Funding story: Social enterprises

Social enterprises are trendy. So why are so few third sector organisations applying for grants to start them up?

Social enterprises are, to put it bluntly, the flavour of the month. The main political parties are fighting over who gets to be a bigger social enterprise champion. The Office of the Third Sector has made £3m available to boost the voice and reach of the social economy, and a new programme of 'ambassadors' featuring the likes of Penny Newman, chief executive of Cafedirect, will help spread the glad tidings of social enterprise and all its associated rewards. In a letter to The Guardian on 9 August, Stuart Etherington, chief executive of umbrella body the NCVO, said: "Social enterprise and the voluntary sector are not separate but intrinsically linked".

Given this hype and the wider emphasis on ethical living and consuming, you'd be forgiven for assuming that a lot of third sector organisations would be applying for grants to start up social enterprises of their own. However, this isn't the case.

"Good applications are few and far between," says one funder who - like most people Third Sector spoke to - preferred to remain anonymous. Even Graham Collins of NCVO's sustainable funding team agrees. "We have no hard evidence but, anecdotally, we hear that funders aren't receiving that many good applications," he says.

"People think of social enterprise as income generation, and don't automatically think grants might enable them to do it. Maybe it's a mindset they ought to look at."

Given that grants are such a crucial element of many funding mixes, it's rather odd if this is the case.

Another funder comments: "Most applications are aspirational. They have very high hopes and plans, but there's no convincing sense that they're actually going to achieve them. There's often very little detail in the planning: the forecasting is weak and the market research is often non-existent. The ones that have succeeded are the ones with genuine niches - and those that win 'social enterprise of the year' prizes are often just well established charities."

The ambassadors have a lot of work on their hands - starting, perhaps, with providing a clearer explanation of what exactly a social enterprise is supposed to be and how third sector organisations can take up this model.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Already registered?
Sign in

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Follow us on:
  • Facebook
  • LinkedIn
  • Twitter
  • Google +

Latest Jobs

RSS Feed

Third Sector Insight

Sponsored webcasts, surveys and expert reports from Third Sector partners


Expert Hub

Insurance advice from Markel

Cyber and data security - how prepared is your charity?

With a 35 per cent rise in instances of data breaches in Q2 and Q3 last year, charities must take cyber security seriously

Third Sector Logo

Get our bulletins. Read more articles. Join a growing community of Third Sector professionals

Register now