Pathway Fund Launches New Cost of Living Support Programme
The cost of living crisis is a bigger problem than ever for social enterprises - we’ve launched a new Cost of Living Support Programme, to do something about it.
Black and Ethnic Minoritised-led organisations are less likely to apply for social investment - and are less likely to obtain it, too.
Only 45% of the 1,000 Black and Ethnic Minoritised-led organisations Pathway has spoken to, said that they would trust and approach social investors.
76% said they believe they had been refused finance because of their race or ethnicity.
The cost-of-living crisis has made this funding disparity all the more damaging, impacting the ability of Black and Ethnic Minoritised-led organisations to deliver impact in the communities most impacted by the crisis.
Do It Now Now’s Cost of Living Report, one of the very few sector surveys focusing on Black and Ethnically Minoritised communities, highlights that the rising costs of doing business, combined with stagnant or insufficient funding, has presented Black and Ethnic Minoritised-led organisations with an array of severe challenges, jeopardising their ability to provide vital services and support to minoritised communities.
That research found that 9 in 10 Black and Ethic Minoritised-led enterprises are concerned about the ongoing cost of living crisis. 7 in 10 are extremely concerned. The impact of this? 66% of those organisations said that it stopped them from being able to improve their communities.
That’s a problem. Black and Ethnically Minoritised communities have been more than 2.5 times more likely to rely on these sorts of organisations in order to access government support. And fundamentally, under a third (32%) of White people experienced fuel poverty in 2022, compared to more than half (52%) of Black and Ethnically Minoritised people.
If we are to support Black and Ethnic Minoritised-led charities, social enterprises, and the communities that they serve, then we believe that something must be done to help them through the ongoing financial turbulence.
What We’re Doing About It
A Cost of Living Support Programme focuses on supporting frontline charities and social enterprises, led by people from Black and Ethnic Minoritised backgrounds – and supporting the communities most detrimentally impacted by the cost of living crisis.
The programme is funded by Access – The Foundation for Social Investment’s Cost of Living Social Investment Support Fund, utilising funds from the Dormant Assets Scheme. It will be delivered in collaboration with Inclusive North and the open innovation organisation Do it Now Now.
The programme will support 31 frontline organisations with grants – both repayable and non-repayable – as well as blended capital (which blends both grants and loan). This financial support will be provided in the form of three distinct financial products – Enterprise Development Grants, Investment Readiness Grants, and Blended Deals, with grant and repayable grant sizes ranging from £10,000 to £40,000.
The programme ultimately aims to improve the financial resilience of the 31 participating charities and social enterprises, helping them secure social investments, to build up their enterprise and trading models, whilst also helping them to asset-build, so that they can perpetually improve their communities, over the long-term. This is yet another moment which will see the power within the social investment sector shift in the direction of Black and Ethnic Minoritised-led charities and social enterprises.
Seb Elsworth MBE, Chief Executive, Access – The Foundation for Social Investment, said: “The research findings underline how many black and minoritised organisations are unable to access the finance they need to build their resilience as they support people and communities most at risk from the cost-of-living crisis. Supported by the Dormant Assets Scheme, the investment made in Pathway, through our cost-of-living fund, will broaden the availability of finance to black and ethnic minoritised organisations.
It also reflects our broader intention to work closely with Pathway as we refocus efforts on removing the structural barriers faced by minoritised communities to accessing finance and deliver against the recommendations set out in the Adebowale Commission on Social Investment.”
Bayo Adelaja MBE, CEO, Do it Now Now, said: "Through this funding opportunity, we are expanding the range of financial products that are directly catered to Black and Global Majority led organisations in England.
The unique challenges we continue to face as under-resourced leaders of social enterprises must be addressed through equally unique solutions, tailored to our needs and circumstances. We have worked closely with our community members to define our product offering and we look forward to supporting them by catalysing increased financial investment into Black and Global Majority led social enterprises in the near future.
The financial support and capacity building we provide will ensure the organisations can achieve improved operational stability, financial resilience as well as increased depth and size of their impact on local communities across England. We're grateful to have found the right collaborators in Pathway Fund as we work together to achieve a shared vision of equitable outcomes for everyone."
Naz Zaman, CEO, Inclusive North, said: “The cost-of-living crisis has had a massive impact on local charities and the social enterprise sector, and in turn affected the communities they serve. Evidence shows that Black and Racially minoritised-led organisations are less likely to receive investment, have less access to inclusive funding products and are impacted by lack of intermediary support.
Inclusive North are working collaboratively, with Pathway Fund, as an intermediary in supporting the Third Sector across Lancashire in unlocking its potential through the Enterprise Development Grant. In turn, our involvement is also responding towards the Governments Inclusive Growth agenda, where the benefits of a country’s growth are shared equally by all sections or at least in a fair and just manner.
We at Inclusive North will be supporting frontline charities and social enterprises with Pathway Enterprise Development Grant to expand or develop enterprising initiatives that support equitable economic growth with a view to fostering an environment where the communities they serve can exercise dignity, power and self-determination.
This collaborative approach of unlocking £24 billion to the UK’s economy is a step towards transforming the landscape of social investment; through this collaboration as well as through its other works, Inclusive North and Pathway Fund working collaboratively will help achieve our shared vision of ensuring that Black and Racially minoritised-led social sector organisations receive the support they deserve.”
Dilys Winterkorn, Project Director, Pathway Fund, said: “Black and Ethnic Minoritised-led organisations are suffering an extra blow from the crisis of the cost-of-living since it worsens economic gaps and threatens their survival.
Existing economic disparities are being intensified by the rising cost of living; this threatens the sustainability of many Black and Ethnic Minoritised-led organisations – like those supported by this programme – and consequently, adversely affects Black and Ethnic Minoritised-led institutions, too. These groups represent a lifeline for our society as they provide crucial services, assistance, and advocacy, for the communities that they represent.
Many of these Black and Ethnic Minoritised-led orgsniations mostly work with little to no budget and face systematic obstacles in accessing mainstream financial support. It’s vital that we secure adequate funding to enable these organisations to continue their work. They can only overcome the present economic challenges with responsive financial support – to build resilience and enhance community development and empowerment. Providing them with that support and guidance is important in ensuring that recovery benefits are shared equitably between all sections of society.
Pathway invites funders to reach out, so that we can further increase our impact – and ensure that ever more Black and Ethnic Minoritised-led organisations and communities are supported, in the years’ to come”.
Learn more about the Programme, here: https://www.pathwayfund.org.uk/our-work/cost-of-living-support-programme.