Wednesday, July 09, 2008

Charities should consider setting up social enterprise trading arms

By Cat Dean, Third Sector, 9 July 2008 (http://tinyurl.com/6xcoj5)

Charities should consider setting up social enterprise trading arms to
improve their chances of securing funding from foundations, according
to Uday Thakkar, director of social enterprise consultancy Red Ochre.

Thakkar told delegates yesterday that funders looked increasingly
favourably on charities that earned income through a trading arm
because they were seen as being more sustainable.

Some charities that had been turned down for funding were awarded a
larger grant when they reapplied after launching a trading arm, he
said.

Setting up a social enterprise could also help establish a strong
market position in the face of increased competition for contracts.

"Charities could end up in a vulnerable position because many services
that they formerly provided for free are now being paid for," said
Thakkar. He warned that potential funders might be unwilling to give a
grant or donation if other organisations were getting contracts from
local authorities, primary care trusts or the Government to provide
similar services.

Thakkar also said now was a good time to take advantage of
unprecedented government support for social enterprises. However, he
said charities should act quickly because funding is unlikely to last
for longer than the next two years.

"There are millions of pounds sloshing around government departments
right now, but the chances are that will come to an end soon," he
said. "If you're thinking of setting up a social enterprise, now is
the time."

Thakkar added that setting up enterprises was best suited to charities
that wanted to have a social impact that was difficult to achieve as a
charity.

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