The Big Potential Breakthrough programme is getting organisations ready for repayable finance. What does it involve, who's applying and what are the reasons behind application rejections? Azlina Bulmer, our programmes and development manager takes a look.
The Big Potential Breakthrough Programme, aimed at helping voluntary and community sector organisations to take on repayable finance, recently published an evaluation of its progress so far. Azlina Bulmer, Charity Bank’s programmes and development manager explains how the programme works and what you can learn from the report.
What is Big Potential Breakthrough?
The Big Potential Breakthrough programme is an opportunity for charities and social enterprises to access support and secure grant funding to help them reach a position where they could use repayable finance. It has seven distinct phases:
- Online registration.
- Online diagnostic tool. You then move on to complete the online diagnostic tool and provide detailed information about your business model (i.e. sector of operation, organisational reach, legal structure, financial data, income streams, governance models, staffing levels, skillsets, product details, accounting practices, and investment needs).
- 1:1 support advisor sessions. The 1:1 support advisor session involves speaking face-to-face (usually through a video call) with an independent expert advisor to consider your organisation’s ‘diagnosis’ and discuss your business model.
- Selecting a support provider. You then select a support provider from the list of approved providers who will work with you to develop your grant application.
- Submitting the grant application.
- A panel assesses the application. The Big Potential Breakthrough panel decide if the application is successful or is to be rejected.
- Post-grant work with the support provider (if successful). If rejected you may be invited to reapply. If successful you will be awarded the grant funding and can use it to develop your investment readiness alongside your support provider, and possibly go on to secure social investment.
Who is currently applying to Big Potential?
Big Potential is attracting small-scale, local VCSEs (usually with charitable status) looking to grow, who currently have low debt burdens, but who struggle with profitability and hence sustainability. These VCSEs have a strong vision of their social mission but often struggle to measure and disseminate the social impact that they have and some see the programme as a way of developing this capacity.
Thousands visiting the Big Potential website
The website attracts thousands of users every month. Many use it as a resource to prepare themselves for the future possibility of taking on investment. The application process has been designed as a diagnostic tool so that by the end of an application journey, whether they are successful or not, the applicant should have learned a lot about their organisations’ strengths and weaknesses.
What were the reasons for applications being rejected?
At the time of the report's publication (July 2015) 32 grant awards had been made, 13 grant applications were awaiting decisions and 26 grant application had been rejected.The 32 grant awards came to a total of £999,936 and the average grant was £31,248. The main reasons behind rejected applications were poorly developed market analysis (55%), poor financial data (20%) and VCSEs being too early stage in their development (21%). See the chart on the left for a full breakdown.
How close are those who’ve been awarded the Big Potential grants to securing social investment?
The evaluation report draws the conclusion that it is still too early to tell. At the time of the report’s publication, the 32 VCSEs that successfully applied for grant funding (commencing in August 2014) had not yet secured additional social investment (although several were close). This is understandable given the length of time that has elapsed since the first awards were made.
One organisation, quoted in the report, viewed the programme as a useful learning experience, singling out the post-grant work with a support provider as crucial to attracting investment. In their view, undertaking organisational development with a support provider and then applying to social investors and ethical lenders was key to developing a full understanding of the social investment market.
Interested in repayable finance?
If you are interested in developing your organisation so that it can use repayable finance, take a look at the Big Potential Programme. Visit the Big Potential ‘Advanced User’ section of the website if you would be looking for finance above £500,000.
There will be a series of Big Potential events on social investment across the UK in the next 12 months. Check the Charity Bank blog or sign up to our e-newsletter (below) for updates.