dai powell, hct group
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Social Enterprise: Going for growth
Dai PowellChief executive, HCT Group
2 November 2011
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HCT Group: Origins
■ Founded in 1982 as Hackney Community Transport
“To deliver social change through enterprise, empowerment and partnership”
■ In 1993 we won our first commercial transport contract
“To be a sustainable social enterprise, we must also be an effective enterprise”
■ A business model for hundredfold growth– from a turnover of £202k in 1993– to a turnover of £28.1m in 2010/11– 630 employees and a fleet of 325 vehicles
■ Surpluses reinvested to support the core mission
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Our enterprise model
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Our social model
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Social impact
■ Profits reinvested in the communities where they are earned
■ Transport for community groups– deeply discounted accessible minibus hire– 93,000 passenger trips in 10/11– 39% of groups say they would fold without it
■ Transport projects– 812 community bus – YourCar
■ Training for transport projects – nearly 400 qualifications for hard-to-reach unemployed– 74 job outcomes (10/11)– often delivered in partnership
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HCT Group – A growth story
■ A conscious ambition of rapid growth■ Growth driven by trade■ Eliminates dependency on grants ■ 20% per year, every year■ An industry that rewards scale
“The more we grow the business, the more we grow our social impact”
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Geographical Growth
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Turnover growth
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Growing away from grants
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Profit reinvestment outstrips grants
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Governance for growth
■ For-profit company board legal duty: – Maximise shareholder value
■ Traditional charity board legal duty:– Minimise risk to the charity
■ Creates a ‘can’t do’ culture■ HCT Group board culture (within legal
constraints):
“Maximise the good that we do”
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A culture for growth
■ A focus on growing the business■ Celebrating business wins ■ All staff know what success looks like■ Tomorrow won’t look like today■ Invest in growth■ Stay hungry!
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Investment for growth
■ Cost of grant-seeking vs investment-seeking■ Social investment a key part of our story■ Social investors seek both social and financial
returns■ They will need you to measure both – building
your capabilities
“When charities invest their reserves, do they also seek a mission-based social return?”
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The Social Loan
■ Adventures in high finance ■ £4m raised to finance expansion in 2010■ Quasi-equity – based on turnover growth■ Covenants based on social impact■ Allows investors to share in success■ Controversial?
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Questions? Comments?