Increasingly over the last ten years, grant funding options for community transport operators have diminished, with an ever decreasing funding pot receiving an ever increasing number of bids. Even if your organisation secures grant funding it is likely that the focus will be on projects and new initiatives, and therefore organisations need to look at new ways to fund core operating costs.
How do organisations and the people that run them adapt to survive beyond reliance on grant funding and what are the principles that underpin organisations that continue to grow and succeed with little or no grant funding? In June, CTA held an event with HCT Group looking at some of the options available to organisations wishing to move towards more of a social enterprise model and how you can start to think about adopting the principles of growth and success. Ahead of the event, Dai Powell CEO of HCT Group told us his story about taking a grant reliant organisation and turning it into a thriving and successful social enterprise and why he believes more community transport organisations should choose trade.
Choose grants. Choose small. Choose near total dependency on one funder. Choose hoping for a bigger slice of a smaller pie just to stand still. Choose keeping your fingers crossed that a minor rule change doesn’t accidentally wipe out the whole shebang. We chose not to choose grants. We chose something else.
Now don’t get me wrong. HCT Group doesn’t have a problem with grants – some of our most high-impact services are grant funded and we have strong relationships with our funding bodies. I suspect that we receive a larger amount of grant funding that any other CT. It’s dependency on grant funding that we see as the issue – and choosing trade as the antidote.
All the way back in 1993, as Hackney Community Transport, we were convinced that we were about to hit the wall feared by any grant funded organisation – the withdrawal of our core funding. We had to change the way we operated. We had to take our future into our own hands and earn the money needed to support essential services in our community. We had to learn to trade.
So Hackney Community Transport embarked on a path of bidding for and winning transport work that aligned well with its core community transport mission. It hasn’t been a straightforward journey by any means – successes, failures, wins and losses. Moments of angst over whether this was the right way. Worries about whether trade would distract us from our social mission.
As a social entrepreneur, my job is to balance and manage these concerns. It’s different from being a grant-funded charity CEO, who is responsible for ensuring that the charity delivers on its objects. It’s also different from the profit-maximising drive of the for-profit entrepreneur. I see my job as maximising our social impact.
Trade allows us to pursue this model. With growth comes greater opportunity to do good. Trade also allows us to end the risk of single source funding, to set our own strategic goals, to listen more closely to our communities and to seek out communities where we can help make a difference.
Trade isn’t a panacea. We have had to build our organisation’s capabilities to compete in the marketplace – taking opportunities as they present themselves and being honest about the need to make money in order to survive. More important still is the need to develop a culture where that’s okay – and when you’re trying to balance the imperative of your social mission against the pressures of the market, we’d be lying of we said that was always easy.
We think we’re getting the hang of it. Sort of. We’re at the stage now where rather than just reinvesting profit, we’re trying to make our commercial work more social – training ex-offenders as bus drivers, investing in biogas buses and so on. We are, at least, in a position to share what we’ve learned with our fellow community transport organisatoins.
Our desire to share what we’ve learned is the motivation behind our Future Journeys programme for CTOs and our Impact and Enterprise we held with CTA in June which explored what it means for a community transport provider to have an entrepreneurial approach to their activities.
In a strange twist of fate, it turned out that we never did lose that core grant. Hackney Council could see all of the additional impact we were creating as a result of trade and wanted to continue to back that – and still does to this day. That’s why, across the country, our grant income continues to grow.
The journey that our decision to trade has taken us on has allowed us to increase our social impact and reach more people. Better than just sitting back and hoping that the status quo remains. Choose your future. Choose trade.
Community Transport Association UK is a charitable company limited by guarantee. Registered in Cardiff no. 1985361 Registered office: 12 Hilton Street M1 1JF. Registered as a charity in England and Wales no. 1002222. Charity Registered in Scotland No. SC038518.