Lottery Fund, Power to Change join taskforce to scale up grants for enterprise

ACF, School for Social Entrepreneurs and Access Foundation set up taskforce of influential funders, aiming to boost earned income through grants – billed “the missing piece in the finance jigsaw” – by building on success of match trading.

A group of influential UK funders has joined forces to help social enterprises and charities increase their earned income through grants. 

Members of the new Enterprise Grants Taskforce, announced yesterday, include the National Lottery Community Fund, Power to Change, the Esmée Fairbairn Foundation, Voice4Change England and the Association of Charitable Foundations (ACF).

The taskforce will define the scope and size of ‘enterprise grants’ in the UK – grants that help charities and social enterprises earn more income from selling services or goods, or that reward their trading growth. It will identify best practice in this approach and develop plans to scale it up. 

Boosting enterprise income is again a priority for the sector

Carol Mack - ACFCarol Mack, CEO of ACF – which represents some 400 UK grant-makers, and which is part of a steering group leading the taskforce – said supporting enterprise income made sense for foundations. 

“It can help build the resilience of the charities and social enterprises that funders seek to support by diversifying their income. It can also help make precious philanthropy go further by targeting grant income at activity which can’t generate earned income,” said Mack (pictured). 

 

Match trading success

The new group will build on the work of another taskforce, formed in 2018 to promote match trading. Originally developed by the School for Social Entrepreneurs, match trading grants reward charities and social enterprises that increase earned income year on year, with grants which match that increase. 

Research in early 2020 found that social sector organisations incentivised by such grants were increasing their income from trading at 2.5 times the pace of those supported by a traditional grant.

Covid-19 lockdowns – which hit many organisations reliant on trading income harder than those reliant on grants – led some to question whether trading for a social purpose was facing an “existential crisis”. 

However, the new Enterprise Grants Taskforce says that – given squeezed foundation budgets and no sign of public sector income growing – boosting enterprise income is “again a priority for the sector”. 

Enterprise grants are the missing piece in the finance jigsaw for trading charities, community businesses and social enterprises

 

Beyond binary options

Alastair Wilson, School for Social EntrepreneursThe School for Social Entrepreneurs and Access – The Foundation for Social Investment are also part of the steering group, which is responsible for the taskforce’s strategy and operations.

Alastair Wilson (pictured), CEO of the School for Social Entrepreneurs, described enterprise grants as “the missing piece in the finance jigsaw” for trading charities, community businesses and social enterprises. 

Social purpose organisations had for too long been offered the “binary” option of either grants or loans, he added. The adoption of match trading was “a clear sign of the emergence of a new market designed to support the trading endeavours of socially-minded entrepreneurial activity working in the most disadvantaged communities”.

Seb Elsworth, CEO of the Access Foundation, said enterprise grant making and social investment were “two sides of the same coin”: both helped organisations to boost their trading income and make more impact.

Top image: Spring Community Hub, which runs holiday clubs for children, and which started earning traded income with support from the School for Social Entrepreneurs. Photo courtesy of Spring Community Hub

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