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Opinion

Social enterprises are the road back from Covid

Social enterprises are helping communities cope with the challenges brought by Covid says Stepan Zelinger of Big Issue Invest

Covid has been an amplifier for any existing problems that communities are facing. Life expectancy has fallen, waiting lists have grown. Children’s literacy lags behind, mental health worsens. And it’s charities and the social enterprise sector that are going to fill the gap and be there for people when they are most needed.

A majority of social entrepreneurs have seen the need for their services rise since the pandemic started while, simultaneously, experiencing a drop in both income from trading and from traditional fundraising events. This left many with the difficult choice between using the furlough scheme to survive at the cost-reduced capacity and exhausting internal reserves to keep staff and continue delivering services. In short, the enormous efforts to adapt have drained both the human and financial resources of many social enterprises.

Many social entrepreneurs use their lived experience to create solutions and often support people who struggle to access or are not reached by other services. It is important to see the business challenges they have experienced as a result of Covid-19 against the backdrop of economic and social impact that Covid-19 has had on the communities social enterprises work with.

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People from Black, Asian and ethnic minority communities, those on lower incomes, the least educated, and the young have been hit the hardest by the crisis. Women took on two-thirds of the additional burden of extra childcare during the first lockdown and were more likely to be furloughed. Black, Asian and ethnic minority communities have been three times as likely to contract Covid-19 and five times more likely to experience serious health outcomes, with higher mortality rates. They have also suffered a drop in earnings nearly three times larger than their White counterparts.

Those already facing poverty at the start of the pandemic have seen their situation worsen, incurring debts and rent arrears that are likely to put as much as half a million people at the risk of homelessness when the ban on evictions is lifted. And the crisis has seriously affected the nation’s wellbeing, with 33 per cent of recently polled adults stating it has had significant negative impact on their mental health. The elderly are among those most affected, especially those living with long-term health conditions, experiencing both social isolation, anxiety, and deterioration in physical health. Pre-existing learning gaps has widened as a result of lengthy lockdowns, especially for children from poorer families and children with special needs. This comes hand in hand with a mental health crisis – with over half a million children referred for help in 2019/2020, a 35 per cent increase over the previous year.

What can be done to support them?

In the autumn of 2020, Big Issue Invest partnered with Key Fund, Resonance, School for Social Entrepreneurs and UnLtd to deliver a Covid-19 emergency grants programme, the Social Enterprise Support Fund (SESF). The programme was funded by The National Lottery Community Fund and offered grants ranging from £10,000 to £300,000 through to enable social enterprises continue the provision of essential services to those most impacted by the pandemic, and to survive a financially devastating period of repeated national and local lockdowns.

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The consortium received over 1,300 grant applications and was able to provide emergency support to 618 social purpose organisations. Nearly two-thirds of social entrepreneurs supported through SESF have a lived experience of the social issues they are addressing through their work. A similar proportion of awardees are diverse-led, with over 50 per cent of their board members being from Black Asian and Minority Ethnic (BAME) backgrounds, living with a disability or identifying as LGBTQ+.

Over 10 months – from September 2020 to August 2021 – we worked closely with 118 grant recipients in our portfolio, as they worked to make their premises Covid-19 compliant, pivoted their services to online delivery and fought to mitigate the impact of Covid-19 on their local communities though new projects.

Throughout this period, most organisations continued serving their beneficiaries while innovating rapidly to adapt to continuously changing circumstances. What is more, the value of these adaptations seems to extend beyond the pandemic – more than half believe they will enable their organisations to grow financially going forward. This is hopeful news – with four in five organisations in our portfolio expecting demand for their services to grow, it is essential that this demand is met with increased trading income to expand provision and social impact.

Why are social enterprises so important when it comes to rebuilding after Covid?

First of all, they address social issues through their business models and services. Over the past 12 months, social entrepreneurs have played an integral role in community responses to Covid-19, often acting as ‘first responders’ and able to provide vital intelligence to public sector bodies. They have delivered home support, food and prescriptions to the most vulnerable, particularly in rural areas, and at the same time reduced feelings of isolation and loneliness. The focus on social issues has made their response, as opposed to mainstream businesses, adapt in ways that address the changing needs of their communities, as well as their own survival.

Secondly, these businesses make a significant part of the UK’s economy. It is estimated that there are around 100,000 social enterprises, contributing £60bn to the UK economy and employing two million people. Around 35,000 of them provide employment for those who would otherwise struggle to find work – one of many areas that will be of crucial importance in the upcoming months and possibly years. Their role in the economy sets social businesses apart from mainstream charities relying on grant funding, and it is essential from our perspective that the sector continues to grow and thrive.

Stepan Zellinger is a grants programme officer at Big Issue Invest

Find out more at bigissue.com/invest

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