Frequently asked questions

Power to Change was established in 2015 with an endowment from the National Lottery Community Fund (then the Big Lottery Fund). We were created to support and grow community business in England, because the role and impact of enterprising community businesses that benefit their local place was increasingly recognised.

Our goal has remained the same since that time. We want to see more communities in England run businesses that give them power to change what matters to them. Because we know community business works to create more resilient places. Communities that are better to live and work in for everyone.

In 2023, we developed and refined our business model. Now we can continue to support community businesses now and in the future. We reflected on our strong track record and what we’ve learned from past funding and interventions.

We now shape the conditions in which community businesses operate. We continue to advocate for policy change, partner with local and regional authorities and shape the funding and finance on offer to community businesses.

We want communities have the power to change what matters to them. Through working with partners, we’re testing and learning what works for community business. Can they access the right forms of finance, support and advice? Do community businesses have the power to influence or make decisions in their community? Can they operate from the right physical space for them and their community? Are there supportive partnerships for community businesses, such as with local government, to improve their community?

We are focusing our efforts on three key areas that cover these big questions:

• Financing the future economy: We know that the right kind of finance – at the right time – is instrumental in the success of community business.
• Building community power: We believe communities should have the power to change what matters to them in their local area.
• Taking back the high street: We want all communities to have the power to create vibrant and resilient high streets that work for them.

These three themes bring together our ‘doing’ and ‘thinking’ – on-the-ground interventions alongside community businesses and our work to shape the conditions in which community businesses operate.

Power to Change was established in 2015 with a £150m endowment from The National Lottery Community Fund (TNLCF). We received a further £20m from TNLCF in 2021.

As part of our move towards long-term sustainability, we are adopting a new business model. This will help us create an income stream that allows us to continue to advocate for and support community businesses while still maintaining our independent voice. We are already doing this through working in partnership with funders, investors, government, and regional and local authorities to leverage money into the sector.

We work with a large range of organisations to shape the conditions for community businesses to thrive. This includes:

• Funders and foundations
• Investors, from social investors to private investors
• Government at all levels, including regional and local authorities
• Think tanks and advocacy organisations
• Community businesses

At the moment, we operate in England only, a condition of our endowment.

The growth and flourishing of community businesses has always been our goal, both in our early years as a funder, and now with our refreshed purpose to shape the conditions for community business to thrive.

We recognise that ‘thriving’ means different things for different community businesses. For some, it will be about solidifying their work, business model and continuing to deliver the services and impact their community wants. For others, it will be about expanding their reach across a place and growing their businesses activity. Whatever their size or ambition, we know the barriers that stand in the way of their success.

This is where we come in. We use our experience to bring partners together to do, test and learn what works. We use this activity to inform the policy, practice and behaviour of those that have an impact on community business – policymakers at all levels, funders, social investors and mainstream financial institutions.

Power to Change was set up originally as a 10-year spend-down endowment trust by The National Lottery Community Fund. But after consulting a wide range of stakeholders, it became clear that community businesses want us to stick around. Our knowledge and experience of the impact and challenges facing community business show us that there’s plenty of ongoing need for our work. So, we’re excited that our new business model enables us to continue our vital work into the future.

Community business empower local people to make their community better.
They are locally rooted and accountable to the local community. Local people have a genuine say in how the business is run. This allows a community business to trade for the community’s benefit. They provide services and products that match the needs of the community.

Community businesses engage with a variety of different groups in their community and address different needs. They may have a specific focus on a disadvantaged group or support the local community more broadly, depending on local needs.

In 2022, over 97% of community businesses reported they had a positive impact on reducing social isolation, improving community cohesion, improving health and wellbeing, and greater community pride and empowerment. They also employ people furthest from the labour market. In 2022, 45% of community businesses reported they had employed someone who had no previous paid employment in the last 12 months.

Community businesses trade products and services and make up an important part of the local economy. There are around 11,000 community business operating in England, with a total income of just under £1 billion. Community businesses are owned by, rooted in, and accountable to their communities, operating with sustainable business models that generate both financial return and benefits for communities.

Community businesses provide good work for local people, often in areas facing disadvantage. Nearly half (48 per cent) operate in the 30 per cent most disadvantaged areas in England (IMD 1–3). They create high-quality jobs and volunteering opportunities. They provide advice and support to build the confidence and skills of those furthest from the job market. And most community businesses offer more than one service to their local community, meeting a wide range of needs.

Community businesses strengthen the local economy. Community businesses improve the physical fabric of places and the services available to the communities that live there. As locally-rooted organisations, their physical presence on high streets and in buildings brings local people together. They are at the forefront of community-led regeneration through providing infrastructure and facilities. Their work helps address regional inequalities and build local community pride and purpose.

With their sustainable business models and high local profile and impact, community businesses are well-placed to thrive. Our research shows that those who have been adjusting their operating and business models to maintain or adapt their services in response to new challenges have been proving the most resilient and optimistic.

Learn more about their impact in our Community Business Market Survey report.

Community businesses have unique needs and face many operational challenges, including those facing the private sector. As well as this, they are also seeing growing demand for support from their community.

Economic and social challenges, including the cost-of-living crisis and the decline of community spaces, are huge challenges for many communities across England. These factors amplify existing economic, social and health disparities in a community. Community businesses can meet these challenges through their services and products. But they are also worried about what these challenges mean for their businesses.

With the right conditions to thrive, community businesses can deliver services and goods for community health and prosperity. Working together with government and public services, community businesses can provide much-needed help to tackle pressing national and global challenges.

Over the past year, we’ve been reflecting on our future ambitions. We asked community businesses and our partners what their priorities were. And we asked them what role Power to Change should play, now and in the future. This got us thinking about our purpose.

The message was clear: Power to Change has a vital role to play in shaping the conditions for community business to thrive. We’re continuing to bring partners together to fund and develop projects demonstrate what works (and what doesn’t) for community business. We will do this alongside community business, and this may come with direct funding, but it won’t be at the scale it was in the past. We then use the evidence from these demonstrator projects to advocate for policies and new ideas that will benefit communities.

This new and sustainable business model allows us to be around for community businesses now and in the future. It means we can back community business from the ground up. That together, we can turn bold ideas into action so communities have the power to change what matters to them.

As part of our transition to the future, Power to Change have reviewed our current activity to ensure that we can have the maximum amount of impact and that the right level of funding is used in delivering this impact.

Our existing programmes including Community Shares Booster, Energy Resilience Fund and Trading for Good will continue to run in 2024 (and some beyond 2024), while we transition to a focus on testing and learning, advocacy and influence, leveraging more funding for community businesses and building supportive partnerships for the long term.

We believe that our experience and evidence developed over the past eight years makes us the right vehicle to deliver on our mission to make places better through community business. Our track record of leveraging £210m for community businesses against £45m of our endowment demonstrates the greater impact we can have through working in this way. And the majority of our stakeholders including community business leaders we’ve spoken to agree.