How can funders support established community businesses?

The Community Business Fund (CBF), funded by Power to Change from 2016 to 2021 and delivered initially by UMi and then by the Social Investment Business (SIB), aimed to support existing community businesses to progress towards greater self-sufficiency. 

The evaluation found that CBF was a successful programme, in that it supported its grantees to either: (i) increase the value of their capital assets – by acquiring new assets or increasing the value of existing physical assets, and by covering running costs; and / or to (ii) increase their trading activity.

This was possible through the provision of revenue and capital grants, and thanks to a flexible approach to grant management. In addition to such financial support, peer brokers, when paired well, helped community businesses better understand their communities’ needs, identify the strengths and gaps of their business and improve certain processes (e.g., around impact and evaluation).

The success of community businesses on the CBF programme was also influenced by certain internal and external factors, such as business models and planning, leadership, community and stakeholder engagement and access to funding.

After Power to Change’s funding comes to an end, more support will be needed to continue supporting established community businesses towards self-sufficiency. Going forward, funders can build on the CBF experience by taking the following core actions:

• Continue making large grants aimed at community businesses, giving them access to blended capital and revenue grant funding. Access to both capital and revenue grants enabled community businesses to invest in or grow fixed assets while covering other costs related to income generation.
• Continue supporting and funding capital projects in a flexible and relational way. CBF grantees have greatly benefitted from the flexibility within Power to Change’s grants, as this helped them manage the risks and uncertainty that is often involved in acquiring new assets.
• Advocate for community businesses as a vehicle for social impact. CBF grantees and peer brokers felt that greater awareness of the community business model was still needed, and that funders were well-placed to make the case for community businesses as a sustainable model of social change.
• Maintain platforms for peer support and learning. While some community businesses found peer brokerage difficult to engage with, there was a general sense that it was valuable. Funders should continue encouraging peer support, while building on the lessons from CBF to pair peer brokers and community businesses at best (i.e., taking regional similarities and community business structures into account for pairing)