Year Zero: understanding the impact of our funding

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A new approach has been developed to better understand the financial impact of our funding for community businesses. Renaisi's Mylene Pacot explains all.

Feb 8, 2022

Mylene Pacot

Mylene Pacot

Senior Project Manager, Renaisi

Community businesses trade for the benefit of their local community. They provide services ranging from community hubs, cafes, shops and pubs through to libraries and much more. They have positive social impact while also being financially sustainable.

Through funding programmes such as Trade Up and the Community Business Fund, Power to Change aimed to support them; yet how can we understand the financial impact that Power to Change has had on community businesses? The answer is not straight-forward, and programme impact can be difficult to isolate amongst a range of activities undertaken over a multi-year period by numerous community businesses.

In response to such a challenge, MyCake and Renaisi developed a data reporting approach to better understand the financial impact of funding and investment programmes on community businesses (and other trading organisations) – and called this the ‘Year Zero reporting approach’.

What is Year Zero reporting?

Year Zero is defined as the starting point of a grant funding programme, from which changes in key financial metrics can be measured. Applying a Year Zero transformation to the data provides clarity by creating a universal starting point from which the financial impact of the programme can be understood. It then becomes possible to look for trends in the data which might be attributed to grant funding.

Different milestones could be used as the ‘Year Zero’ in any given programme, and evaluators should select the most relevant one and provide a clear definition for it. This approach can allow funders and evaluators to clearly see the different trajectories in growth that community businesses experience before and after receiving funding. It can be particularly valuable when cohorts of grantees are homogenous, when programme funding is disbursed across several financial years, and when trying to compare programmes aiming to achieve the same goals through different intervention models.

About this report

This paper explains what the Year Zero reporting approach is and why it is beneficial. Itgives practical examples of its applications on the Community Business Fund and Trade Up programmes. It also provides guidance to funders and evaluators to decide whether this approach would be appropriate for other funding programmes going forward.