New analysis of social investment landscape highlights progress made and further changes needed

Groundwork is a federation of 15 charitable organisations operating across the UK. It runs programmes and activities to help people improve their prospects, working with communities facing multiple challenges, in places that lack social infrastructure and economic opportunities. It combines environmental and social impact, building the green economy while supporting communities to connect with nature and adapt to the climate crisis. From creating green jobs to supporting people with energy bills and retrofitting homes, it works to build a fairer and greener future in which people, places and nature can thrive. Working with government departments Groundwork UK (the national body of the federation) distributes grant funding for the UK Government, acting as an intermediary to make sure public money is invested in communities at a grassroots level. This involves bidding for contracts with central government departments and acting as an outsourced intermediary provider of grant management services. It’s worked with the Ministry of Housing, Communities and Local Government to get groups  such as parish councils involved in local planning, and with the Home Office to support charities tackling extremism. It’s also been contracted by the Department for Culture, Media and Sport to run the Voluntary Community and Social Enterprise (VCSE) Energy Efficiency Scheme - a £25m programme, largely distributed through grants. So far it has funded 1,100 organisations to carry out energy assessments to help them improve the efficiency of their buildings. The benefits of working with a VCSE organisation Groundwork UK’s position of having national grant management capability but also being able to leverage connections through its federation members allows it to promote grant programmes at a local level, supporting organisations to navigate through complexity and access funding they may not have been aware of. Chief executive Graham Duxbury states that government outsourcing this kind of work aims to ensure grants are accessible to smaller, local organisations that are often volunteer-run. He said: “Having knowledge of that sector and that space is hugely important in terms of designing the service. You’ve got to be aware of capacity restraints and limitations, you’ve got to understand how volunteer-led organisations work and how to communicate with them as well as what to expect in terms of their capability to manage due diligence processes.” This close knowledge of the VCSE sector has allowed Groundwork UK to develop a good understanding of what’s proportional when it comes to distributing money, which means it can give the contracting body a clearer idea of what money can deliver when directed to organisations of various sizes and capacities. The second major benefit of working with Groundwork is that it’s “really good at bringing together partnerships”, as it knows where the “deep pockets of expertise are in the sector”. Graham points out that the energy efficiency programme would not have been possible without the support of specialist organisations such as the Centre for Sustainable Energy, the Energy Saving Trust and Locality. Thirdly, working with a VCSE provider helps create broader impact, with “cross fertilisation being what you get from the sector”. Combining the social and the environmental is at the heart of Groundwork’s ethos, and the funding it distributes  can create other opportunities for VCSE organisations. As Graham phrases it: “A grant programme may allow them to do one thing, but we may be able to communicate to them other opportunities and provide them with added value; so when we’re managing grants focused on a social issue we can signpost local grantees to other forms of funding and provide advice that might encourage them to think about their environmental impact too.” What were the main challenges in applying for a central government contract? One of the main challenges Graham identified was bidding timescales, with it being tricky to “be able to drop everything and jump on a bidding process for sometimes as little as three weeks”. This can make forming partnerships to deliver contracts difficult because “partnerships take time to develop, build and form - and very few VCSEs have those bidding resources, even relatively large ones like us”. Other challenges identified are issues around negotiating risk levels on contracts, as government contracts involve public money, with Treasury rules to “rightly focus on money being sensibly spent and looked after”. When it comes to grant management services, like those managed by Groundwork UK, these can lead to there being an over-specification on the part of the ultimate recipient of the money: “We’re sometimes caught between government machinery which wants all this assurance and protection and risk management, and a small voluntary sector organisation which doesn’t have the capacity to do that. If you put too much on them, they won’t engage - and that’s counter to the purpose of the grant programme, which is to get small-scale voluntary organisations funded to deliver.” The biggest challenge Groundwork faces on some grant programmes is down to annualised budgeting within Government, which can affect frontline organisations if delivery time slips and “potentially means that money disappears if delivery needs to extend into the next financial year”. Before VCSE organisations even get to bid to run a government service, the department in question has to bid to the Treasury as part of a Budget or Spending Review process. Once granted, “there’s a clock ticking”, with the design work and procurement exercise needing to be carried out - so the actual window for the delivery of the services can be “really concertinaed at the back end”, especially if the funding is only secured for a year.  As Graham puts it: “As an intermediary in the process you know sometimes you’ll have to put pressure on organisations to deliver in a less than ideal timeframe because funds can’t easily be moved from one year to the next.” Graham acknowledges that it is “hard to get the right balance between due diligence and not overburdening VCSEs”, but feels there could be solutions around “expanding those timeframes; thinking about multi-year commissioning processes to bring about more long-term certainty.” Another challenge faced by VCSEs is the still significant weighting on price as a deciding factor in who is awarded a contract, which can skew the process towards organisations able to offer the biggest discount, which may not be beneficial to the service being delivered. Graham asks: “If a department has secured funding from the Treasury for a particular piece of work, they’ve secured the money, so why put the additional stretch in there in terms of who can do it the cheapest?” Based on a conversation with Graham Duxbury, chief executive at Groundwork UK groundwork.org.uk

Groundwork is a federation of 15 charitable organisations operating across the UK. It runs programmes and activities to help people improve their prospects, working with communities facing multiple challenges, in places that lack social infrastructure and economic opportunities. It combines environmental and social impact, building the green economy while supporting communities to connect with nature and adapt to the climate crisis. From creating green jobs to supporting people with energy bills and retrofitting homes, it works to build a fairer and greener future in which people, places and nature can thrive. Working with government departments Groundwork UK (the national body of the federation) distributes grant funding for the UK Government, acting as an intermediary to make sure public money is invested in communities at a grassroots level. This involves bidding for contracts with central government departments and acting as an outsourced intermediary provider of grant management services. It’s worked with the Ministry of Housing, Communities and Local Government to get groups  such as parish councils involved in local planning, and with the Home Office to support charities tackling extremism. It’s also been contracted by the Department for Culture, Media and Sport to run the Voluntary Community and Social Enterprise (VCSE) Energy Efficiency Scheme - a £25m programme, largely distributed through grants. So far it has funded 1,100 organisations to carry out energy assessments to help them improve the efficiency of their buildings. The benefits of working with a VCSE organisation Groundwork UK’s position of having national grant management capability but also being able to leverage connections through its federation members allows it to promote grant programmes at a local level, supporting organisations to navigate through complexity and access funding they may not have been aware of. Chief executive Graham Duxbury states that government outsourcing this kind of work aims to ensure grants are accessible to smaller, local organisations that are often volunteer-run. He said: “Having knowledge of that sector and that space is hugely important in terms of designing the service. You’ve got to be aware of capacity restraints and limitations, you’ve got to understand how volunteer-led organisations work and how to communicate with them as well as what to expect in terms of their capability to manage due diligence processes.” This close knowledge of the VCSE sector has allowed Groundwork UK to develop a good understanding of what’s proportional when it comes to distributing money, which means it can give the contracting body a clearer idea of what money can deliver when directed to organisations of various sizes and capacities. The second major benefit of working with Groundwork is that it’s “really good at bringing together partnerships”, as it knows where the “deep pockets of expertise are in the sector”. Graham points out that the energy efficiency programme would not have been possible without the support of specialist organisations such as the Centre for Sustainable Energy, the Energy Saving Trust and Locality. Thirdly, working with a VCSE provider helps create broader impact, with “cross fertilisation being what you get from the sector”. Combining the social and the environmental is at the heart of Groundwork’s ethos, and the funding it distributes  can create other opportunities for VCSE organisations. As Graham phrases it: “A grant programme may allow them to do one thing, but we may be able to communicate to them other opportunities and provide them with added value; so when we’re managing grants focused on a social issue we can signpost local grantees to other forms of funding and provide advice that might encourage them to think about their environmental impact too.” What tips would you have for other VCSE organisations looking to work with government? A key tip Graham has for VCSE organisations is to “be visible to the departments to whom you think you’re relevant”, with an important part of this being to get on a government procurement framework. These are pre-procurement portals through which organisations enter their credentials and effectively write a bid to showcase what they provide and their ability to deliver. Groundwork is on a government framework on grant management services. Many departments use frameworks - with some, like the Department for Work and Pensions, referring to them as dynamic purchasing systems (or DPS). Often, if you are not on a framework, you cannot bid; they are effectively a pre-qualification process, so prospective VCSE suppliers should “find out if there are relevant frameworks for the kind of service that you look to offer”. The second main tip for VCSEs wanting to work with central government departments is to not forget that you can negotiate around certain terms of a contract. Groundwork has successfully had things amended in the terms and conditions of contracts, such as questions around payment. As Graham puts it: “Big businesses do this all the time, and we forget that, so we should have confidence that we can negotiate too and get a deal that’s right for us. Some things will never change but some things can and do.” Finally, Graham emphasises the importance in building a human relationship with the contracting department: “Remember that when dealing with government you are dealing with people. All good contracts are built on relationships so once you start to get to know the people on the other side of the fence and understand the pressure they’re under, such as managing public money and the finance and risk committees they need to report to, you get a better understanding on why things are done the way they are and what can and can’t be pushed back on. Never forget that any government contract is just a bunch of individuals trying to get something done.” Based on a conversation with Graham Duxbury, chief executive at Groundwork UK groundwork.org.uk

At its recent AGM in the City of London, social enterprise cleaning company Clean for Good announced that it was sharing 50% of its distributed profits with its workers. At a time when many employers are concerned about rising employment costs, this social business is showing that by investing in its workers it can deliver a ‘triple win’ – excellent customer service, financial dividends to shareholders and social impact for employees.   Clean for Good is a different kind of cleaning company, established as a social business to provide a fairer deal for cleaners and to drive change in a sector that is infamous for low pay and poor conditions. 50% profits shared with workers Clean for Good is only seven years old but has grown rapidly to a turnover exceeding £1m, employing 75 cleaners. At its AGM on 13th November it announced that it has now made an annual profit for the fifth year in a row, demonstrating that a responsible business can also be financially sustainable. The company also declared a dividend and announced that the company’s profits would be shared out equally between shareholders and employees, with each group receiving 50% of distributed profits. This is in line with the company’s highly unusual Profit Policy which is part of the company’s deep commitment to fair pay. A total of £20,000 of profits was distributed in November. Some 46 cleaning staff received a share of the profits in their November pay packet. A full-time employee will receive £378 of the profit share, with amounts varying depending on the hours worked during 2023-24. Most of the company’s shares are owned by the three founding charities, so most of the shareholder dividends will go to support other charities. Even for these charities, it is a powerful demonstration that philanthropic giving is not the only way to create a positive change. A triple win Clean for Good pays the real Living Wage and also provides better employment terms and conditions for its cleaners than most of its competitors – like occupational sick pay from day one of a cleaner’s employment. This approach has enabled it to deliver a triple win – high customer satisfaction, high employee satisfaction and financial returns to shareholders. A new independently researched Impact Report recently highlighted that the company’s cleaners were likely to have higher job satsfaction than the staff of the offices in which they are cleaning. Many employers in low pay sectors face higher employment costs arising from increases in the Minimum Wage and upcoming reforms to Statutory Sick Pay through the Government’s Employment Rights Bill. This is concerning many employers who see it as a negative, but Clean for Good demonstrates that paying higher terms and conditions is actually good for business. Clean for Good already pays the real Living Wage and offers employee benefits like occupational sick pay, all above statutory minimums already – and this has strengthened the business, not undermined it. What is good for workers can be good for business. Charlie Walker, Clean for Good’s Managing Director said: “At Clean for Good we don’t see our cleaners as a cost that needs to be managed down, but as our greatest asset that needs to be invested in. By sharing our profits we can demonstrate this value tangibly. It is great news for our cleaners but we also believe it is good for the business as staff feel valued, and recognised and this generates a sense of belonging and loyalty within the organisation.” Becky Morris, Finance Director for the Church Mission Society (CMS) and one of the company’s founding charitable shareholders said: “As a shareholder, it’s certainly gratifying to receive a dividend on the investment we’ve made in Clean for Good, because we believed – and still believe – strongly in its purpose and vision. And seeing the company continue to treat its employees fairly and sharing out the profits so equitably makes us feel even better about our investment in this model of enterprise.” Jacqueline Carrion, employed for over 5 years as one of Clean for Good’s cleaners, said: “This bonus makes me feel more valuable and more close to the company. I believe,  in London, that it is the only [cleaning] company that recognizes the values of the employee, by showing this generosity.” cleanforgood.co.uk