Lessons from the Adventure Capital Fund

The Adventure Capital Fund has recently published the fifth and final external evaluation report on its third sector investment activities, Investing in Thriving Communities. The evaluation has been carried out by London Metropolitan University.

Even for those not interested primarily in social enterprise access to finance issues, the report makes interesting reading. The Executive Summary alone is probably sufficient (it’s a very well done and comprehensive Executive Summary) but the full report contains some buried nuggets.

ACF has grown from a £2.8m, one-year ‘demonstration programme’ originally established in December 2002 – “to test different approaches to enabling community-based organisations to grow and become more sustainable” – to an ongoing £14.4m portfolio which now includes delivery of the Dept of Communities & Local Government’s Managed Workspace Fund, the second phase of the Futurebuilders (England) programme, the Dept of Health’s Social Enterprise Investment Fund, and the Communitybuilders programme.

Although much of the report will not surprise anyone who has been working at the coal-face of the sector, it offers a good source of evidence/intelligence on broader development issues that many will find useful to inform their own papers/briefings/bids.

For example:

  • The ACF Business Development Programme, aimed at organisations considering making an application to the main investment programme, offers a small grant and input from an independent strategic advisor. This model has been especially successful, offering a low-cost/low-risk model that has enabled applicants to commission stratgeic planning, support with business planning and feasibility research, and support to raise skills and improve systems.
  • ACF applicants that have completed the projects they received investment for have grown faster (in terms of gross income) than general charities/enterprises of the same size that have not received investment.
  • Successful support packages need to combine loans, grants and professional advice/business support (“independent strategic advice”).
  • Organisations that are attempting to develop new social enterprise initiatives while also continuing to deliver their key activities/services have found this “much more demanding in time, resources and complexity than anticipated by the funding agencies, the ACF, or the applicants themselves”.
  • Not surprisingly, perhaps, the ACF portfolio does not have a strong presence of organisations involved in community development activities (probably, it can be assumed, because it is very hard to to turn community development into an income-generation activity that can be traded as opposed to a cost-centre that requires funding).
  • There is an inverse relationship between the number of expressions of interest and successful applications. The larger the number of applications the lower the proportion of successful applications.
  • The report acknowledges that even for SEs the public sector plays a key role in largely determining the shape and nature of marketplace.

Incidentally, this ACF report, like the recent report on the Dept of Health Social Enterprise Investment Fund (Social Enterprise — Making a Difference: A Guide to the Right to Request), appears to indicate that Birmingham SEs are making little use of these national investment opportunities.

Both the DoH SEIF and ACF have had only two successful Birmingham-based applicants (and I think a further two in both cases from elsewhere in the region).

While we don’t know how many unsuccessful applications there might have been, this certainly looks disproportionately low from the second city’s perspective.

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