A blog from our CEO Sue // "My reasons to be optimistic about 2018"
On behalf of everyone at Action Hampshire, I wish you a very happy, productive 2018! At this time of year, we often look for reasons to be optimistic about the 12 months ahead and I can already see some positive signs.
At the end of 2017, the Government published its long awaited response to the House of Lords Select Committee’s report on Charities. The response contained several important points:
- there are plans to consult on the government’s new Civil Society Strategy in January 2018
- the government also reaffirmed its commitment to the Compact (this is doubly good news as many people may not have realised that the Compact was actually still in existence).
- the government also said that a crown representative for the voluntary sector would be appointed “in due course” and that a “big part of their role” will be addressing the barriers to public sector delivery. (Before we get too carried away with all this good news, the government also announced its intention to appoint a new crown representative last December and, I believe, this post has been vacant since 2014).
In case you don’t know, Crown representatives manage the procurement relationship between government and suppliers. However, it is debatable how much the absence of this person can account for the current relationship between the Government and some parts of the not-for-profit sector.
The biggest single issue for not-for-profits in 2018 will continue to be fundraising. We expect fundraising to remain extremely challenging for 3 main reasons:
- grant streams are hugely oversubscribed and rising inflation and more stagnant pay packets may mean constrained public giving
- public sector commissioning may also remain focused on larger- size contracts, excluding many not-for-profit organisations from even being able to bid for such work. (A recent Lloyds Bank Foundation report found that small and medium-sized charities have lost up to 44% of their income from public bodies)
- additionally, a significant number of those contracts are funded through European programmes and may now have a limited shelf life
However, there is some good news coming from social enterprise organisations in our sector. Social Enterprise UK’s State of Social Enterprise Report is the largest, most representative survey of social enterprises in the UK survey. The 2017 survey showed that
- 71% of social enterprises surveyed either broke even or made a profit, with 74% of them generating more than three quarters of their income from trading i.e. selling good & services.
This is why we believe that, 10 years into economic austerity and with no obvious end in sight, generating your own income from trading is the best way forward for many, maybe most, not-for-profit organisations.
We cannot rely on the government – national or local – to fund our work. Even where there is still funding for the Sector, it often comes with more proscription and conditions. Any income that we generate from trade is unrestricted, which means it enables us to address the need that is there, not the need as specified by a commissioner.
Social enterprise and trading may not be for everyone and it is not always easy – nor is it a response to a funding crisis. It should be a planned part of a wider financial strategy, applying business principles to meet our charitable or social mission.
Social enterprise is not becoming a business and forgetting about our charitable mission, it is about using business techniques to achieve it.
One great example comes from Hackney Community Transport, which has grown from a local community transport provider with 2 minibuses and a few volunteer drivers in the 1980s, to a large scale social enterprise with over 1000 employees, a fleet of 625 vehicles serving London, Yorkshire, the Southwest, the Northwest and the Channel Islands, and in 2016/17, a turnover of £49.6m. In their own words: “We do not do this to create shareholder value. We do this to create community value”. They are still called Hackney Community Transport and still deliver local community transport.
While not everyone has the capacity or desire to grow to this size, many of us do have the capacity to be as independent as Hackney Community Transport and generate our own income to achieve our own charitable or social purpose.
Action Hampshire is a leader of social enterprise in Hampshire. We specialise in supported new and aspiring social enterpreneurs. Action Hampshire hosts the School for Social Enterprise Hampshire and delivers the Inspiring Enterprise programme and Community Business Trade Up programme.
To find out how we could help you make your social enterprise idea into a reality, contact Sandie Davis