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Unleashing the potential of community business

VidhyaIn the week of our first birthday, here are some reflections on what we have achieved at Power to Change, the independent charitable trust set up to spearhead the growth of community business across England.

We believe that in being initiated by local people, responding to local need and ploughing benefits back into places, community business can bring new prosperity, opportunity and pride to local people and communities. It is clearly a sector in rude health; our estimate is that community business grew 9% last year, despite the obvious pressures that the sector is under.

‘Our estimate is that community business grew 9% last year,

despite the obvious pressures that the sector is under’.

In our first year, we invested close to £8m in community businesses, supporting more than 40 organisations across England. We have been inspired by their potential to create lasting social change in their local areas – from Porlock Futures in Somerset which has set up an oyster farm to help tackle youth unemployment to the East Lancashire Football Development Association which is taking over the maintenance of local pitches and promoting health and community cohesion through football.

And one of our projects, Liverpool’s Granby Four Streets was instrumental in winning the Turner Prize for Assemble, an architecture and design collective, whose victory was in recognition of the way in which they worked with local people to redesign formerly boarded up homes.

In the next three years we want to support more community businesses to become sustainable. We will back successful community businesses to keep growing their revenue and impact. But we also want to back those with great potential but with a limited track record, and those who operate in more disadvantaged markets where the community has fewer financial and human resources to contribute.

As a funder, we know we’re part of a funding ecosystem, providing support to community businesses for just one phase of their funding journey. Realising where the gaps or strains are in that ecosystem has helped us shape our grant programmes and approach. The funding fair we co-hosted with the Department for Communities and Local Government in the City of London earlier this month was an opportunity to raise awareness among community businesses of other funding options available to them, be that community shares or blended grant and loan financing.

I also want Power to Change to be known as more than just a grant funder. After all, our grants will only ever reach a fraction of the community businesses out there; the fact that our grant programme last year was over-subscribed by a factor of ten to one told us that much. Over the coming year, we will be investing in leadership programmes, peer networks, improving access to existing community business resources and supporting innovation among support providers in order to strengthen the wider community business market. We are also in the initial phases of looking at how places can benefit, working with the Young Foundation and Social Enterprise UK in Sheffield and Plymouth respectively.

Through all our activities, we want to build the evidence base for the impact of community business, both the positive change the business creates for specific groups in the community, such as isolated older people or young people not in employment, education or training, as well as wider community benefits of  greater trust and cohesion between local people. It is this combination of specific social impacts and wider community benefits that makes community business unique.

To help build this evidence, we’ll actively support those we invest in to measure their impact in ways that are meaningful to them and proportionate to their stage of development. Support for impact measurement forms part of our overall commitment to evidence and learning. That’s why we’ve invested 5% of our £150m endowment in the Power to Change Research Institute, a small team that will work with academics, researchers and practitioners to look at the impact of our funding and of community business more broadly.

Ultimately, we want the support we offer our grantees not just to protect our investment but to build their capacity for the entire funding journey, whether their next step is a community share issue, social investor or their high street bank. We want to align the data we ask community businesses to collect to that required by others so it’s easier for organisations to demonstrate their impact and grow their credibility across the market. And we want to build referral relationships with other investors so that together, we can blend the funding cocktail at source to support great community business ideas.

Last year was a packed first year for us, in which we learnt a lot about the sector and the efficient uses of our resources. We’ll report back a year from now on our actions in 2016 and how together with our partners, we have unleashed the potential of community business.

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