Chris Dadson, Head of Business Development, explains what our recently released research report - Strength in Numbers - tells us about the state of investment and contract readiness for charities and social enterprises and how support programmes need to adapt to the needs of the sector.
As you may know, we have managed programmes over the past six years such as the Investment and Contract Readiness Fund and Big Potential which aimed to help charities and social enterprises raise investment, win contracts or figure out how social investment could work for them.
In total, these programmes have distributed £40.5m of grants to 677 charities and social enterprises. Nearly a third of them – 245 – have already gone on to raise investments or win contracts worth a total of over £1 billion.
We can only learn so much from the numbers though so we wanted to delve a bit deeper to understand more about what the funds did and how similar programmes could be improved in the future.
We interviewed over 50 people involved in the programmes from applicants to providers, investors to commissioners. We held a series of workshops across the country with people who had applied to a fund to get their thoughts. And we looked at the figures to see what we could learn from the application and financial data.
You can read the full report here but our key takeaways are:
- We need to put the needs of charities and social enterprises at the centre of the future programmes by focusing on improving resilience, not just getting them ready for investment.
- We must find new ways to embed knowledge within charities and social enterprises and reduce their dependency on grants and external providers through better peer-to-peer support and use of data.
- We should design new programmes based on what we know works. This means delivering multiple interventions and combined packages of support that are built on long term relationships.
- We must take more account of the wider system in which charities and social enterprises operate. This means more focus on markets, commissioning and the lived experience of the people we exist to support.
This leads us to the key recommendation of the report; it is time to scrap the term ‘investment readiness’ and adopt a new approach to support programmes for charities and social enterprises.
Now this is not meant to be a negative assessment of the programmes and the outcomes they’ve helped to achieve. Far from it. Hundreds of fantastic charities and social enterprises have been assisted to raise investment or win contracts that have helped them change the lives of the people they work with.
However, we must recognise that we could be more helpful if we didn’t frame support around a singular outcome – raising investment. I recognise we’re not the first people to say this. Seb Elsworth of Access has written about it. Phil Caroe of Allia has tweeted about it. This is not rocket science but we think it needs saying.
We tried to be nuanced when talking about programme objectives in the past and built structures – such as Preliminary grants in Big Potential Breakthrough – that were explicitly intended to not be about directly raising investment. However, if you’re still using the words ‘investment readiness’ then your efforts can only be so effective.
We’ve already started to walk the walk. We’ve made changes to how we describe the Reach Fund so that it’s obvious what the purpose of the fund is. We’ll also adopt a similar approach for future programmes.
And now the review has been completed the hard work really begins. We think that focusing on resilience is the most valuable way to support charities and social enterprises. Therefore, we need to be really clear about precisely how we define resilience. And what the best ways to support it are. This comes next.
For now, we hope you find this report useful and it prompts a few conversations you might not have had before. This is the start of a new journey for Social Investment Business and we’re looking forward to the next steps.