social investment should be available and accessible to all. Key Fund empathised that making big decisions by yourself can be scary and isolating, so increasing awareness and offering support increases confidence.
Robin Chu, from School for Social Entrepreneurs, built on this. He said that a benefit of social investment is that it is long term, and the money is less restrictive. This reduces the need for organisations to bend their beliefs and knowledge to fit the wants of the funders, as it can be difficult to speak truth to power. Robin also questioned how we can continue to increase power and agency back to the groups on the ground.
The inaccessibility of funding applications was a focus during the session, with several organisations sharing the difficulty they face with jargon and feeling hesitant with their answers during applications. This particularly impacts organisations who employ service users or are volunteer run. The panel highlighted that picking up the phone and having an honest conversation with funders can be helpful. There was also acknowledgement of the racial barriers Black and Minoritised led organisations face. In response, Ishita Ranjan from Good Finance shared that she is creating a document that will help alleviate the lack of industry standard for how to best obtain social investment by explaining how funders decide who they will invest in.
Journey to an enterprise mindset
Tim Soule and Rijia Begum, from Social Investment Business, asked the following questions to organisations that participated in the EDP:
- Where did you start with your enterprise ideas and where are you at now?
- How has EDP helped you get to this stage?
- What are your future plans for developing your trading income further?
You Be You are an organisation that work to empower young people in minoritised communities. During the COVID-19 pandemic, when schools were closed, the EDP supported them in adapting their product into packs that were delivered to homes. This helped them grow from working with one school to 15. You be You are now selling corporate workshops as part of their enterprise and wish to continue to develop this. They spoke about their fears surrounding social investment due to the potential financial gamble, ‘especially when you’re small’. Several other organisations expressed similar worries about transitioning from being heavily grant funded to applying for loans – when it comes with a grant, it’s easier to take a risk.
Tim and Rijia shared some advice: social investors lose money if they are not lending it out. Therefore, social investors need you at least as much as you need them! There is a different, and more equal, power structure when working with social investors in comparison to a traditional funder.
This session resulted in a range of practical suggestions to help empower organisations further. For example, a step-up programme where charities/organisations can practice applying for and using social investment loans with low risk. Similarly, the possibility of developing collaborative models to increase confidence when talking to social investors was discussed. This resonated most with Black and Minoritised led organisations, who highlighted the systemic barriers and biases they have faced when applying for loans.
The British Youth Council shared that their enterprising journey began by selling consultancy and training work. The profits from which are used to fund other projects within the organisation. The EDP helped to fund a staff salary for a person to be responsible for the social enterprise arm of the organisation. This helped boost time and resources given to selling their services, resulting in them doubling their enterprise income by the second year.
One organisation described the challenges they are facing as being in a ‘weird grey area’, where they need to grow the enterprise to employ more staff, yet more staff are needed to develop their enterprise activities. Other organisations also shared troubles with securing more resources for the enterprise sector of their charity/organisation.
Tim and Rijia responded with ideas for persuading board members to increase funding for enterprise development within charities and organisations. They suggested that together we need to improve how we tell the story of a journey to enterprise. It is important that this story highlights the excitement and potential that enterprise can bring, alongside an increase in agency for those on the ground and a way to push back against current unequal models for funding social change.
Diversity and inclusion – ‘The problems that were there then, are still here now’
This session, chaired by Jacy Stewart from The Ubele Initiative, was a reflective way to conclude the day. Swati Pujari from Pathway Fund explained the need for focussed funding to go towards Black and Minoritised communities and enterprises. The existing wealth gap in the UK between white British communities and Black and Minoritised communities is why organisations, like Pathway Fund, are extremely important to help bridge these gaps through directing grants and investment into Black and Minoritised communities. Pathway Fund announced that they are launching an enterprise development programme with NowNow, and will be working with 12 UK based Black and Global Majority-led organisations to support them through their enterprise development journey.
Whilst social investment capital is reaching Black and Minoritised led charities, there is still an imbalance in funding and momentum is falling. Patricia Hamzahee, founder of Integriti Capital, reflected that after the murder of George Floyd in 2020, an interest in helping Black communities suddenly grew. However, this interest, in breaking down walls of racial discrimination, is decreasing. She discussed the related importance of Community Development Finance Institutions (CDFIs) – which started in America to combat the red-line and is now slowly growing in the UK. CDFIs are social enterprises that provide financial resources and support to communities that are underserved by traditional financial institutions. They exist to increase financial opportunities and reduce the wealth gap. Black and Minoritised led charities and organisations are often excluded from mainstream grant and investment opportunities. CDFIs combat this by providing loans, financial services, and educational resources to increase funding opportunities. This prioritisation of money and resources empowers Black and Minoritised led organisations and thus the communities they work with.
Whilst the Diversity and Inclusion session primarily focussed on discussing increased access to funding for racially minoritised communities, funders and social investors must take a pan-equality and intersectional approach to be truly inclusive. Systemic ableism is a barrier that is often last on the list in discussions about diversity and inclusion – this was voiced during the conference. We are making great steps towards diversity and inclusion, but it is important to acknowledge that there is much more to be done. The role of intersectionality must also be given a higher priority. An intersectional approach addresses the different types and layers of barriers that people with multiple protected characteristics face. Additionally, programmes, such as the EDP, need to consider the intersection between deprived areas and protected characteristics.
Conclusion – Continuing the journey to enterprise
This cross-sector celebration of the Enterprise Development Programme showed the value of a well-rounded programme that goes further than just giving money to charities and organisations. The EDP illustrates the importance of patience, space for learning and room for making mistakes. This conference centred the importance of community and continued learning, and most importantly, the people and communities that we are collectively trying to help. The EDP helps to build financial resilience for charities and organisations, which in turn builds resilience for all people, as ‘at the end of the day, we are catching people, who, with the current systems, would fall through the cracks otherwise’ Soizic Hagège.