Two recent reports have reflected on the effectiveness of "investment readiness" support for charities and social enterprises.
Last month saw the evaluation of year three of the £10m Big Potential Breakthrough programme. The programme was delivered by a partnership led by Social Investment Business and funded by the Big Lottery Fund. It aimed to help charities and social enterprises work out how social investment could help them become more sustainable, build their capacity and scale-up to deliver greater social impact. In particular, BPB supported organisations that were considering raising less than £500,000. Participants had access to diagnostic tools and one-to-one support, as well as grants of between £20,000 and £75,000, principally to buy in external support.
But how do you judge the success of a programme such as BPB?
The report suggests it met a need in the sector. The programme’s website had nearly 120,000 unique visitors, nearly 1,000 organisations had attended a BPB event and more than 650 had received one-to-one support.
It also seems to have reached organisations smaller than those that typically would be considered candidates for social investment, with an average turnover of £255,000 and 71 per cent operating at a community, local or regional level.
In terms of hard numbers, the £6.6m of grants awarded to 221 organisations within the period covered by the evaluation resulted in £2.8m of investment raised by 17 of those organisations.
As the report makes clear, many of the organisations funded by the programme are still working on their plans, so it will be several years until it is clear how many of the grant recipients have gone on to raise investment.
A more fundamental question, though, is whether leverage of investment raised is an appropriate measure of success for a programme seeking to help organisations become more sustainable. Social investment, after all, is only one tool that can lead to greater sustainability, but is not synonymous with it. For some grantees, exploring social investment in more detail has shown them that it is not right for them, and they have been able to secure other funding to drive growth and scale. That is surely good news.
Feedback from the participants was broadly very positive, with organisations reporting positive impact from the programme in areas of governance and leadership, market analysis, strategic planning and social impact measurement – all necessary for building capacity and scaling impact.
Given this, the report concludes that sustainability should be the key outcome sought from these interventions.
BPB is part of a much broader portfolio of "readiness" programmes that SIB has managed over the past decade, totalling more than £40m of grants to 677 organisations. Last week SIB published a review, Strength in Numbers, identifying the broader themes and lessons from these programmes.
The headlines are that those grants have unlocked £1.1bn of contracts – with a few outliers – and £95m of investment for the sector.
But beyond the numbers, SIB is also looking for greater meaning in this work. Fundamentally, it argues that these programmes help to build resilience in the sector. Indicators of growth and investment are positive consequences – or, perhaps, enablers – of this resilience.
The report is packed with lessons for future programmes, such as the need to ensure there is flexibility in programme design, the importance of building a constructive relationship with providers, ensuring that charities have the internal capacity to drive change through and that support is available over the long term.
On the publication of the report, SIB’s chief executive, Nick Temple, called for the phrase "investment readiness" to be retired. I couldn’t agree more, if only for the simple reason that it implies receiving investment is somehow an objective for charities or social enterprises.
A more likely objective for organisations in our sector is resilience, and the kind of support that these programmes have delivered is central to helping to build a more resilient sector. Future programmes seeking to build the capacity of the sector must learn from these important programmes.
Defining resilience is hard. SIB links it to adaptability, flexibility, sustainability and, in particular, responding to changes in income. In the current climate exploring opportunities to develop earned income and build more enterprising activity is one important route to resilience, and one that future programmes should address. It is also an area where social investment can help, but as a tool and not the goal.
Seb Elsworth is the chief executive of Access, a foundation that helps to widen access to social investment for charities and social enterprises