To win one of this year’s two valuable and prestigious awards, caring ventures must show solid business nous.

Launched last year by Bank of Scotland Corporate and The Sunday Times, the £6m Social Entrepreneur Awards have quickly captured the imagination of the not-forprofit (NFP) sector. It is not hard to understand why. Many NFP organisations triumph daily over the challenges they face, yet their energy, business acumen and innovation tend to go unrecognised by the media and the private sector.

Sam Kerr, head of specialist banking at BOS Corporate, says: “We wanted to acknowledge and promote the good work that social entrepreneurs do. The bank has a long history of giving to charity, so the Social Entrepreneur Awards are an extension of that; they are also a way of identifying more closely with the responsibility to society that the bank believes it has.”

Apart from helping to raise the profile of the sector, the awards offer tempting prizes. Entrants were asked to choose whether their ambitions reached to the upper tier (with its prize of a donation of up to £500,000 or an offer of funding up to £5m free of interest for three years) or whether they would be able to achieve their aims with the lower tier award (donation of up to £100,000 or interest-free funding for three years of up to £1m).

The bank created the two categories to broaden the reach of the awards. “About 160,000 entities around the country call themselves NFP organisations, but about 800 of those account for 80% of the sector’s activity,” says Kerr. “We wanted to open up the competition so that smaller organisations could win something too.”

Applications poured in. “We were surprised by the sheer volume,” says Kerr. “There were many more than we expected, from large national organisations to small local bodies. They were very diverse in their interests and we were pleased with that.

“We were looking for entrepreneurs who, through their ideas and innovation, could reach the largest number of the people they were trying to help.”

Innovation
In choosing three finalists in each category, the bank looked not only at what the applicants were doing, but, crucially, how they were doing it. “Traditional ways of helping people won’t necessarily work well now,” says Kerr. “Different approaches are needed. We also wanted to see that people’s ideas and work could be sustained in the long term, after our funding was over.”

Kerr will be on the judging panel that chooses the two winners, to be announced on Thursday night. He will be joined by the innovative social entrepreneur Liam Black, cofounder of Wavelength Companies Ltd, which brings together people from the private and social enterprise sectors, and Kavita Oberoi, founder of Oberoi Consulting, based in Derby, which provides IT services for the pharmaceutical and healthcare industries, and who revealed her philanthropic side on the Channel 4 series The Secret Millionaire.

The other judges are Richard Caseby, Sunday Times managing editor, Cahal Dowds of accountancy firm Deloitte, Ceri Richards, specialised industry finance director, Bank of Scotland Corporate, and Ty Jones, the bank’s head of corporate responsibility.

While the prize fund should give both category winners a welcome boost, they will each also receive three days of mentoring by either Black or Oberoi. Kerr believes this aspect of the prize is particularly valuable. “Getting advice and guidance from our best social entrepreneurs will help the winners build sustainable organisations.”

The challenges
Black, who joined the charity Crisis in the 1990s, then launched a business selling secondhand furniture to housing associations, says: “When I started in this field a while ago you had two options: you could work in business or work in a charity. But social enterprises are a blend of those two worlds and since then the social enterprise movement has increased dramatically and internationally, which has been very exciting. There’s been an explosion of thinking on the subject: there are now conferences, books and university courses on it and The World Economic Forum has now taken it on board.”

The figures generated by the sector are now impressive, with turnover coming from the sector reckoned by the Social Enterprise Council in England, to be about £27 billion annually.

Yet social enterprises face particular challenges, says Black. Funding is usually the main issue. “If businesses want to increase their scale of activities they can go to a bank for funding or to venture capitalists. It’s harder for social enterprises to do that. Donations — which are the lifeblood of many organisations — may not be sufficient for their purposes and can dwindle in economic downturns.

“Bank funding may not always be possible as they may not be able to offer security or ways to service the debt— and venture capitalists want profits. The challenges are more difficult with the complexity of ownership in this sector, too,” he admits. For these reasons, he says, many enterprises have not been able to take their activities from a local or regional to national level. “I established Wavelength to help create joint ventures between the corporate and NFP sectors so social enterprises could develop scale in their operations.”

“The extent and regularity of funding remains a real issue for them,” says Kerr, “and the climate in the last year has made it even harder, with donations decreasing — one of the factors that inspired us to create the awards. Another challenge is getting volunteers and skilled support. Many will have to turn to the new media like the internet to widen their message and address these issues.”

Moneymatters
But some banks and other financial organisations are providing specialist support, he says. “Here at BOSwe have a team of people across the UK whoexclusively work forNFP organisations and charities. We’ve also developed sector-specific products such as ‘Interest First’, an account on which interest is paid up front. All charities and NFP organisations get advice from the specialist team.

Apart from funding, investment is also an issue. “Often they’re obliged to invest in specific ways,” explains Kerr. “But more financial institutions are waking up to the importance of the sector. A few years ago many wouldn’t have considered having specialist teams to look after it.”

Several funds have emerged to help social enterprises, he says. Bridges Ventures is one investment company that has launched a quasiequity fund for social enterprises.

The Enterprise Finance Guarantee, launched by the government to help provide working capital and capital investment to viable businesses, is proving popular with the sector. “The bank is receiving many proposals from NFP bodies for funding under the scheme,” explains Stephen Pegge, head of external affairs at Bank of Scotland. But, he says, banks and other institutions can provide support for NFP organisations. “They may need guidance on planning, marketing and customer relations.”

Networking
Many NFP bodies, says Pegge, can benefit from good networking. The Social Enterprise Coalition in England, along with Social Enterprise Coalition Cymru in Wales and the Scottish Social Enterprise Coalition, represent the sector. As well as being the policy and campaigning arm of the NFP movement, championing its interests with government, says Pegge, “these organisations present a great opportunity for NFPs to learn from the innovations and best practice of others and get support from diverse like-minded businesses.”

At the Scottish Social Enterprise Coalition, chief executive Antonia Swinson says: “We provide members with a good opportunity for getting network and exchange knowledge and to enter into partnerships and joint ventures with each other.”

The future
Pegge and Swinson both say that they are seeing wider diversity of NFP models. They also point out that they have observed an increasing public awareness of the issues that lie at the heart of much NFP activity, which the sector should be able to harness to its advantage.

“More consumers are interested in buying goods and services from organisations that have a sustainable public ethos,” says Pegge. “That means that traditional businesses, aware of theirown corporate responsibility policies and interests, will want to work with them.”

While the idea of social enterprise isn’t new, the innovation that is evident in the sector and the recognition that there is a growing crossover between business and social purposes is certainly gaining ground at an ever-increasing rate.

But how will the sector develop? “There could be consolidation in the short term as some organisations find funding more of a challenge,” Kerr suggests. “But the current economic crises will also drive organisations to examine how they operate. I think we will see an even greater concern in the community about the social impact of how businesses work and partnerships between commercial organisations and NFP bodies not seen yet today.”

NFP organisations help foster a more stable society which helps sustain traditional business too, and he insists that the private sector should acknowledge this. “NFP bodies promote the general welfare of our community and prevent a less fragmented society. We can help build bridges in our society in the long term.”

Meanwhile, the £6m Social Entrepreneur Awards final is approaching. But the applause shouldn’t be exclusively for the winners, insists Richard Caseby, Sunday Times managing editor. “The entries revealed a strong entrepreneurial spirit throughout the not-for-profit sector. Even long-established charities are embracing the best management practices of the private sector — they want their causes to get the best possible value from every penny they raise.”

There are a some “brilliant” ideas, agrees judge and future mentor Liam Black. He is looking forward to meeting all the finalists and to mentoring one of the winners. “I can’t wait!” he says.

Upper tier: the final three

Bright Ideas Trust
The Bright Ideas Trust (BIT) is the bright idea of Tim Campbell, winner of the first Apprentice television series in 2005. Working for Sir Alan Sugar for two years was, he says, “life-changing”. When he left to embark on his own commercial venture, he decided that he wanted to start a social enterprise scheme and founded BIT in 2007 with Richard Morris and Paul Humphries.

BIT helps young people age 16-30 to establish and run businesses. “We’re targeting those who aren’t in education, employment or training,” says Campbell. “We want to show young people who aren’t achieving that they’re not excluded from business.” Campbell invested £2,000 in the venture and got support from consultancy giant Accenture and law firms Herbert Smith and Taylor Wessing.

BIT takes a stake in the businesses it funds and provides guidance from people who have successfully run their own firms. “We’re like a venture capital company,” Campbell says. When he realised that his target audience might not have the facilities to complete application forms, he started working with the Prince’s Trust on some its ventures, providing funding beyond its limit of £5,000. Five businesses have been startedwith BIT’s help so far and more are in development.

BIT wants towin the prize to fund another office in either theMidlands or the North. It also wants to run about eight workshops annually. “They could show 60-100 people what business is,” says Campbell. “We’d like to take the model around the country through regional development agencies, too.”

Maggie Keswick Jencks Cancer Caring Centres Trust
Before Maggie Keswick Jencks, a landscape designer with an international reputation, died of breast cancer in 1996, she set up the trust that bears her name. “Maggie was happy with her medical treatment in Edinburgh but thought there were deficiencies in helping people deal with the other aspects of livingwith cancer,” says Laura Lee, a cancer nurse who helped treat Keswick Jencks. She is now chief executive of Maggie’s, which offers advice and support to cancer patients at nine centres in the UK and one in Hong Kong.

Last year, the UK centres handled 77,000 visitors and Lee credits their success to their innovative look and operational style. Keswick Jencks, who had studied architecture, believed that design affects how we feel, so many of the centres have been designed by leading architects, such as Frank Gehry, a friend of the founder. “We wanted each one to have a face the local community could recognise and value,” says Lee. The centres are built around a kitchen, where visitors can make themselves at home. “People can feel that it’s their place. We’re different about how we work with people, too. They’re not ‘managed’. There are no closed rooms.”

Centres are staffed by a health professional, a cancer nurse, a psychologist and a fundraiser. Lee wants funding to develop an online service that would require more psychologists. “Some people travel for hours to get to our centres. So we’re piloting online support groups. Groups of eight can talk online,” says Lee. “Without new funding, it could take years to expand the service. If we win the prize, the scheme could be running by September. This service would also show other possible funders how the system would help.” In the meantime, four more centres are planned.

Columba 1400
The Isle of Skye makes the perfect setting for the work of the Columba 1400 Leadership Centre. Opened in 2000, the centre provides leadership development experiences for young people in Scotland who have faced such challenges as homelessness, addiction, poverty and growing up within the care system. “We’re looking to influence the lives of these young people by making them aware of their own potential,” says Anne Wexelstein, programme director. “The workwe do with them can lead to a positive transition in their lives.”

Founded by Norman Drummond, a former chairman of the Broadcasting Council for Scotland, Columba 1400 started its search for funds in 1997, obtaining a mix of corporate and private donations and national lottery funding. The charity has also aligned itself with educational and social organisations that workwith the young people it targets, says Wexelstein.

“We work alongside the professionals who are supporting them.We improve the ability of these organisations to deal with the people they’re helping.”

She says that 75 per cent of the young people who attend the centre’s leadership coursemove into education orwork, compared with 39 per cent of their peer group. “The experience gives them real self-esteem and resilience. When they leave, the youngsters realise that they can change their own lives. Then they can have a positive impact on the society around them.”

The centre’s 16 full-time and nine part-time staff come from amixed background—three have been through the leadership programme themselves. The centre is working at full capacity and needs the prize money for expansion. “We’re developing a new site at Loch Lomond and need a team there.” The centre also wants to double the number of people it helps by 2013.

Lower tier: the final three

Abs-Kids
After being bullied at school in Leicestershire, Abbi Morrall, now 16, and her stepfather, Phill Faulkner, set up the Abs-Kids website in 2005. Faulkner invested £4,500 in the project (which stands for Anti-Bullying Shared), and another £500 went into the pot when Morrall won one of the Archbishop of Canterbury’s Champions of Respect awards in 2005.

Several factors have fuelled the site’s success. “The anti-bullying websites around then were run by adults,” Morrall says. “But it's easier to talk to someone your own age. Our website is child-friendly and kids can go to people who understand bullying.” All incoming e-mails are anonymous and are answered by Morrall, with her mother, Alison, dealing with website administration. Victims can also chat to each other on the site. Initially, the website was publicised through the local press and radio. Then Morrall and her mother appeared on the Sharon Osbourne Show in late 2006 and, within hours, more than 7,000 e-mails had poured in.

Now two computers in the family home are used for the site. Victims of rape and young crime gangs are among those who seek help. Maintaining the website’s quality is crucial, Morrall says. “You have to update it constantly so people see something new when they come back. Wewant to have some fun games and to sell things like T-shirts to raise money.” A data pack for schools to buy and download is planned. “We’d like to win the prize to fund translating the website into several languages, too,” says Faulkner. Then, they say, money is needed for an office and peer-mentoring schemes.

The Gladiator Programme
Explaining the need for Glasgow’s Gladiator Programme, chief executive Alex Richardson cites some scary statistics. “Glasgow has the highest murder rate and the lowest life-expectancy rates in western Europe,” he says. On the health front, he believes, things could get even worse: “Children now sit at home with computer games and when they leave school, they often don’t have active jobs.”

With a group of supporters, Richardson founded a weightlifting club in a Glasgow coal bunker in 1986 to help local youths get healthy and achieve through sport. A former British weightlifting champion, twice ranked sixth in the world, he then oversaw the club’s evolution into a much wider scheme that promotes fitness generally through play groups. “Kids love to play, and our programmes help children get fit and gain competitive skills that can be used later in sport. They learn about the positive things in life,” he says. Today the Gladiator Programme works throughout the city and the Clyde Valley. About 250,000 children are involved in its nursery, school and evening operations annually. Five years ago, the scheme secured lottery money, but that has now been used. Ever resourceful, Richardson has just written a children's book that the programme will publish to raise vital cash.

With 20 full-time and eight part-time staff, eight vehicles and activities at more than 2,000 venues, the operation is already sizeable, but Richardson is keen to do more if he wins the prize. “There are 40 special needs schools in Glasgow but they have only three physiotherapists. We can incorporate the skills the children need to build up in play and integrate some special needs activity toys with our evening groups so that the special needs children can meet other children, too.”

A Way Out
Growing up in Stockton-on-Tees, Jessie Joe Jacobs witnessed first-hand the impact that drugs and poverty had on those around her. “I saw teenage girls working as prostitutes and boys who were drug addicts at 13,” she says. Later, studying for a masters degree in management at Durham University, she was fired by the idea of applying business practices to “third sector” organisations. She went back to Stockton at 24 and, with a group of like-minded individuals, co-founded A Way Out (At Risk Women and Youth Outreach).

When it was set up in 2002, the venture was unique in the area, Jacobs says. “There were drug education programmes but no preventative services to stop young people getting into drugs.” The group started providing activities for unoccupied youngsters. “Good businesses know their customers and we always knew who we were targeting. Our volunteers visited deprived areas and told them we had a great club. We provided high-energy games around drug education and ideas of self-worth.” The groups were a great success.

After startingwith funding provided through small local grants, the venture gained primary care trust funding and a lottery grant. Today it has 14 full- and part-time employees and 20 volunteers. This year it moved into a new centre. More than 50 children a night attend the project’s evening youth clubs. A Way Out also runs lunch-time health clubs in schools.

Jacobs wants the prize money for a business development manager and to build aworking kitchen in the centre. “We’d like to take our work further into the Tees Valley, too,” she says. “We have seen families restored through our work. Young women come out of prostitution and go to university. The children of addicted parents go ice-skating for the first time.”