Recovery Hub set to grow from Oak to Forest
There is some kind of poetic justice about an unused pub, called The Oak, being lovingly transformed into a rehabilitation centre for addicts. We didn’t see poetry when we read the Recovery Hub’s business plan. We saw a proven need, a viable business, huge potential social impact and the type of commitment that could make this business work, not just in Ipswich, but nationwide, as we explained in our 2016 Annual Review.
Suffolk social enterprise’s social and economic impact proves its worth
We were right. One year on and, as reported on by The Ipswich Star, the business’s first recovery hub, The Oak in Ipswich has grown from strength to strength:
- Helping over 70 addicts begin and continue their recovery journeys
- Creating 10 full time employee jobs and 4 volunteer placements, as well as two student social worker placements
- Maintaining affordable prices at around 33% lower than next cheapest option, but 50% less than the average market rate
- Retaining its homely feel and community purpose, in spite of success
- Attracting over £30,000 in donations in 2016
- Delivering an 80% successful completion rate for those coming into treatment
- Delivering affordable treatment to a marginalised section of society
- How East of England Cooperative’s support helped Suffolk social entrepreneurs
Simon Aalders and Daniel Farnham, the founders of Recovery Hub, only turned to Foundation East though, after The East of England Co-operative, made them aware of our services. The East of England Co-operative, a corporate member of Foundation East, believed in the entrepreneurs’ vision so much, that, not only did it refer Simon and Daniel to us for funding, it granted them the lease on The Oak at very favourable rates.
“When you have the drive and ambition to turn your ideas into a business reality the big block is finance. Foundation East and the Co-op saw the potential, and were prepared to back our plan. The high street, and most mainstream charitable lenders just don't have the foresight and business acumen required to really support start up social enterprises. Quite simply without Foundation East and the East of England Co-op the Recovery Hub would not have happened, the opportunity to make a real difference would have been lost, and the people and communities we help would have remained at risk,” explains Simon.
Why is Responsible Finance a positive way forward for social enterprises, such as Recovery Hub?
“I believe we are a nation that produces excellent entrepreneurs, but our entrepreneurial instincts are stymied by a big bank, risk averse, 'big charity', bureaucratic and 'big bang' project ideology. Foundation East targets the right Social Enterprise projects, releasing the potential of driven, motivated and creative people, becoming the financial engine for the kind of projects that really change the way we live. Having Foundation East walking alongside us as we established our business, and there to call upon whenever we need, gave us that crucial support and confidence that is missing from any and all mainstream lenders. When you take the leap and set up your own business, confidence is key; Foundation East gives you that confidence. They don't choke off your energy with administrative red tape and bureaucratic interventions; they help share the risk with you, and get you thinking through your ideas. Providing the right kinds of expert challenge you need to progress. Charitable foundations, and other grant making bodies just don't do this. When we were called a nation of shop-keepers, I think they recognised our national strengths of creativity, drive and entrepreneurial talent. Big doesn't like small, but Foundation East recognises that SME's are the engine room of the economy, and responsible social finance provides the fuel."
Responsible Finance gets businesses investment ready
The success of Recovery Hub’s first rehabilitation centre is unquestionable. This makes its longer-term goals of becoming a sustainable social franchise more and more achievable. And with the proven track record of financial viability Recovery Hub will have when its loan with Foundation East comes to an end, it will find it easier to raise investment when it comes to opening the next centre, and the next, and the next.
Whilst we invested in an Oak, future investors will reap the rewards of investing in a forest…
Why are social enterprises turning to Responsible Finance providers?
Foundation East is a Responsible Finance provider, a Mutual Society and a membership organisation. We reinvest all our profits into helping local SMEs across the East of England, and not just those that are setting up as a social enterprise, to set up and grow. As reported last month though, more and more social enterprises are turning to us for help, as there is a perception amongst other investors that they are very high risk.
Our experience is that social enterprises are not especially high risk, and are becoming even less so as the social enterprise movement continues to grow, perhaps as a reaction to more and more ordinary people not feeling the benefits of strong economics and finding themselves on the margins of society.
Lack of funding the symptom of inadequate public service programme and poorly planned Regional Growth Funds
It is our view that the UK government must, and indeed will, wake up to this reality and start to put measures in place to address it. Not only is its public service programme inadequate (we agree with Social Enterprise UK’s CEO Peter Holbrook on this), its Regional Growth Funds are due to run out this year too, despite a huge growth in demand.
Help us to deliver further fair finance to SMEs across the east of England
Foundation East is committed to campaigning for and delivering fair finance to businesses across the East of England. Please help us in this quest by sharing this post, or, even better, by sharing this post and becoming a member so that you can help us to help more social enterprises like Recovery Hub.
Register for Cambridge Social Ventures’ Social Venture Weekend
If you feel inspired by the Recovery Hub story, and have a business idea that suits a social venture framework, then we strongly encourage you to register for Cambridge Social Ventures’ next Social Venture Weekend from 24-26 February 2017. There’s no better way to get a social venture off to a flying start in the East of England…