Match Trading spreads – and could significantly boost earned income
Some 600 UK-based social enterprises could benefit from new-style incentives to boost their trading income – with early data suggesting such programmes could dramatically boost their earning capacity.
Developed by the School for Social Entrepreneurs (SSE) and first piloted in 2015-16, so called 'Match Trading' rewards selected businesses by matching year-on-year sales growth, pound for pound. The idea flips traditional grant funding on its head by using the promise of grants to incentivise a focus on earned income first. This aims to avoid the trap of dependency on early-stage grants. Participants also get training and one-to-one support from a grant manager.
The concept is still fairly new. But data released last week from SSE’s Community Business Trade Up 2017-18 programme, which was funded by charitable trust Power to Change and offered businesses up to £10,000 in matched funding, show promising results. The 19 participating businesses achieved a typical 92% increase in income from trading compared to the year before, while a control group of 10 businesses – who were given a £10,000 grant and the same learning sessions but no Match Trading grant – achieved a typical increase of 19%. For those receiving Match Trading grants, income from trading as a proportion of total income increased from 73% (baseline year) to 87% (programme year); the control group showed no change.
Among the participating businesses was Halton Mill, run by Green Elephant Cooperative in Lancashire, which offers studio and office space as well as classes, performances and events. Director Fiona Frank said the Match Trading grant and training helped them to take risks and try new things: “We trialled a new learning programme, put on more events ourselves and produced a brochure for the first time, which has really increased our profile. Not everything worked, but it gave us a much better idea of what does work for the business.” Halton Mill’s trading income grew by £26,000 during the year (an increase of 37%), meaning the business is no longer reliant on grants to cover running costs.
We trialled a new learning programme, put on more events ourselves and produced a brochure for the first time, which has really increased our profile
Carol Mack, CEO of the Association of Charitable Foundations and chair of a Match Trading task force gathering funders, Office for Civil Society representatives, local authorities and academics, said the results were “still early days” but that such grants “could play an important role in developing the sustainability of community businesses and social enterprises.” She also highlighted the Government’s Civil Society Strategy published in August which referred to ‘grants 2.0’, saying: “This is a superb example of the type of flexibility that grants can offer.”
Alastair Wilson, CEO of SSE, said: “We’re really pleased to see that Match Trading grants and learning programmes are having such a positive impact on community businesses… Match Trading grants are by no means a silver bullet but initial data from both the pilot project and the Community Business Trade Up programme in partnership with Power to Change is showing that this type of funding is helping to build more sustainable business models.”
The dataset so far is small, but SSE will soon have more insight into what works. A further 100 businesses are participating in the 2018-19 Community Business Trade Up programme (80 receiving Match Trading grants, 20 as a control group). SSE is also delivering similar programmes including with Lloyds Bank and Big Lottery Fund (reaching 440 businesses); with Access - the Foundation for Social Investment (focusing on homelessness and youth and open to 40 organisations); and with Rank Foundation (from 2019, for 20 businesses in Plymouth). The Enterprise Learning programme supported by Access is open for applications until Wednesday 31 October.
Photo: ©Halton Mill, Green Elephant Coop
Watch an animation about Match Trading created for SSE by Pioneers Post’s sister agency Fable Bureau here.