Social enterprises in the UK are vital in the pursuit of a social welfare, their sustainable generation of funds helping solidify the benefits that communities receive far into the future.
These organisations have shown immense potential in driving societal change and have contributed significantly to the economy in recent years.
Grants play a crucial role in amplifying their impact, providing the essential funding needed to tackle complex social issues.
In this article, we’ll review the growth of these businesses, their impacts, and the ways in which grant funding makes a big difference in assuring their ongoing success.
The Growth of Social Enterprises in the UK
The social enterprise sector in the UK has shown significant growth over the last few years and plays an increasingly vital role in the economy. In fact, many new organisations have been established as a result of the challenges brought by the pandemic.
According to Social Enterprise UK, there are currently around 131,000 social enterprises in the country, generating a collective turnover of approximately £78 billion and providing jobs for 2.3 million people.
What’s more, 33% of these organisations have only been established between 2020-2023, illustrating just how fast the sector is growing.
More data from SEUK is as follows:
- 19% of these organisations’ core mission relates to addressing climate change.
- 65% have plans for reducing greenhouse gas emissions.
- 70% made a profit in 2022.
- Around 33% of community healthcare providers are social enterprises.
- 58% have leadership teams consisting of at least 50% women and 43% have at least one leader from an ethnic minority background.
- 83% said that buying socially and environmentally friendly products is more important than cost.
- 84% are real living wage employers.
- 22% operate in the UK’s most deprived areas. (In fact, they tend to perform better in deprived areas (in terms of turnover and employment levels) compared to in wealthier regions).
The Impacts of UK Social Enterprises
Social enterprises create many positive changes by reinvesting their profits, such as improved social cohesion, enhanced community welfare, and stronger local economies. Here are a few examples of success.
Auticon
Auticon is a social enterprise helping autistic individuals find employment. Typical social and workplace norms/expectations present a true barrier to many individuals with autism and other neurodivergent conditions.
In spite of the fact they may be highly trained in their field and extremely competent, the unemployment rates among this demographic are high.
The founder of Auticon was inspired by the desire for his autistic son to have better opportunities. He founded the organisation in Germany in 2011 after receiving investment from a social investment fund.
Their UK operations began in 2016 and they now employ more than 450 autistic individuals on full-time contracts in 14 countries (with large organisations such as Deloitte, PwC and BMW).
Another way they reinvest funds is by advocating for culture change surrounding neurodiversity.
Here are some more figures to illustrate their impact:
- 91% of consultants believe they’re valued for who they are.
- 92% feel supported at work.
- 87% stated that their quality of life improved since joining.
- 93% of hiring organisations said that consultants had made valuable contributions to projects with greater accuracy and efficiency, and that they brought more innovative approaches to the table.
Homebaked Bakery
The area of Anfield, Liverpool, was hard hit by difficult economic challenges in the early 2000s. Within the community was Mitchells Bakery, which was known for selling pies to locals and to football fans on match days.
As the area continued to struggle, the business was forced to close. However, some residents found a way to save the bakery while using it as a vessel for supporting and developing the community.
Initially, they started renting the space out and it became an area for public discussion about the community’s future. A plan formed to turn it into a social enterprise known as the Homebaked Bakery Co-operative, which was founded in 2013.
The bakery continued to sell goods while becoming a community hub and a provider of training courses. A community land trust was also set up to support its development. They now employ 16 people and see revenues of around £500,000 per year.
Since they were no longer struggling to stay afloat, they were able to subsidise the prices of their pies and other products using income from match day. This made a difference for residents facing financial hardships, especially during the pandemic. They also supply bread, pies and other goods to local foodbanks and arrange the free delivery of school meals.
How Do Grants Benefit Social Enterprises?
Amplifying Impact
The stability that grant funding provides enables these organisations to scale their operations without compromising on their social objectives.
Many social enterprises start with a strong mission but limited access to capital, and so grants provide the critical funding needed to get these projects off the ground or to scale existing initiatives without the immediate pressure of returning investor profits. As such, this type of funding allows social enterprises to focus on innovation and long-term community benefits.
Consider this hypothetical example of a business looking to tackle homelessness. Perhaps grants could help the organisation not only address the immediate needs of the homeless community, but also fund programs that address the underlying issues leading to homelessness, such as lack of education, unemployment, or mental health support.
As for some non-hypothetical examples, the Reach Fund supplies grants ranging from £5,000 and £15,000 to help UK social enterprises and charities secure further investment. There’s also Resonance, a fund helping both types of organisations acquire additional property that’s needed for them to carry out their work.
Providing Financial Stability and Resilience
When the economy is volatile, social enterprises need a sturdy financial core to sustain their operations and stay resilient. Grants provide this stability, allowing organisations to continue their critical work despite external influences. As such, it’s a good idea to give more grants during a recession.
This is especially crucial in deprived areas where employment opportunities may already be scarce, let alone during a downturn. In such scenarios, grants help keep more people in employment, supporting the organisations until the storm has passed.
In addition, the financial assurance that grants bring enables investment in capacity building and infrastructure, ensuring that enterprises can expand their reach and increase their impact without the pressure of quickly generating revenue.
Developing Partnerships and Collaboration
Grants also assist in the building of networks within the social enterprise sector, and funders can encourage collaboration between grantees for knowledge sharing purposes, increasing the overall impact of their investments.
This approach helps unify various stakeholders around common goals, such as reducing environmental impact or improving public health, thus creating a more coordinated effort in tackling these issues.
Partnerships often extend beyond social enterprises, involving private companies, government bodies, and non-profits, bringing varied expertise and resources to the table.
Such collaborations can lead to innovative solutions that might not emerge in isolation, ultimately driving forward the social enterprise sector and enhancing community benefits.
Enabling Research and Innovation
Grants are particularly helping for supporting research and pilot projects, allowing organisations to experiment with new ideas and technologies without the risk of financial losses. Such initiatives are essential for innovation in fields such as sustainable technology, where upfront costs and risks can be high.
Consider a social enterprise using grant funding to develop a new recycling technology. The project could lead to significant environmental benefits and, if successful, the technology could be scaled up with further investment, vastly contributing to a more sustainable society. Without grants, such high-risk yet high-reward innovations might never move beyond the conceptual stage.
Conclusion
In summary, the number of social enterprises within the UK has grown dramatically over the past few years, not only furthering social projects in many areas, but also making a sizeable contribution to the economy.
Grants funding can be a game-changer for these organisations, providing stability, expanded operations, and encouraging collaboration and knowledge sharing. They also serve as catalysts for innovation, helping vital projects get beyond the conceptual stage.
The expanding influence of social enterprises marks a bright trajectory for the future of socially conscious business.
At Fluent Technology, we provide innovative grant management software that’s trusted by some of the UK’s largest funders. To learn how it can boost efficiency throughout the grant management lifecycle so you can funnel more resources into your mission, contact us today and request a demo.
