Unity in diversity: Learning from the Community Business Fund
Since 2016, Power to Change has awarded over £22 million to over 120 community businesses across England through its Community Business Fund. Successful applicants receive a grant between £50,000 and £300,000 to develop their business and become self-sustaining. Alice Thornton, Head of Learning at Renaisi, reflects on the Community Business Fund’s interim evaluation report they conducted.
The Community Business Fund is a funding programme to support the sustainability of community businesses. So far, so simple. But what makes it interesting and unusual – as well as difficult to evaluate – is that community businesses are diverse and not a coherent ‘sector’ in the sense of having common products, services or customer base. There is no typical or average community business model. For Power to Change, this creates a challenge: to offer a high-volume fund that provides large grants to hundreds of businesses, and is able to respond to their varied investment needs.
Given this context, our first task was to describe and analyse the cohort of organisations supported by the Fund in a way that respects their variety, but also enables us to say something meaningful about their collective role in the social economy (Section five of our report describes our approach). Four of our findings stood out in this first phase of the evaluation:
- It’s impossible to generalise about the impact community businesses have on people and communities as they are so diverse, however it is possible to identify six main drivers in the ways that community businesses create impact.
1.Creating space for community – “When you come here you know you can talk to someone and chat to someone.” Community business visitor
2. Creating employment opportunities – “We give young people employment so that they can stay [in this town]. Often young people here have to move away because there aren’t that many opportunities here.” Community business leader
3. Promoting wellbeing through volunteering – “The Centre is very important to me. It has given me a new lease of life.” Community business volunteer
4. Delivering activities, projects or services – “The local area is getting gentrified so it is important to keep prices low [for longer-term residents]. We have lots of free activities for everyone.” Community business leader
5. Improving places – “People say that we’ve saved this community, over all these years. We’ve made a massive contribution to creating a sustainable community with jobs, education and eating into the poverty of aspiration.” Community business leader
6. Fostering a sense of ownership, pride and empowerment – “I like the fact that it is community run. I want to buy my children shares so they can own a part of it.” Community business visitor
These drivers are significant because, whilst they do not describe all the impacts that community businesses achieve, they do give an otherwise diverse cohort some areas of commonality. They also raise the question: how far are these drivers unique to community businesses, compared to other models used by the social sector?
2. A substantial number of community businesses supported by the Fund have a ‘hub’, i.e. a space for people to meet and socialise and/or for other organisations to hire, for example Burton Street Foundation in Sheffield, The Florrie in Liverpool and Station House in Suffolk.
It’s not surprising that there are so many community hubs, given 4,000 publicly owned buildings and spaces in England are being sold off every year and organisations have to run multiple services under one roof to generate enough income to be sustainable. But it does highlight community businesses’ role (potential and actual) in creating or maintaining those spaces. This is something that the people we spoke to who are involved in community businesses particularly valued.
“This is our happy place. It feels like home.” Community business visitor
The challenge for Power to Change, and businesses themselves, is to find ways to make these hubs sustainable and maximise the value of their assets.
3. A high number of community businesses are ‘transitioning businesses’
We have termed ‘transitioning businesses’ as organisations that have historically been funded through grants and charitable donations as a primary income stream, rather than trading, but are now trying to decrease their grant dependence.
This type of business is typically a registered charity and may not have always considered itself to be a business. They are in a period of transition, reacting to changes in the funding landscape, including a loss of Local Authority funding.
A key question for the next phase of the evaluation is to explore how far the Fund has helped these organisations to successfully reconfigure their business models. Has this investment been enough to help them through this transition phase and increase their traded income?
4. There are more similarities in the types of places where community businesses operate, than the types of businesses that they are.
Typically, organisations supported by the Fund are in an urban area with higher than average levels of deprivation, and higher than average unemployment (in some cases, substantially higher than average).
Nearly a quarter of businesses supported by the Fund are located in just three Local Authorities – Tower Hamlets, Liverpool and Bristol. This raises some interesting questions about the dynamics between community business and place, and why community businesses seem to be more prevalent in certain types of places, which we explored in an earlier paper.
Power to Change passionately believes in the power of community businesses to improve the lives of people and the places in which they work. Our evaluation has started to unpick how they do this in different ways, and how best to support them to do so, but many questions remain for the next phase of the evaluation to explore.
If you have any questions or comments about the report, please contact Alice Thornton, Head of Learning at Renaisi: firstname.lastname@example.org