Regenerative Finance & Staying Entrepreneurial

One of the most detailed pieces of work we have been doing over the last two years — and potentially one of the most imminent, significant changes for us —has been thinking about how CIVIC SQUARE is financed in the short term. Having grown TEDxBrum and Impact Hub Birmingham through volunteer hours, savings, working other jobs, crowdfunding and then running a revenue-generating model that helped to subsidise our previous investments and experimental Mission Birmingham work, we knew we needed to look for bold funding and investment in the transition to a sustainable business model.

Learning from Impact Hub Birmingham we knew it was going to be impossible to build upon this work on a shoestring going forward, but we approached the process of financing the crucial with care and a certain amount of unease. We knew being grant funded for the long term could mean getting used to it, mission drift towards hierarchical structures, complacency replacing ingenuity, and the loss of bold entrepreneurialism, all of which could pose risk to the organisation’s future. We hope it goes without saying that we don’t think activities who have long term grants or require them in order to do work for the long term are bad; we just didn’t feel it was the right model for keeping the integrity of our particular work and explorations in tact, thus leaving those grants and resources for the work of others that really need it too. Lots of funders challenged us on this, saying we should be asking for more, and in many ways they’re right – work and people must be properly resourced in order to flourish – however, it is important for us not to get too comfortable in a way that affects the pace, energy and intention of our work, nor positions us too differently to those we wish to work alongside.

We were built on flat pay structure using the Living Wage as a base, and it was important to us that this wouldn’t change overnight if we could secure funding. We designed a 3 year transition plan that would be a ‘Living Wage’ for the organisation and cover the core costs so we could concentrate on the work required, allowing us to have a bit of breathing room after 6 years of the precarious balance of mission work and the need to earn substantial revenue every day. Crucially, at the end of Year 2, the funding amount we outlined quickly reduces month-to-month as we wean ourselves off, preparing to move back into a sustainable business model. We also chose to focus on being in line with average local wages rather than ‘market rates’, and we feel this really matters in having equitable experiences with those we work with, reflecting the wider neighbourhood ecosystem that we are looking to be just one part of.

“Ultimately, the investment needed for CIVIC SQUARE is unlikely to come from one place or in just one form. We do believe that the financing of this style of investment could be in itself an important experiment for the social finance sector. The aim of the next three years is to move towards a regenerative business plan that will allow investments to continue to circulate and understand value in a range of ways. We are inspired by the pioneering work happening in Canada as part of the CIVIC CAPITAL movement. We look forward to learning from them and sharing our experiences, and finding partners in the UK interested in exploring further.” —Andy Reeve, Director of Regenerative Economics

As part of our inclusion in the UnLtd Pioneers programme, we worked closely with Mark Norbury and his team to approach a range of funders who might be interested in a bold project; who would support us in the short term, be comfortable with experimentation and ambition, and who would be collaborative learning partners who wanted us to have strong foundations to succeed in the next 10 years.

Just before Christmas 2019, having had 100s of conversations over the last few years and a lot of deep proposal work, which we will seek to share in more detail this year, we were delighted that National Lottery Community Fund, Paul Hamlyn Foundation, and Esmee Fairbairn Foundation came together to collaboratively fund the first phase for 3 years (2020 – 2022) as we build CIVIC SQUARE and raise the investment for it. This is a totally new era for us, and we continue to pinch ourselves in believing we have this breathing room as we have never known anything like it. We will seek to sweat every penny into being as useful, cost effective, value for money and contribute to a truly sustainable future from 2022 onwards. We would particularly like to thank Mark Norbury, Caroline Mason, Moira Sinclair, Charlie Leadbeater, and Sarah Handley for all their work and investment of time to help us make a successful application. This took nearly 18 months to come together, and having your partnership will be transformative for us as an organisation, and we hope to multiply its benefits in many ways over the coming decade.

“The challenge you are addressing is: how do incumbent communities benefit from the vast inflow of resources which comes with a development like this? What are the economic, ownership and governance models which allow distributive-by-design solutions (as Kate Raworth would have it) to work, flowing a fair share of the resources to public value and the least well off? That’s a big challenge. If you can find a model that cracks that you are solving a problem that communities face around the world, so CIVIC SQUARE could be a really valuable model. The other thing is whether or not you succeed in terms of your development and the team will be fantastic learning, out of which will come all sorts of things we cannot yet predict”. —Charlie Leadbeater

We would also like to thank long term ongoing partners such as Urban Splash, WMCA, 00, Dark Matter Labs, DEAL, Open Systems Lab and funders who helped to support the development work of CIVIC SQUARE over the last few years such as GBSLEP, Michael Sheen, Power to Change, Thirty Percy, UnLtd, Big Society Capital, Big Issue Invest, NESTA, whether in cash, in kind, in advice or even in repayable debt you helped us to secure and meticulously repay. This kind of work is always a group effort and we are incredibly grateful for the belief, ambition and support each of you have given, and continue to extend..