How can funders support early-stage community businesses?

Power to Change funded the Bright Ideas programme between 2016 and 2021 to support community groups to develop, test and launch their community business ideas. Renaisi’s evaluation outlines the impact that the programme had on community groups and early-stage community businesses, and recommends ways in which funders can support them going forward.

The Bright Ideas programme, funded by Power to Change and delivered by Locality, Co-operatives UK, Plunkett Foundation and Groundwork UK, aimed to help community groups develop, test and launch their community business ideas. The evaluation of the programme found that it was largely successful for the following reasons:

• Through flexible and tailored support from an Advisor and access to a grant, the programme helped community groups / businesses to develop their ideas in a range of ways. Most notably, Bright Ideas gave participants a better understanding of the community business sector, granted them access to funding and expertise, and supported them to better engage with their local community.
  • Bright Ideas supported most of its grantees to achieve their objectives: 95% of community businesses felt that they could move their idea forward thanks to the support provided by the programme and a further 84% felt that they achieved their main aim – which ranged from raising capital to achieving planning permission, signing a lease and trading. This was not only self-reported by grantees but also evidenced through scores given by Advisors to community businesses.
• Early-stage community businesses rely on one or a few leaders to turn an idea into a viable business. Crucially, the Bright Ideas programme helped build the confidence of those leaders, by building up their knowledge, legitimacy and expertise.

The above impact of Bright Ideas should also be understood in the context of certain key enabling factors and challenges. Enabling factors that supported the success of community groups and businesses included strong communication and marketing strategy, internal support and buy-in, a positive relationship with their Advisor, support from the local community and stakeholders and the ability to fundraise. Conversely, challenges included difficult team dynamics and a lack of support for the idea, a lack of capacity or issues with fundraising or trading.

Building on the successes of the Bright Ideas programme, further support will be needed for early-stages community businesses after the Power to Change funding comes to an end. Going forward, funders should take the four core actions described below.

• Continuing to support early-stage community businesses by giving them access to flexible and bespoke support from technical advisors, by facilitating peer-to-peer learning networks or forums for community businesses, and by providing support over the long term. Future programmes of support for community businesses should also be co-designed with them and with the programme delivery organisations.
• Give early-stage community businesses access to funding, since a key challenge they faced was fundraising. Access to core funding, in particular, would support groups to operate during the early stages of their journey and contribute to their long-term stability. Support could also be given to integrate traditional income streams with social finance options such as crowdfunding or community shares.
• Make Bright-Ideas-style funding accessible to all, as more can be done to ensure marginalised groups, rural communities and younger audiences can access funding to develop their community business ideas.
• Influence the wider ecosystem, as the support of stakeholders at local levels creates an enabling environment for early-stage community businesses. This could involve building partnerships with private sector organisations or professional trade associations, mobilising local influencers and community gatekeepers, and advocating at Government / policy level.