We made our first investment of £25k in Sunderland Home Grown CIC in June 2018. We think this is an excellent example of grant programmes, social investment and support programmes coming together to enable early stage social enterprises to develop and grow.
In June 2016 Sunderland Home Grown CIC (SHG) applied for a loan of £100k to help start up a community garden centre which would provide opportunities for adults with learning disabilities. We took a serious look at the proposal and were hugely impressed by the people involved, what they were trying to achieve and their plans for social impact.
Securing appropriate finance
However, in the end an investment did not happen. At the time repayable finance was not the most appropriate source of finance to support the start-up social enterprise. Not deterred, SHG approached Power to Change for grant funding and were successful, securing over £120k. This seed capital enabled SHG to build their income model around trading, service contracts and grant income. Each year, 30 individuals with learning disabilities receive support and benefit from the service and three local jobs have been created. The need to expand encouraged SHG to look again at repayable finance.
Grant funding, social investment and support programmes can work together to benefit early stage social enterprises.
Getting the right type of support
With support from the Reach Fund, SHG were able to put forward a convincing case for repayable finance with the help of an external support provider. A key part of the success of SHG was being able to choose their own consultant with specific market knowledge and social enterprise expertise. The focus of the support work was on repayable investment, added value and internal capacity building.
- Support programmes which are flexible and place social enterprises at the heart of the process can deliver added value to both social investors and social enterprises.
- Grant funding and repayable finance are often needed at different stages of a social enterprise’s organisational life cycle.
- Grant funding and grant dependency are not the same. Grants can be extremely useful and act as seed capital funding.
- The more grant funders, support organisations and social investors work together, the greater potential there will be to grow the social investment market. Collaboration means greater social impact and greater financial sustainability.