Social Enterprise is not about getting grants. I know this because I’ve read Business Link’s advice and I’ve been to lots of social enterprise conferences. At some conferences you’ll have one speaker telling you that social enterprise is the best way for charities and community groups to avoid the uncertainty of grant dependency, another speaker saying that groups have no choice because in a few years there’ll definitely be no grants at all, and a final speaker introducing the government’s latest part-grant/part-loan scheme designed to create social enterprises that can sustain themselves without applying for grants.
Aside from the part-practical, part-philosophical question of whether you can turn a charity into a social enterprise – or, in fact, whether many charities are already social enterprises in the first place – the general expert spin on grants is a bit silly. The recession does mean that 2010/11 will be harder than 2008/9 but, in a general sense, the reality is that the current climate for grant funding in UK is extremely good when compared to 20 years ago when The Big Lottery Fund, for example, did not even exist.
I’d be very surprised if there’s ever been a better time for not-for-profit community organisations – which is what most social enterprises in the audience at conferences actually are – to be applying for either one-off project-based grant funding (funding provided to do a specific thing, achieving specific outcomes) or start-up funding for new projects.
What has changed over recent years is the political situation regarding funding ongoing local provision. Where once you might have been able to get £40,000 a year’s funding just for being the Bloggs Street Community Centre and doing good things, you now won’t. If you have a day centre where people with mental health difficulties just turn up, chat, have dinner and go home, you’re now unlikely to get the funding from your local PCT to pay for two workers to supervise this. If you want the council to fund your community centre then just leave you alone to get on with community activities, or you want your PCT to fund your day centre to just be there and provide dinner, you’re now out of luck. Rightly or wrongly, all major political parties are now actively hostile to this approach but that doesn’t necessarily mean that the answer is ‘trading activities’.
There may be sound reasons for the Bloggs Street Community Centre to open a healthy café for local residents. The may even be sound reasons to turn a day centre into a social firm producing hand made designer hats. But neither of these operations are likely to be sustainable in the long-term without being subsidised by some outcome based grants. And, in both cases, it highly likely to be far easier for the organisation to raise project-based grant funding for activities similar to what was being done in the first place and not start the businesses at all.
None of this is an argument against starting social enterprises – if they really are businesses benefiting the community through both their products and their processes, then the additional positive impacts are clear – but it is a suggestion that the idea of social enterprise as a way of directly replacing disappearing grants is one that needs to be challenged.