Under the Hood: Our Social-Financial Model
This post aims to show an ‘under the hood’ view of our organisation, Think for the Future. It provides an unfiltered insight to our business model, our financial ethos and approach, as well as how our financial model interacts with our impact model and core mission.
At Think for the Future we operate a social business model. This means that we ensure that our social impact is sustainable through harnessing a sustainable financial model which enables us to invest in our own impact and guarantees it's longevity.
Our Funding Model
We understand that within the social enterprise sector, many organisations opt for grant/funding based models, however we strive to build our social organisation with a commercial model at its core. We pride ourselves in operating a revenue model which is generated directly through the service contracts we hold directly with our schools.
We believe that the quality of our impact and our service should be directly linked to our revenue and our company growth. To put it simply, we are only financially sustainable and grow if we do a good job! And this is exactly the accountability we should have for delivering our young people and school customers a high-quality service.
We are also very careful as an organisation to avoid indirect funding that either pays for our service or subsidises the cost of our service for our customers. We define ‘non-direct’ funding as contracted income with an entity that is far removed from the beneficiary of our service, being the young person. A corporate funder would be an example of this.
The reason for this is we feel it can potentially cause a drift in service delivery and dilute the responsibility we have to our school customers, by introducing a third-party funder. This creates a risk of eroding the alignment of our service and target impact by reducing the accountability to be a value for money, cost effective service within the sector.
Profits & Self-Growth
A social enterprise or social business is defined as;
“a business with specific social objectives that serve its primary purpose. Social enterprises seek to maximise profits while maximizing benefits to society and the environment, and the profits are principally used to fund social programs”.
In short this summarises our ethos at TFTF – we use our profit to reinvest in our own growth, alleviating the need for external investment. This business model ensures our company remains strong but also ensures long term security for our school partners.
Our journey to self-growth has involved social investment in our early stages. We have had approximately £165,000 of loan investment over the past 8 years which we have almost fully paid back, plus interest. This investment was spent on our early-stage growth and was mainly invested in our core costs to grow our delivery capabilities.
It was important that we took on a social loan, as we wanted to ensure once we had achieved our early-stage growth that these funds were paid back, plus interest, to be recycled into more social causes.
Currently we turn over £2.1 million and are growing steadily into profit to allow us to further invest in our operations and to build up our reserves. At this point in our journey, it is important for us to find the correct balance with our overhead spend. This is another reason to advocate for organic growth funded through our service delivery, as it allows us to sensibly develop our overhead costs and not become too ‘heavy’ which could affect our long-term pricing. Instead, we have kept our costs at a functional equilibrium, meaning we can provide an effective, low cost*, value for money service and keep our pricing low for school budgets.
With a carefully thought out and perfectly balanced end goal in mind, all the above has led us on this journey to ensure we operate a highly secure social-business model that independently fuels our growth and development.
Our model is something we are justifiably proud of at Think for the Future as it ultimately strengthens and solidifies the impact we have within the education sector and ultimately with the young people we work with up and down the country.
As of 2023 we have over 80 highly dedicated full-time members of the team and because of the success of our self-funded growth we will be able to invite more people to join TFTF and further contribute to our social mission and service delivery.
From this point our development becomes exponential, and we are very excited to ‘write’ the next chapter of our story.