Daria Kuznetsova, Strategy and Market Development Director, Big Society Capital
The Investment and Contract Readiness Fund was a programme set up in 2013 to enable promising charities and social enterprises compete for public service contracts and secure other forms of investment. Organisations can get advice on business planning, modelling, bid writing or impact measurement. To date ICRF has spent £13.2m and supported 155 ventures, both small and large. Half the ventures supported by ICRF successfully secured at least one contract or investment as a result of the support they received with the total value of contracts and investment raised through the support being £233m. One example is FCMS which is a social enterprise providing urgent health and wellbeing services. Through the ICRF programme they received financial modelling and HR advice which was instrumental to securing a £9m bid.
So what is the relevance to the VCSE review tasked with exploring how the sector can build sustainability and capacity whilst maximising and demonstrating its impact?
First of all, through the range of engagement exercises to date, the VCSE review has already found that the landscape is changing. Commissioners are increasingly looking to contract with organisations rather than provide grants for services. Moreover the reduction in grant funding is forcing many to consider diversification of revenue outside statutory and philanthropic sources. For many VCSE organisations neither of these routes will be an appropriate way to deliver impact for their communities. However for those that are actively exploring those options and looking to bid for contracts or take on investment to grow, the right support will be critical to ensuring their success.
Support focused on organisations delivering impact in health and social care rather than a broader support programme has a number of key benefits. The needs of VCSE organisations in this sector are in many cases very different to the needs of the wider sector – tailoring the support will ensure those needs are taken into account. Involvement of commissioners in the process (for example as members of the selection panel making decisions on applications) could help ensure that the proposals for development have credibility and an increased likelihood of success at the point of completion.
Other departments have also begun looking at the ICRF model as way of building the capacity within organisations delivering outcomes for the most disadvantaged in society. For example, over the summer, Department for Education launched a £500,000 Investment Readiness Fund. This Fund was targeted at providing the right advice and support for childcare providers looking to use investment in order to expand into or scale existing operations in deprived areas.
From the years that ICRF has operated, there are important lessons to be learnt. Most importantly – clarity over objective of the programme. Is it about broad capacity building? Should it be designed with a focus on identifying and winning contracts? Is investment the aim? Having a focused objective and for be crucial to any future programme.
In addition to 1-1 advisory, there are other ways of providing support to organisations which should be explored in future iterations of such a model. Group sessions on impact measurement strategies or mentoring programmes between different VCSE organisations could create efficiencies and improve outcomes. Additionally a greater focus on capacity building within the VCSE organisation rather than short term external advice could further help build resilience.
Programmes like ICRF are not the silver bullet to the myriad of challenges the sector faces in the changing landscape. However as resources continue to be scarce, new approaches to supporting a strong and thriving VCSE sector will need to be explored.