What Are The Likely Other Sources Of Finance For Social Firms?Social Firms must receive at least 50% of their income from trade. What are the likely other sources of finance for Social Firms?
In reality most Social Firms earn much more than 50% of their income through trade and the average is around 85%. The rest of the income that Social Firms receive will be from a variety of places. It may be a mixture of income streams or just one or two. Other sources of additional income are such things as:
• annual grant funding from a charity or local authority. The annual grant funding from a local authority is very rare now but grant funding from a charity is not unusual where the charity is the parent of the Social Firm. Quite a few Social Firms have been formed by a charity that continues to provide additional funding to support growing Social Firms. The support is often 'in kind' e.g. marketing and HR services or the provision of premises rather than money;
• a number of Social Firm do offer employment training to service users (usually people referred by the local authority) and for whom the Social Firm has a contract. This contract is not usually considered as income earned through trade. The only time it would be counted as income through trade is where the severely disadvantaged employees of the business are actively working with the service users as a part of delivering the contract.
• funding (e.g Big Lottery) for a particular time limited project;
• grant funding from a grant giving trust, again time limited (often 3 years) for a particular project:
• a off one grant, usually from a grant giving trust but could be from a local authority (rare). Usually provided as start up money for a particular initiative:
• Workstep. Workstep is a national government scheme. Some Social Firms have Workstep contracts which means they receive some finance to support the enterprise and some disabled staff.
What Are The Likely Other Sources Of Finance For Social Firms?