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Social Enterprises need immediate support – without it the consequences will be dire

Social enterprises need immediate financial support if they are going to keep communities functioning during the current crisis and be around to re-build communities and local economies once we are through it.

Neil King Director CERT Ltd

Social enterprises are in the front line when it comes to our communities offering services to the most vulnerable people and those that are hardest to reach. Many enterprises help people maintain their mental and physical health while others create and maintain employment in some of our most deprived communities.

These are just the sort of organisations that we are all gong to desperately need in the coming months. Organisations that can get straight to the heart of the issues that we will face and who have earned the trust of the communities that they serve – but there is a problem.

The concept of social enterprise is relatively new and many of the organisations are still in their infancy. These social enterprises have not had the time to build significant reserves, they are operating in areas of market failure where the public and private sector have proved to be ineffective and their incomes are dependent on generating profits from the services they sell and grant funding.

Selling services in deprived communities is difficult enough in good times but in the current situation almost impossible. Grant funders and social investors are being as flexible as possible, but years of shrinkage in the grants available from trusts etc. means that scare resources are just about impossible to access.

Many social enterprises rely on volunteers to help deliver services and in the current situation it is clear that they are going to struggle to maintain those levels of volunteering.

Like any other business, social enterprises need to pay their bills and most importantly their workforce and in the absence of income or reserves many are facing the grim reality of closing their doors.

  • Do we really want to see the organisations that are best placed to support our most vulnerable and deprived communities to stop operating at a time when they are most needed?

  • Do we really want the very organisations that can re-build local economies after the crisis to have gone out of business by then?

Without an immediate cash injection this is the reality for many social enterprises.

The consequences of doing nothing do not bear thinking about.

Can we in all conscience, take away the hopes and aspirations of communities who after years of neglect are just starting to recover after they have faced the biggest crisis of the last 50 years?

There already tried and trusted mechanisms to get money to such social enterprises with all of the relevant checks and balances in place – we could use social investors or organisations like the Social Investment Business to channel much needed resources to the front line.

The levels of support needed are minimal compared to the vast resources being expended by central government and simply by targeting some of that resource towards the sector a massive problem can be avoided.

Just a final thought – organisations that support the social enterprise sector are completely reliant on external income and are facing the same crisis as their clients. It would be foolish to support social enterprises and ignore the organisations that developed them and support them and ensure that the sector thrives. Organisations like mine are fielding the calls from worried organisations, distributing information and guidance, linking organisations to resources and putting in emergency infrastructure but we can’t do it forever and without resources.

The entire social enterprise sector urgently needs financial support ad we need it now.

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