Grow it Yourself: breaking the social and commercial mould

Pioneering social entrepreneur and Ashoka fellow Michael Kelly found himself falling between two stools when it came to raising funds for the next stage of his Grow it Yourself (GIY) social movement. His concept for a Grow HQ training and education centre in his native Waterford City turned out to be too social for the commercial banks and too commercial for social funders.

“I thought we would be perfect for the social lenders and was very surprised when they didn’t really like us,” says Kelly. “I think they felt we were too much like a business. The commercial banks thought we were too social. We did get a mortgage from AIB, though, but it wasn’t enough to fund the project.”

He founded GIY in 2008 as a not-for-profit social enterprise dedicated to promoting the wide-scale growing and eating of healthy seasonal food to improve physical and mental health, wellbeing and self-esteem. GIY now supports over 540,000 people and 9,000 community food-growing projects each year while generating over €1 million turnover.

Back in 2013 he decided it was time to take it to the next level and build a new national education centre.

“I wanted to create a physical representation of movement,” he recalls. “We needed a place to show our view of the world and what it’s all about. We had always done business out of support office and most of our work is in schools and community groups and with companies around the country. I wanted a place to show what home-grown food can taste like.”

Fresh produce

The vision for Grow HQ was a garden where fresh produce would be sown and harvested year-round. There would be a kitchen to prepare, preserve and cook that food, as well as a cafe that would serve only the freshest seasonal vegetables grown by GIY on its own site. It would be a place where people could socialise, be well looked-after, and enjoy good food. Visitors could also buy seeds and compost on their way out to cultivate home produce, or take a course to learn to grow or cook. The entire project would be financially self-sustaining.

But first it had to be funded to the tune of €1.5 million. “I would love to say that part of the plan was to be innovative when it came to funding, but it was just necessity,” says Kelly. “We got a €400,000 mortgage from AIB, we got about €250,000 from State sources including a grant from the Department of Health, support from the Waterford Local Enterprise Office, and some sponsorship from Bord Bia.”

And then came the innovative pieces of the puzzle. The first was straightforward sponsorship through which Kelly raised €140,000 from a number of leading Irish and international companies. The second was the “Grow Circle Challenge” which saw 25 companies promising to pay €10,000 each over three years in return for GIY training for employees and other benefits. The really innovative piece there came from securitisation of this income stream so that the €250,000 could be raised upfront from a financial institution.

And then came the community bond. “We had to learn how to raise our own finance,” he says. “We constructed the community bond which offered a 5 per cent return. It was tremendously successful and brought in €300,000.”

Dilemma

Ashoka support member and social finance expert Sir Steve Wilkinson explains that the dilemma faced by Kelly is the reason why most social finance comes from entrepreneurs.

“They look at the people involved, the business model and the numbers, but they also want to put their money into something that they believe is a good thing and are willing to write off their investment. Any money they do get back can be redeployed to another worthy cause.”

“Ashoka fellows are extraordinary social entrepreneurs,” says Ashoka Ireland country director Serena Mizzoni. “They are the investors and game-changers of the citizen sector and the revolutionaries behind many of the greatest social movements of our time. Unfortunately, having these traits does not immunise you from the basics of business – cash is still king. We are all too aware of the limitations of the charity model: risk and investment aversion, unpredictability, a slave to the donor. Ashoka’s social finance work came about in response to these limitations. For social solutions to realise their full potential, including scale, they need to be sustainable, and, in many cases, that means being financially viable.”

And Grow HQ has achieved that viability. “We have a double bottom line and we treat them both equally,” says Kelly. “The social impact and the income we generate are treated as two sides of the same coin. We have been open for 12 months and the centre has been very, very successful. We are in a great location near the hospital on the ring road and have had 50,000 visitors so far. We have generated €1.1 million in turnover this year and are targeting €1.6 million next year. But we can see the need for more capital down the road, and the challenge of raising it hasn’t gone away. There’s got to be an easier way to do it.”