Mon 23 Oct 2017
An innovation in grant-funding that incentivises growth through trading
We are very excited to tell you all what we’ve been working on for the past three years here at School for Social Entrepreneurs. It’s an innovation in grant-funding that incentivises growth through trading. We call it…
What is Match Trading™?
It’s a beautifully simple concept. Match Trading is grant-funding that pound-for-pound matches an increase in trading income.
By rewarding sales growth, Match Trading empowers social entrepreneurs operating in challenging markets to develop their trading base, so they can build stronger futures. Match Trading was borne from SSE’s 20 years of experience of helping people to create sustainable change in their communities.
How can Match Trading help social entrepreneurs?
- Build sustainability. Only half of UK social enterprises increased their turnover in 2015, according to Social Enterprise UK’s State of Social Enterprise 2015 report. By rewarding growth through sales, Match Trading incentivises growth.
- Rebalance income streams. Grant-dependency can leave social enterprises vulnerable. In our pilot, organisations moved from an average income split of 65% grant/35% trading, to 37% grant/63% trading, within one year. Read Madeline’s story.
- Unlock entrepreneurialism. Match Trading empowers social entrepreneurs to deliver on their impact objectives by entering new markets, testing out new products and diversifying their income streams. Read Meave’s story.
- Protect against funding cuts. The funding landscape is uncertain. Many of us have felt the effects of widespread public-sector cuts. Business models that are more trading-based can help social enterprises weather the storm.
- Move towards investment-readiness. Match Trading can act as the stepping stone between traditional grant and social investment. Investors can make more informed financing decisions, benefitting from accounts that demarcate trading income and grant income.
We believe Match Trading works best for social entrepreneurs with established models, who have ambitions to grow through trading, and who’ve likely been operating for at least a year. We don’t think Match Trading is right for brand-new start-ups. We also believe Match Trading can be used as a stepping stone to social investment for more established organisations.
Does Match Trading work?
Match Trading has successfully piloted with 19 social entrepreneurs, who achieved on average 92% year-on-year increase in trading income. They took part in the pilot year of the Lloyds Bank Social Entrepreneurs Programme, in partnership with SSE and jointly funded by Big Lottery Fund. (Check out some case studies.)
That said, Match Trading is a new innovation, so there’s still lots to figure out. SSE is committed to exploring Match Trading’s potential applications and limitations. We’re keen to work in collaboration with partners to pilot Match Trading further. Click here to find out more.
What’s next for Match Trading?
We’ll welcome 80 more social entrepreneurs as the next wave of Match Trading pioneers this October, as students of our Lloyds Bank Social Entrepreneurs Trade Up and Scale Up Programmes, run in partnership with SSE and jointly funded by Big Lottery Fund.
Over the next five years, SSE is running programmes that will support at least another 500 social entrepreneurs with Match Trading grants.
Interested in Match Trading™?
For news about Match Trading sign up to our mailing list. We will send a quarterly roundup of Match Trading news and funding opportunities. You can also additionally opt in for alerts on new Match Trading funding opportunities as they happen.