Community businesses generate more income than other groups

Community businesses generate more income and are more invested in shaping social and public policy to improve their local area than other types of third sector organisations, according to new research.

A report published by Durham University in collaboration with independent trust Power to Change, Garfield Weston Foundation and the Community Foundation serving Tyne & Wear and Northumberland, shows that just over a quarter (26%) of community businesses substantially increased income in the last two years.

Researchers also found that the proportion of community business which rely primarily on public sector sources has fallen from 49% to 39%.

And employment in many community businesses has risen over the last two years, with 29% reporting a rise in full-time staff and 43% reporting rising numbers of part-time staff.

The report said community businesses have a higher level of income than other general third sector organisations: 63% have income over £100,000 compared with 36% of general third sector organisation that earn income and only 12% of general third sector organisations that earn no income.

And it concluded that community businesses were much more likely to have used reserves to invest in new activities such as buying property, developing a new service or employing a development worker (17%), when compared with general third sector organisations (10%).

‘The key finding of this report is that community businesses are resilient entities,’ said report author, Professor Tony Chapman.

‘It is their determination to be financially independent, at least in part, through self-generated trading activity that sets them apart from other third sector organisations when it comes to resilience.’

Ailbhe McNabola, head of research and policy at Power to Change, commented: ‘Community businesses perform a unique balancing act, marrying enterprise and entrepreneurialism with a goal of making a real difference to places where they are based. These attributes will be important as places begin to recover from the social and economic impacts of the Covid pandemic. Community businesses can play an important role in the places where they work in the months and years ahead.’

The full report – Community Businesses in the North of England 2020: New comparative analysis from the Third Sector Trends study – is available to read here. 

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