Guidance

Starting a social venture in the UK

Published 23 February 2015

This guidance was withdrawn on

This page has been withdrawn because it’s out of date. Read about social investment and the social sector.

Social entrepreneurs are setting up businesses to address issues that people in the UK care about, including inequality, poor health and community engagement. Increasingly, people think the primary role of business is having a positive social impact.

Watch a video featuring entrepreneurs talking about their experiences of running a social enterprise in the UK:

Social Enterprises and Social Investment in the UK

1. Size of the social enterprise sector

Currently 1 in 5 UK small- and medium-sized enterprises (SMEs) has a social mission at its heart and the number keeps growing. SMEs employ over 2 million people and contribute £55 billion to the economy. They also have 3 times the start-up level of traditional small businesses.

2. Support available to social ventures

The UK offers world-leading support to social ventures.

The Cabinet Office launched a £30 million investment readiness programme, consisting of the:

2.1 Investment and Contract Readiness Fund (ICRF)

ICRF supports organisations to become ready to take on investments or to win large public service contracts. To date 51 charities and social enterprises have won deals worth £117 million with the help of ICRF grants worth just £4.5 million. This equates to £26 for each £1 of grant, and the figure is expected to grow. Successes include:

  • Steps To Work: £91,600 has helped it successfully compete against commercial rivals to land a contract from Walsall Council to fill approximately 250 temporary jobs each week, worth about £27 million over 3 years
  • Empower Community: £108,650 ICRF grant helped it secure a £10.1 million loan from a UK institutional pension investor. This will allow it to provide free daytime solar energy to social housing tenants in more than 2,300 homes in Sunderland
  • The Big Life group: £105,000 grant helped it win contracts worth £5 million over 5 years to run 6 nursery schools for around 450 children in deprived areas of Greater Manchester, creating 100 new jobs
  • City and Hackney Mind (CHM) won a competitive tender valued at £10 million over 5 years to become the lead provider of mental health services in Hackney and the City of London. CHM offers a personalised service to more than 2,500 people

2.2 The Impact Readiness Fund

The Impact Readiness Fund provides grants to help ambitious social ventures manage their performance and increase their social impact to attract social investment and win contracts.

2.3 The £10 million Social Incubator Fund

The £10 million Social Incubator Fund has established 10 incubators which will support ambitious social start-ups across the country.

There are a number of other initiatives helping social ventures, including the Big Lottery Fund. Launched In 2014, it’s a £10 million 3-year early stage investment readiness programme called Big Potential. This is for social enterprises seeking to raise less than £500,000 or to bid for smaller contracts.

Other highly intensive support schemes, such as Impetus Trust and Social Business Trust, have provided support through venture philanthropy and pro-bono help.

Not all social enterprise ventures focus on UK causes. Many of them have an impact around the world.

3. Impact technology in the UK

Technology is increasingly being used to drive positive social change. This field, often referred to as ‘impact tech’, is one where the UK is again leading the way. According to research carried out by Nominet Trust, 27 of the top 100 impact tech companies are based in the UK. These companies include Skin Analytics, which has created an app which allows users to self-monitor melanomas.

The UK has created infrastructure to support the development of impact tech through initiatives like Tech City, which provides programmes that aim to accelerate the growth of the digital businesses, and through tech social incubators, such as Bethnal Green Ventures, which had support from the Social Incubator Fund.

If you’re looking to receive investment for your social enterprise, find out more about finance for social ventures from Big Society Capital.