What do you achieve by funding individuals? – UnLtd
While many of the processes of grant-making to individual people are similar to those of funding organisations, there are important differences in what can be expected in terms of applications and monitoring, and aims and outcomes. We talked to a selection of members about how they manage the relationships and what can be achieved.
The second article in this series comes from Mark Norbury, CEO, UnLtd.
For UnLtd the issue is not a question of supporting individuals versus organisations, but about supporting social entrepreneurs versus traditional charitable models.
We lead with support, not funding, which is a key difference to conventional grant-making. In the beginning we look for entrepreneurial leadership potential – energy, ambition, passion, and often lived experience, which can be incredibly powerful in finding solutions to social issues that are meaningful and will resonate with potential users. It’s wonderful if they have a great idea and clear product/market strategy, but for us it is primarily about the person – who they are, their qualities, attitude and potential.
With a team of 12 award managers based all around the UK, serving over 350 social entrepreneurs every year, we offer the support the social entrepreneur needs at the stage they are at. At the beginning of the journey the focus is more on their confidence, skills, the clarity of their mission and purpose, the business model and impact model. As they put that into practice with our funding and advice, coaching and support, then it becomes more about how they build that organisation and make it more sustainable, resilient and successful. Over time it moves from personal and organisational development into market development – access to capital, access to clients, evidence of impact and breaking down the barriers to growth.
Outreach and networks are very important. We have backed more than 17,000 social entrepreneurs over the last 17 years, so we benefit from this community’s extensive networks and word of mouth. The challenge is finding people who wouldn’t necessarily self-identify as social entrepreneurs, for example, the community activist who has a really smart business model, or a more traditional social entrepreneur with a tech solution that could have a really powerful social impact, but has not thought of it in those terms.
Many are individuals that other organisations are not reaching. For example, one award winner is a young black woman who has set up a leadership programme in the arts and cultural sector. Her experience is powerful as she knows first-hand how discriminatory the sector is to BAME people. We have also supported a commodities trader who started a coffee business that trains and employs homeless people. There is no way a traditional grant-maker would contemplate funding such a model. Nor would traditional venture capitalists, because it wouldn’t have the margins they seek – at least in the beginning – and because of the time it takes to provide such in-depth support to each employee.
Until three years ago, we supported social entrepreneurs across a range of issues, and it was impossible to have a common measurement of impact or yardstick against which to judge effectiveness. Since then we have recognised that it is important to prove the power of social entrepreneurship to change society by doing just that – changing society. We identified two areas where we thought social entrepreneurs could make a real difference, and where we have enough social entrepreneurs to offer significant traction – firstly, access to employment for those distant from the labour market, particularly disabled people, and secondly, how to increase healthy life expectancy and independence for older people.
Social entrepreneurs in these areas can progress from early-stage awards, then through an accelerator, then to one of two funds – a post-accelerator fund or a loan fund, with a range of different partners like Scope, UBS, and City & Guilds, and four years of post-investment support. Around that path we have built a collective impact framework to enable a cost-benefit analysis of the impact and value of the social entrepreneurs individually and as a whole. As part of the process we have also been able to build relationships with the Department for Work and Pensions (DWP), employers, other parts of the public sector, and service delivery organisations.
But not all social entrepreneurs can change the UK for the better in a dramatic way. There isn’t any yardstick that says everyone needs to be a Nelson Mandela. Many of the people who do not go on to accelerators or investments are doing wonderful work, addressing social injustice where they are, helping to foster fantastic trust and hope in their community, and making society fairer while contributing to economic value creation.
The stats speak for themselves. In our Big Venture Challenge accelerator which ran from 2013 to 2017, the average revenue growth of the 120 organisations taking part increased from £190,000 to £490,000. 74 accessed matched funding from us (and external social investment off the back of this) – an average of £177,000 per venture, with our grants (£4.4 million) stimulating £8.7 million of external social investment. By the end they were making a difference to 1.24 million people. 93% of those social ventures are still going strong. In the private sector the figure is something like 40-50% of SMEs still in business after five years.
As well as focusing much more on impact, UnLtd is now taking more of a systemic approach, stressing the importance of lived experience as a driver and enabler of social change, and how we as an organisation have to develop to get really good at finding, funding and supporting those leaders with lived experience. We also see other progressive grant-makers moving in the same direction so foresee opportunities to work together and collaborate, to share learning, knowledge, resources and ambitions.