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Critical Success Factors for Community and Social Enterprise in
Deprived Communities
Overview Background to the study Policy and literature review Results of online survey (Case studies) Results of interviews with local authorities Provisional conclusions
Background to the study Three key areas of focus:
Community enterprise; Deprived communities; Support needs
Methodology Policy & literature review Online survey Case studies Interviews with local authorities Workshop
Outputs Report Good practice guidance for local authorities
Policy & Literature Review 1 Definitions: Social Enterprise …
A business with primarily social objectives, whose surpluses are principally reinvested rather than to maximise profit.
Community enterprise … … as social enterprises but ‘they seek to benefit a particular
geographic area or community of interest’ … ‘a focal point for local people to identify the needs of their
local communities and to respond with the help of their own income-generating activities’ (CLG 2010)
Policy & Literature Review 2 Part of wider ‘third sector’ Increasing focus in relation to public service
delivery Recent focus on ‘community enterprise’ Support needs and Business Link
Policy & Literature Review 3 Critical success factors for social enterprise:
Pre-start up and early start up support Access to finance and funding Commissioning and procurement models Board membership and skills Shared vision Leadership succession Change in mindset
Online Survey Results
101 respondents …A community enterprise has been described as a type of social
enterprise that serves a particular geographic community. Does this describe your organisation or not?
Yes
No
Don't know
… few CICs or IPSsThinking now about your organisation’s legal structure or status,
what is it, is it a…? (tick all that apply)
0%
10%
20%
30%
40%
50%
60%
70%
80%Com
pany
Lim
ited
byG
uara
ntee
Reg
iste
red
char
ity
Com
mun
ityIn
tere
stCom
pany
Uni
ncor
pora
ted
asso
ciat
ion
Indu
strial
&Pr
ovid
ent
Soci
ety
for
the
Com
mun
ityIn
tere
stCom
pany
Com
pany
Lim
ited
bySh
ares
Indu
strial
&Pr
ovid
ent
Soci
ety
as a
Sole
tra
der
Frie
ndly
soci
ety
… otherwise very diverse: turnoverPlease indicate below your organisation’s approximate annual total
turnover or income from all sources.
No income (0)
£1 – £10,000
£10,001 - £25,000
£25,001 - £50,000
£50,001 - £100,000
£100,001 - £500,000
More than £500,000
… otherwise very diverse: ageHow many years has your organisation been running?
Less than 1 year
1-2 years
3-5 years
6-10 years
11-20 years
More than 20 years
Most grew out of grant-dependent community groups
Again, thinking back to when your social enterprise was set up, where did your initial resource come from?
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%G
rant
Don
atio
nset
c
Gua
rant
eed
cont
ract
from
anot
her
Don
’t kn
ow
Seed
-cor
nfu
ndin
g
Tra
nsfe
r of
asse
ts fro
mpu
blic
sec
tor
Loan
High level of community involvementIn which of the following ways do you involve the community in the work of your
organisation? (tick all that apply)
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%Pr
ovid
e vo
lunt
eering
oppo
rtun
ities
for
com
mun
itym
embe
rs /
use
rs
Rep
rese
ntat
ives
of th
eco
mm
unity
on
the
Boa
rd
Con
sult
with
com
mun
ity /
use
rsto
est
ablis
h ne
eds
Invo
lvem
ent of
the
wid
erco
mm
unity
/ u
sers
in s
ervi
cede
sign
Invo
lvem
ent of
the
wid
erco
mm
unity
/ u
sers
in s
ervi
cede
liver
y
Mem
bers
hip
orga
nisa
tion
Foru
m for
mem
bers
of th
eco
mm
unity
/ u
sers
to
influ
ence
deci
sion
s of
the
boa
rd Oth
er
Empl
oyee
ow
ners
hip
Non
e
Enablers of success …Please identify the top three Enablers to social and community enterprise
0
5
10
15
20
25
30
35
40
45
50
Peo
ple
(e.g
. em
ploy
ees
and
volu
ntee
rs)
Man
agem
ent
com
mitt
ee o
r bo
ard
Ben
efic
iarie
s /
clie
nt /
com
mun
ity
Gra
nt f
or r
even
ue
Gra
nt f
or c
apita
l
Ski
lls /
tra
inin
g an
d de
velo
pmen
t
Cas
h flo
w /
liqu
idity
Acc
omm
odat
ion
Pro
cure
men
t op
port
uniti
es
Loca
l aut
horit
ies
PR
/ m
arke
ting
skill
s an
dkn
owle
dge
Inve
stm
ent
finan
ce
Con
sum
er u
nder
stan
ding
of
soci
alen
terp
rise
Bus
ines
s su
ppor
t (e
.g.
advi
ce)
Pro
cure
men
t sk
ills
and
know
ledg
e
Gov
ernm
ent
regu
latio
n an
d po
licy
Community enterprises Not community enterprises
People
Grants
Cashflow / contracts
Please identify the top three Barriers to social and community enterprise
0
5
10
15
20
25
30
35C
ash f
low
/ liq
uid
ity
Gra
nts
for
revenue
Gra
nts
for
capital
Govern
ment
regula
tion a
nd
polic
y
Investm
ent
finance
Consum
er
unders
tandin
g o
f
socia
l ente
rprise
Local auth
orities
People
(e.g
. em
plo
yees a
nd
volu
nte
ers
)
Pro
cure
ment
opport
unitie
s
Managem
ent
com
mitte
e o
r
board
Skill
s/t
rain
ing a
nd
develo
pm
ent
PR
/ m
ark
eting s
kill
s a
nd
know
ledge
Busin
ess s
upport
(e.g
. advic
e)
Pro
cure
ment
skill
s a
nd
know
ledge
Beneficia
ries/c
lient/
com
munity
Accom
modation
Community enterprise Not community enterprise
Barriers to success …
Money
Perceptions / structures
Dependency on public sector …What financial support have you sought in the last 12 months? (Tick all that apply)
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Gra
nt
Fund
ing
from
loca
l gov
ernm
ent
Don
atio
ns
Fund
ing
from
oth
er g
over
nmen
t bo
dy(e
.g. Cap
acity
Bui
lder
s, S
ocia
l
Fund
ing
from
the
lotter
y
Cha
rity
/vol
unta
ry o
rgan
isat
ion
Loan
fro
m fam
ily/b
usin
ess
part
ner/
dire
ctor
s
Ban
k ov
erdr
aft
Oth
er
Hav
en’t
soug
ht fi
nanc
e in
the
last
yea
r
Ban
k lo
an
Loan
fro
m a
Com
mun
ity D
evel
opm
ent
Fina
nce
Inst
itutio
n Shar
e is
sue
Selli
ng la
nd/b
uild
ings
Don
’t kn
ow
… even for social enterpriseWhat financial support have you sought in the last 12 months? (Tick all that apply)
0
10
20
30
40
50
60G
rant
Fundin
g f
rom
local govern
ment
Donations
Fundin
g f
rom
the lott
ery
Fundin
g f
rom
oth
er
govern
ment
body (
e.g
. C
apacity
Build
ers
, S
ocia
l In
vestm
ent
Busin
ess /
Futu
re B
uild
ers
)
Charity
/volu
nta
ry o
rganis
ation
Bank o
verd
raft
Loan f
rom
fam
ily/b
usin
ess p
art
ner/
directo
rs
Oth
er
Loan f
rom
a C
om
munity D
evelo
pm
ent
Fin
ance
Institu
tion
Haven’t s
ought
finance in t
he last
year
Bank loan
Share
issue
Selli
ng land/b
uild
ings
Don’t k
now
Community enterprise Not community enterprise
Tiny amounts of ‘normal’ business
finance
Variation in support preferences
Tiny amounts of ‘normal’ business
finance
Which of the following have you sought support from? (By support we mean advice, guidance, signposting, training etc.)
0
5
10
15
20
25
30
35
40
Indiv
iduals
work
ing f
or
oth
er
third s
ecto
r
org
anis
ations
Council f
or
Volu
nta
ry S
erv
ice o
r
equiv
ale
nt
Local auth
ority
Local S
ocia
l E
nte
rprise N
etw
ork
Busin
ess L
ink
Oth
er
busin
ess a
dvic
e s
erv
ice p
rovid
ers
Oth
er
govern
ment
agency
Consultants
Socia
l E
nte
rprise C
oalition
Co-o
pera
tives N
ort
h W
est
Develo
pm
ent
Tru
st
Associa
tion
Com
munity M
att
ers
Community enterprise Not community enterprise
Support needs: bidding, influence, efficiencyHow would you rate the support available to help your organisation to do the
following?
0102030405060708090
100
Net
wor
k w
ith o
ther
org
anis
atio
ns
Shar
e re
leva
nt in
form
atio
n
Acc
ess
trai
ning
App
ly for
fun
ding
Wor
k to
geth
er w
ith o
ther
orga
nisa
tions
to
deliv
er s
ervi
ces
Bus
ines
s pl
anni
ng
Find
peo
ple
(em
ploy
ees,
volu
ntee
rs)
Gro
w y
our
orga
nisa
tion
Hav
e sp
ace
to o
pera
te (
e.g.
office
spa
ce)
Wor
k w
ith o
ther
org
anis
atio
ns to
influ
ence
loca
l dec
isio
ns
Acc
ess
mar
ketin
g an
d PR
adv
ice
Fina
ncia
l man
agem
ent
Acc
ess
lega
l adv
ice
Find
tru
stee
s /
man
agem
ent
com
mitt
ee
Iden
tifyi
ng e
ffici
enci
es /
sav
ings
Bid
for
con
trac
ts
Very satisfied
Fairly satisfied
Fairly dissatisfied
Very dissatisfied
Don’t know
Interview Findings
Local authorities General level of awareness of social
enterprise but significant variation in policy / strategy and support
Recognition that community enterprise had ‘further to travel’ in order to achieve financial viability
Clear and detailed understanding of support needs: issues with targeting and delivery
Regional agencies Social enterprise is a key priority within
RS2010 Significant support programmes through
Business Link, NWDA ISUS, ERDF, Capacitybuilders
Not targeted at community enterprise?
Initial Conclusions
Community vs Social Enterprise Key differences between community and social
enterprise Origins / Focus Access to finance Access to support
BUT both demonstrate surprisingly high levels of dependency on grants and public sector funding and lack of access to enterprise finance
Regional variation or social enterprise myth?
Turning Points and Transition Most community and social enterprises have their
roots as community groups depending on grants The change to an ‘enterprise’ model often hangs on
a ‘turning point’ to move away from grant dependency
Vision and leadership – people factors - are critical in this process
Transition would appear to be slow and / or limited as levels of grant-dependency remain high
Finance Financial issues remain the main barriers to success Grants remain the dominant source of finance for
community and social enterprises … and the first place to which people turn
Few use more commercial sources of finance such as bank loans – lack of awareness / desire? Lack of access?
Problems with commissioning and procurements models
Awareness, size, bureaucracy
Support Cycle Need for greater co-ordination between providers to
meet varying support needs at different stages: Pre-start up / turning points – mentoring / CVS Building capacity & business planning – mentoring /
SE infrastructure organisations Commissioning & contracting – local authorities /
SE infras. organistions Business growth – Business Link / SBS
General Prospects All political parties recognising the need for:
Reduction in grant-dependency (there is no money) Transformation in public service provision (there is no
money) Role of community ‘hubs’ in strong neighbourhoods
Community and social enterprise seen as a panacea BUT …
Mismatch between need, capacity and desire Seen as ‘cheap alternatives’ Support / capacity-building seen as an easy ‘cut’
