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Funding & Support critical to social enterprise growth

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Funding & Support critical to social enterprise growth

Here at CAN we’re proud to provide support and access to funding to help social enterprises grow and thrive.

But how important is support and access to funding for the sector? 

 


 In ‘The People’s Business’ published by Social Enterprise UK following a survey in 2013 it shows how critical these factors are to the growth of social enterprise organisations. 

 

In terms of skills and support the following were citied as barriers to sustainability and growth:

  • 32% - economic climate/recession
  • 18% - prohibitive commissioning/procurement with public services
  • 10% - Lack of marketing expertise
  • 6% - Understanding/awareness of social enterprise among public and customers
  • 6% - Government policy and change 

In terms of funding and investment the following were citied as barriers to sustainability and growth:

  • 39% - lack of, or poor access to, finance or funding
  • 17% - cash flow
  • 9% - affordability of finance 

With these challenges it is a true testament to the sector that at the same time 38% of social enterprises saw an increase in turnover compared with 29% of SMEs. 

These figures without question show the positive impact the social economy has on the UK economy as a whole, but it does also pose the question that should more support be provided to remove key barriers how much more could be achieved?

 

Andrew Croft, Chief Executive, CAN says:

"Social Enterprise is growing due to a change in society. Where once food was grouped by type it is now segmented based on how we treat the growers (Fair Trade) and how we treat the planet (organic) these changes in our supermarkets are due to consumer pull and an increasing awareness of the value that purchasing power can have in society.

The next wave of entrepreneurs and, increasingly existing ones, have a less Dickensian view of business and instead of maximising profit from which a small percentage can be “given back”(perhaps only slightly alleviating the impact of the initial business model), they are looking at more sustainable and socially beneficial business models that create profit and social value simultaneously.

Even present incumbent major businesses are seeking to find strategic alignment for social components with their core business as suggested by Michael Porter, as they seek to differentiate their products in highly mature and commoditised markets.

Social entrepreneurs will have skin in the game, have a passion beyond profit and are prepared to work for less to achieve goals in early stages which means they are more resilient. Critically in a time of changing societal attitudes they also have a USP that their products will give not only satisfaction and value but have a benefit to society.

Despite this growth and their advantages they still suffer from barriers to growth. At CAN we aim to support organisations to help them maximise their social impact, sustainability and (where appropriate) growth. We do this by addressing the three key barriers: Premises, Skills and Finance. 

There is still a disconnect between demand and supply side of capital with lenders seeking to provide capital in large chunks £150k to £250K minimum, secured at interest rates beyond the reach of most enterprises. The lack of an exit (IPO) for true Social Enterprises also limits risk capital making venture philanthropy such as our Breakthrough fund even more important."

 

Find out about our brand new concept CAN3 - helping organisations increase sustainability, impact and growth.

Category: Invest