For Big Society Not Small Society

I attended training on social investment recently and it was interesting. Big Society Capital was set up in 2012 with funding from dormant bank accounts in England and from four of the UK’s largest high street banks. Big Society Capital invests in intermediaries, who then invest in charities and social enterprises to tackle social issues across the UK. The investment consists of loans of between £500,000 and £15 million.

All good you might say. Money sitting there doing nothing should be put to good use. And I would agree. But who is going to going to make use of this money. With a minimum ask of £500,000 and, remember, this will have to be paid back (quite possibly with interest) only the large not-for-profits will think of taking advantage of this.

There are two points that concern me here. The first is that there is nothing here for the small organizations. Looking at the statistics collected by the Charity Commission for September 2018 looking at yearly income we see that charities with an income of less than £100,000 represent 79.72% of all registered charities and receive 3.08% of the sector’s income. Charities over over £5,000,000 income make up 1.35% of the sector and receive 72% of its income. These figures do not include the thousands of small not-for-profits who are not registered with the CC.

We are hearing that small organizations are recognized as doing wonderful work and provide excellent value for money. I just wonder how much good some of those millions could have done to support the smaller organization in its grass-roots work. It might give a small break from the constant struggle to keep the money coming in.

My second concern is than the set-up is around loans. As I wrote before no small organization, especially run by volunteers is going to take up a loan when the repayment is so unsure. It also occurs to me that a private enterprise model is being forced into not-for-profit services. The models are not the same, the circumstances are different – we sell our services to people who cannot afford them at any cost effective price. I know that as a sector we can improve the way we do things – we owe it to those who use our services – but it should be remembered that we are the not-for-profit sector; the Third Sector, the VCSE sector – whatever words we use. We are not the private sector and never should be.

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