Following our series of Hear from a Peer: Growth and Resilience events which invited organisations who had experience with social investment to share their stories with peers, Carol Botten explains here why we held these events, and what we hope we've achieved through them.
Many leaders in the sector I speak to recognise that the world we inhabit now is the ‘new normal’.
It is a world where we see increasing competition for grant funding, contract values being squeezed as local and national government spending continues to be cut, and demand for services continuing to rise in response to welfare reform and impact of wider austerity policies. Organisations need to continue to adapt and flex in order to survive. We need to work smarter and we need to diversify our income sources.
Supporting organisations to develop their enterprising activity is something that VONNE is passionate about. Earning your own income will support your ongoing sustainability, build your financial resilience and help you to grow your impact and reach.
For many organisations, a future where they earn more of their own income and have at least one reliable, predicable income stream is a key ambition; but taking that leap and choosing to divert effort and resource into developing earned income alongside pursuing grants and contracts, is a step into the unknown.
That’s why through our funding from the Connect Fund, which is all about supporting VCSE organisations to develop new income streams and consider using social finance to realise those ambitions, we organised three Hear from a Peer events across the region.
At the events we heard from leaders of organisations who have successfully navigated that transition. They shared their journeys, the lessons learnt and the mistakes they’ve made. They were honest about their motivation for doing so. For some it was the loss of key contracts or grants which prompted the new approach, for others they were brand new organisations that need social investment to cashflow public sector contracts. For others still, their mission to offer supported housing to vulnerable people, would not have happened without social investment. They had no reserves, no assets and the mainstream banks wouldn’t go near them.
Social investment was their only option.
Not one of them has said that it has been easy. It takes grit and dogged determination to build a successful business model that works for your organisation; and bravery to take a new approach to financing your organisation. The paperwork and due diligence processes in applying for social investment can be arduous but the time spent on business planning, financial management and strengthening their governance structures have not just been a means to an end, but a useful exercise in strengthening their organisations.
The support, guidance and flexibility that has been given to them from social investors has been invaluable. These leaders recognise that it is a different type of long-term relationship, one where social investors stand alongside you, helping to ensure your success - their business model of you repaying the loan, relies on it.
When asked if they would do it again, unanimously the answer was yes.
The process and the opportunity have been transformational for their organisations. For one, the key learning was they should have done it sooner, when they had the strong foundation of core grants and key contracts upon which to build. Another shared the positive unintended outcomes they have witnessed. Grant funders now look upon them more favourably; they are stronger, more resilient organisations to support. They have financial independence from their local authority making it more easy to challenge and represent the needs of their beneficiaries without fear of financial consequences. They have been able to develop new services to support more vulnerable people and at the same time earn an income; winning awards for innovation and enterprise along the way. They have proved that being brave and pursuing ambitious goals is possible even when facing the most challenging of situations and if you do so, the rewards are many.
We hope these events have inspired those that attended to further consider the opportunities for enterprise and earned income for their organisations, and the use of social investment as a tool to enable them to fulfil their ambitions. We had some great feedback:
"The event broke down some of the barriers about Social Investment, and helped me understand where it fits in to the bigger funding picture."
"I felt I wasn't alone and I now understand everyone feels as I do in this first year, a little overwhelmed ... listening to others however taught me patience and perseverence pays off eventually"
We’ve encouraged them to check out the Good Finance website for more resources including:
- a clear animation on ‘what is social investment?'
- the ‘is it right for us’ diagnostic tool
- the directory of social investors and advisors
We’ve told them to have a chat with a social investor about their plans and ambitions to get some early advice and guidance - the North East Social Investment Fund is a good place to start. We’ve also told them about Get Informed - Social Investment for Boards which has specific resources and support for trustee boards.
Many of our speakers are now evangelical about encouraging other organisations to follow in their footsteps. They, like us, believe that social investment has a key part to play in securing the future of many more organisations, enabling them to continue to do their important work both now and in the future.