Social Enterprise Funding: Sources, Grants & Opportunities
9 July 2021
To set up a successful social enterprise, the most important thing you need is a good idea: Something that’s workable, and that’s going to galvanise people to support you and your cause.
But you also need money – a source of funding to help you get your great idea off the ground.
In this post we’ll explore funding options for social enterprises. We’ll show you how to find grants to start up your social enterprise, and how to establish a good business model to secure ongoing funding.
How Are Social Enterprises Funded?
A successful social enterprise is like a cross between a business and a charity. Like a business, a social enterprise might offer products and services that it sells for profit. But whereas a business exists to enrich its shareholders, a social enterprise will instead, like a charity, channel its profits into schemes for social change.
Some social enterprises exist as community interest companies. These are limited companies that sell products and services, only to use their profits to achieve social goals. For example, check out Baron Fig. They sell notebooks, but they’ll plant a tree for every notebook you buy.
Others exist as social firms – working to provide employment to people who might otherwise struggle to find work. Social firms usually get their funding through supplying a service. A good example is Jamie Oliver’s Fifteen Restaurant. It makes its money just like any other restaurant, through selling food and drink. But the enterprise is working towards social change through training and employing homeless people and ex-offenders as chefs.
Finally, some social enterprises exist as community enterprises and co-operatives. Any community centre, social club, or nursery in your local area is likely to be a social enterprise of some sort. These organisations get their funding either through charging for membership, through sourcing donations, or through standard fundraising efforts, such as jumble sales and raffles. They might also rely on a volunteer workforce to keep things running.
Learn more about the various different types of social enterprise business models.
Social Enterprise Grants
So many social enterprises secure their funding through acting as a business. Others rely on donations, volunteers, and ongoing fundraising efforts. But all social enterprises need a source of funding to kick things off. And the good news is that there are numerous social enterprise grants out there.
- The National Lottery Community Fund runs a number of funding programmes for “impact-led” projects in the UK.
- UnLtd offer funding grants ranging from £500 to £20,000. They can also put you in touch with external partners to secure up to £50,000 in investment funds.
- In Scotland, Firstport offer numerous funding and other support services to budding social enterprises. They even have a handy quiz to help you determine just what kind of support you need.
- Good Finance helps social enterprises access social investment opportunities. Please note that, while social investment can be a great source of funding, it’s not a grant! Your investors will expect a return.
- The School for Social Entrepreneurs runs many learning and support programmes. Most of them are free, and some of them even come with grants. Elsewhere on the SSE site you’ll find affordable online workshops, and a big directory of possible funding sources. Please note, though, that some of the resources in that directory were set up to support social enterprises through lockdown. Some of the schemes might now be closed.
Additional Support for Social Enterprises
If you’re setting up a social enterprise, securing your funding is just one of many things you’ll have to think about.
We have a detailed, step-by-step guide to setting up social enterprises that will tell you everything you need to know about the entire process.
There’s also one key area where we can support you directly. Running a social enterprise can be risky. So to help you manage the risks, we offer specialist social enterprise insurance. It will cover your unique requirements as a not-for-profit business, ensuring you can support your cause with total peace of mind.