Thousands of social enterprises at risk of closure this winter as rise in operating costs bite

We hosted an event with centre-right think-tank Onward this week to explore how social enterprises and other mission-led businesses can strengthen not only our economy but wider society, as part of our Future Economy Alliance campaigning to push our way of working up the policy agenda. Our Alliance chair Arvinda Gohil OBE joined a lively panel discussion including the Minister for Enterprise, Markets and Small Businesses, Kevin Hollinrake MP; Conservative Party candidate for South Norfolk, Poppy Simister-Thomas; CEO of NatWest Social and Community Capital, Victoria Papworth; and Executive Chairman of the social enterprise Community Shop, Gary Stott. The event was chaired by Adam Hawksbee, Deputy Director at Onward. Panellists discussed the power of mission-led organisations to address pressing challenges and the barriers keeping the sector from realising its potential, with a number of common themes emerging from the debate. You can read key insights below or watch a recording of the whole session here: Social enterprises are businesses Social enterprises form a key part of the business landscape, with Minister Kevin Hollinrake pointing out that there are more than 100,000 of them in the UK making a significant contribution to GDP. He stressed that “business and social enterprise are indivisible”, and the support available for traditional businesses should be relevant for those set up for a social or environmental purpose. Arvinda Gohil cited the huge impact of mission-led businesses, which now represent around 5% of UK businesses, creating 4 million jobs and re-investing more than £1bn of profits into communities. With 22% of social enterprises working in the most deprived areas in the UK, they are creating opportunities and reducing inequalities in the areas which need them most. Social enterprises are at the heart of local communities The discussion highlighted how social enterprises, co-ops and community businesses are vital to growing local economies - often running community assets and creating jobs or other vital opportunities for residents. Poppy Simister-Thomas talked about how social enterprises can “defy some of the economic constraints that big business has”, focusing on their strong community links and how many run local institutions like shops and pubs at a time when many businesses are shutting. She was also critical of the ESG efforts of some big corporates, which can appear as just a “nice to have” whereas social enterprises bring a “clarity of purpose” to their operations. This emphasis on community was brought to life by Gary Stott explaining how his social supermarket is reducing food poverty, bringing people together and supporting them to transform their lives.  A business set up to “build strong individuals and confident communities”, its shops sell discounted products for those receiving welfare support and run community kitchens with food at low prices, as well as delivering personal development programmes to help people find work. All their 12 stores are in areas of high deprivation and 53% of members move on within a year, as their model is fundamentally about supporting people to thrive independently. Access to finance is key Whilst Community Shop has built financial resilience funded by its members, the panel pointed out the importance of access to funding. Victoria Papworth talked about how NatWest Social and Community Capital exists to give funding to mission-led organisations who have been rejected by mainstream finance, highlighting the importance for funders to build relationships with the enterprises they are looking to support. She also hinted at the power dynamics inherent in the investor/investee relationship, stating that “social enterprises need to be ceded power and agency by funders” and acknowledging how “challenging and worrying” questions around debt and loans can be for social enterprises. The Minister agreed that access to finance was “the number one issue” for small businesses, mentioning the Government support that exists in this area and pointing out the importance of alternative finance providers such as community development finance institutions. This was picked up on in the Q&A session, with discussions around how we transform banking through ideas like a Community Investment Act and regional banking systems. Issues around procurement The barriers social enterprises still face when applying for public sector contracts was another key theme. Poppy stated that “procurement processes are often slow and difficult for small businesses to engage with, resulting in the domination of big players like Serco and Capita”. She outlined an issue raised by our Social Value 2032 Roadmap, whereby scoring penalises bidders with core purpose delivery against those adding it for bid purposes, and spoke of social enterprises being used in supply chains as ‘bid candy’.The Minister highlighted features of the 2023 Procurement Act designed to make it easier for small and mid-size enterprises, such as streamlining processes around things like indemnity insurance so that organisations only have to put this in place if successful in winning a product.

Global collaboration will help unlock millions of hours for women and girls to improve quality of life, saving time for learning and income-generating activities. 15 April 2024 The Washing Machine Project, a grassroots organization that provides off-grid manual washing machines to people in low-income and displaced communities, announced today it is collaborating with the Whirlpool Foundation to deliver 10,000 manual washing machines to communities and households across the world over the next five years. The work is expected to impact an estimated 150,000 people and address a significant barrier to their advancement and quality of life. Recognized by The Washing Machine Project and the Whirlpool Foundation as the ‘Global Washing Divide,’ this collaboration will focus on the estimated 60% of the world’s population–or 5 billion people–that rely on washingclothes by hand. This new collaboration with Whirlpool Foundation will expand the reach of the innovative Divya manual washing machine and alleviate the burden of hand washing clothes for communities across India, Latin America, Mexico and Africa. The new partnership will enable The Washing Machine Project team to install over 10,000 Divya manual machines in 6 countries, impacting 150,000 people. In its first five years, the collaboration will help unlock approximately 17 million hours for women and girls to improve quality of life and halve overall water usage, bringing efficient and sustainable washing solutions where they are needed most. According to the World Health Organization, 70% of households worldwide depend on women and girls for water collection and laundry, which is amplified by the estimate that up to 20 hours each week are spent hand washing clothes in underserved communities globally. The collaboration will help save time and create opportunities for learning, income-generating activities and more time with family. “We are honoured to partner with the Whirlpool Foundation, whose legacy as a pioneer in home appliance innovation is only superseded by their passion to foster community development and improve life at home for people around the world," said Navjot Sawhney, founder and CEO of The Washing Machine Project. “This collaboration is a testament to what can be achieved when compassion meets technology. Together we are set to revolutionize laundry practices globally, paving the way for a more equitable and prosperous future for hundreds of thousands of people.” Divya Washing Machine Impact At the initiative's core is the Divya Washing Machine, the world's first flat-packable manual washing machine that allows users to wash their clothes without electricity or a connected water source. Its simple design reduces the prolonged physical effort usually required to hand wash clothes, replacing it instead with a simple manual machine that can be used frequently and safely, saving the user up to 76% of the time compared to hand washing clothes. As a portable unit built with commercial-grade components and stainless-steel construction, the machine is easier to fix remotely and has the potential to be recycled at the end of its life. Divya, the machine's namesake, is named after Navjot Sawhney's former neighbour, whom he became close friends with during a work assignment in India engineering cook stoves. He was struck by how much time Divya would spend doing back-breaking chores, including hand-washing clothes for hours each week. At that time, he promised to return to Divya with a manual washing machine and help makeher life a little easier. In March 2024, in a joint trip with the Whirlpool Foundation, he did just that. “We greatly admire the mission and work of The Washing Machine Project and see an opportunity to help impact more lives collectively than either of us could individually," said Pam Klyn, Whirlpool Corporation executive vice president, corporate relations and sustainability. "Driven by shared passion and purpose, Whirlpool Corporation employees are lending their time and talents to help make this long-term vision a reality, recognizing that this initiative goes beyond washing clothes. It is about reclaiming time and improving lives for these individuals who will now spend much less time doing laundry, which opens the door to new opportunities.” In the first five years of its collaboration with Whirlpool Foundation, distribution is planned for underserved populations in rural and urban areas in India, Mexico, Brazil, the Republic of Congo, Kenya, and Uganda. Implementation will be tailored to meet the partnering regions' specific cultural, economic, and environmental conditions, ensuring the solution is effective and relevant in local contexts. Since The Washing Machine Project was founded in 2019, the organization has conducted ethnographic research in 13 countries and interviewed more than 3,000 families in India, Uganda, Jamaica, Nepal and the Philippines to gain insight into their clothes-washing tendencies. In addition to completing successful pilot studies, The Washing Machine Project has distributed Divya washing machines to families and communities in India, Iraq, Lebanon, the United States, Mexico, and Uganda. In 2024 The Washing Machine Project plans to scale across numerous countries, partnering with organizations like the Whirlpool Corporation and international development and humanitarian organizations such as the United Nations High Commissioner for Refugees (UNHCR), Save The Children, Oxfam, Care International, and Plan International. About The Washing Machine Project Founded by Nav Sawney, The Washing Machine Project is a grassroots social enterprise based in the U.K. aiming to alleviate the burden of hand washing clothes and empower women by providing remote, low-income and displaced communities with an accessible, off-grid washing solution. The Divya Washing Machine - a manual, off-the-grid washer-dryer helps save up to 50% of water and 75% of the time compared to hand washing clothes. About Whirlpool Foundation Since 1952, the Whirlpool Foundation has been making real, positive differences in local communities where Whirlpool Corporation families live and work. Whirlpool Foundation shares our vision that communities and displaced people everywhere should have access to sustainable washing solutions; improving lives by reducing the physical impact and reclaiming the amount of time it takes to simply wash clothes. thewashingmachineproject.org

Unity Trust Bank, which supports organisations to deliver positive social impact around the UK, has reported a record level of lending in its annual results for 2023. Exceeding £1 billion for the first time in its 40-year history, almost half of Unity’s financing last year (45.3%) went into areas of high deprivation.  Overall lending increased by 21% to £1.01 billion (2022: £836.6m) while after-tax earnings rose to £48.9m (2022: £22.8m), resulting in a strong CET1 capital ratio of 19.7% (2022: 18.3%). Colin Fyfe, CEO at Unity Trust Bank, said: “Surpassing £1 billion in lending for the first time is testament to the principles that Unity was founded on 40 years ago – that a bank can deliver social purpose as well as sustainable commercial returns. “Our 2023 objectives were achieved against a backdrop of turbulent economic conditions, and supporting our customers continues to be at the core of our strategy. “The higher bank rate environment, alongside balance sheet growth, increased financial returns for Unity in 2023 and enabled us to continue to advance our purpose and our investment in customer services.” By only using customer deposits to lend to organisations that deliver quantifiable impact in local communities, Unity’s funding in 2023 helped to support 1,458 care home spaces; 572 day care and education spaces and 7,143 jobs. It also provided affordable homes for 1,225 households and 452 properties benefited from retrofitting activities. Unity continued to strengthen its support to customers in 2023, introducing a new digital banking platform and establishing sector specific customer hubs. Committed to developing the way it measures and manages its own contributions to people and planet, the bank joined the Partnership for Carbon Accounting Financials (PCAF) and released its first financed emissions reporting; strengthening its commitment to understanding its role in supporting customers facing the impacts of climate change. Unity also maintains its carbon neutral status for its own emissions through continued engagement with the Housing Association Charitable Trust’s (HACT’s) award-winning Retrofit Credits programme. Colin added: “Unity’s vision is to become the market leader in ethical banking in the UK and we will continue to help improve the lives of local communities into the next 40 years through responsible financing.” In 2023, employee-led Unity & Me initiatives continued to make Unity a great place to work and support positive outcomes for customers and communities. Unity increased its discretionary donations fivefold from 2022, supporting 26 organisations to deliver positive outcomes for the most vulnerable in society. It also maintained its partnership with the Prince’s Trust and volunteered with 123 young people throughout the year and increased its overall staff volunteering days by 2.5% compared to 2022. About Unity Trust Bank Unity Trust Bank is an award-winning, independent, commercial bank that uses banking to improve the lives of UK communities. Living by its principles of banking with integrity, Unity’s purpose is to help create a better society, not simply maximise profits. Now in its 40th year, it has supported like-minded organisations that share its values and address social, economic and environmental needs. With offices in Birmingham, Manchester and London, Unity offers a range of banking services, including current accounts, savings accounts and loans. Unity is a Real Living Wage Trailblazer and Disability Confident employer, holder of the Investors in People Gold standard and a member of the Global Alliance for Banking with Values, and its memberships ensure it’s engaged with best practices in the UK and globally as a bank with a social conscience. Visit www.unity.co.uk for more information. You can also follow Unity Trust Bank on Twitter and Facebook, or go to its LinkedIn page.