New longitudinal research shows that the impact of enterprise grants extends beyond their financial benefits, building capacity and strengthening organisations to better deliver their missions. Robin Chu from the School for Social Entrepreneurs shares the findings.
Across the funding sector, the conversation about financial resilience is shifting. As need continues to rise (and become more complex) and grant budgets remain under pressure, many funders are looking at how organisations can strengthen their income through enterprise-led approaches, not as a replacement for grants, but as part of a more balanced and sustainable model. We see this reflected in our growing membership of funders at the Enterprise Grants Task Force.
This growing interest reflects a wider recognition that social purpose organisations, including social enterprises, community businesses, co-operatives and trading charities, are often closest to their communities, their opportunities and their markets. At the School for Social Entrepreneurs (SSE), we’ve long believed that with the right combination of funding, skills and support, organisations can generate income in ways that deepen their impact rather than dilute it.
Since launching in 2016, the Match Trading programme has delivered over £8m to more than 1,200 organisations, many in the UK’s most deprived communities. Alongside incentive funding, participants take part in peer-to-peer learning programmes and receive practical business development, helping them build the confidence and capability to strengthen their models as well as grow their trading.
Our own programme data has consistently shown strong early results. On average, organisations increase their earned income by around a third within the first year, significantly higher than traditional grant approaches. Many also strengthen their leadership, financial management and commercial skills, laying the foundations for longer-term resilience.
At its heart, Match Trading is about agency, trusting organisations to know what’s best for their communities and giving them the tools, space and incentive to grow on their own terms. For the organisations we’ve supported, that has translated into expanded services, more training and employment opportunities, and increased volunteer engagement.
Over the past decade, Match Trading has moved from pilot to practice to scale, backed by a growing group of partners including The National Lottery Community Fund, Power to Change, Lloyds Banking Group, Access – The Foundation for Social Investment, and more recently the Greater London Authority and City Bridge Foundation. It has become part of a wider movement of enterprise-focused funding across the sector, championed collectively through the Enterprise Grants Task Force along with other enterprise grant products such as The Enterprise Development Programme led by Access, the Foundation for Social Investment and the Scaling Up Awards from UnLtd.
Since Match Trading’s development, two important questions have remained:
I. Do approaches like Match Trading create lasting change, or only short-term gains?
II. Does a stronger focus on trading risk pulling organisations away from their social mission?
Organisations increase their earned income by around a third within the first year, significantly higher than traditional grant approaches. Many also strengthen their leadership, financial management and commercial skills, laying the foundations for longer-term resilience.
New insights from longitudinal research
We’re excited to share that the LSE Marshall Institute has just published a three-year longitudinal study of Match Trading, and the findings are encouraging.
The study engaged with organisations that participated in Match Trading prior to the pandemic, tracking long-term changes in commercial capacity, leadership, confidence and organisational behaviour.
The effects last
Several years on, organisations continue to demonstrate greater agency, confidence and enterprise-oriented behaviour. Incentive-based programmes like Match Trading appear to create a lasting “nudge”, not just increasing income, but supporting a shift in how organisations plan, make decisions and pursue opportunities.
Importantly, the research points to the role of capability-building in this shift. Participants described becoming more structured, more strategic and more confident in their financial and commercial decision-making.
Mission is not compromised
The research also found that increasing earned income does not come at the expense of social purpose. Organisations were able to grow their trading while staying focused on their mission and the communities they serve.
This evidence is both encouraging and practical. The impact of the Match Trading programme isn’t just financial, it’s behavioural and strategic, giving organisations greater confidence, stronger leadership and more control over their future.
What this means for funders
The research offers clear lessons, but it also raises practical questions for funders thinking about supporting enterprise-led growth:
1. Look beyond short-term income growth
Match Trading shows that the deepest impact isn’t just financial. Funders should consider how their support can help organisations build confidence, strengthen leadership, and develop strategic behaviours that last well beyond the grant period.
2. Think strategically about mission and market
The research confirms that increasing earned income does not need to come at the expense of mission. Funders can support organisations to balance commercial growth with social purpose, but doing so effectively requires thoughtful programme design, collaboration, and ongoing learning.
3. Collaborate, learn, and scale what works
Match Trading is part of a growing movement of enterprise-focused funding. Funders can engage in the Enterprise Grants Task Force, partner with the School for Social Entrepreneurs, or develop their own approaches.
What’s next
We’re excited that the full LSE report Match Trading and the behaviours of community businesses and social enterprises is now available.
SSE and the Marshall Institute are convening a public launch event at LSE on 12thMarch, exploring the findings and their implications for funding and policy.
The LSE launch event will feature a deep dive into the research findings, followed by a chaired panel discussion with Tim Davies-Pugh (Chief Executive, Power to Change), Alastair Wilson OBE (Chief Executive, SSE), Professor Jonathan Roberts (LSE) and Dr Kerryn Krige (LSE).
The panel will explore questions such as:
· How can enterprise grants be designed to support lasting organisational change?
· What does the research tell us about balancing market activity with mission integrity?
· How can funders and policymakers best support organisations to build enterprise capacity and resilience?
Register for the LSE event on their Match Trading findings.
The Funders Collaborative Hub publishes a range of perspectives. The views expressed here are those of the authors, not necessarily those of ACF.
