This is a CTP of initiative: FabLab 3 (North‐East England)
This CTP describes the decision made by co-founders to articulate their deliberate decision not to seek public funding, despite moving through points where the organisation was cash constrained.
This organisation began life as a meet-up group, moving between temporary spaces, before taking up its main premises in summer 2011. Under the guidance of the original founder A, the group’s directors never sought out or chose to receive any public funding for their mission, instead relying on a combination of donations of equipment and a revenue model based on rented hot-desks. Based on his previous experience with public sector bodies, A felt strongly that public funding would constrain the freedoms of the organisation, binding it into pathways that might not otherwise have been chosen. As one organiser described:
“We decided early on not to go for public money. I knew that from the second time I met A, who’s also anti-funding. I’ve worked on publically funded projects before and it always diverts you from your original intentions. You think you want to do one thing but you end up having to tick all these little boxes for them to say ‘Yes’, and then it’s always one more thing.”
Whilst this sentiment was shared across the organisors, it was never openly articulate until the organisation fell into financial difficulties in early 2015, caused by costs incurred through their business premises, and a drop in the number of members taking up deskspace. In the face of this challenge, a new organiser with experience in charity and community development set up a group meeting, asking the team to clearly articulate how they thought funding would be raised:
“[He] forced us to sit down and have a really serious decision about the financial side of things, and make that decision and say ‘We’re not going to go for public funding’. We looked at our finances, and had a show of hands. It was good, actually – we’d all be so constrained by what we thought of [the organisation] that we couldn’t think properly about it, so it was good to have a new pair of eyes. He made us make the decisions on the things that we’d all been skirting around”.
In the aftermath of the meeting, the organisers developed a clearer vision of how funding would be raised in the organisations and (as described in later CTPs) their own vision for the organisation.
This CTP was shaped by the financial difficulties which the organisation experienced in early 2015. As described in later CTPs, the business model of the organisation was based around renting out desks in the “clean space” of the office area to local freelancers and small businesses. At the time that the organisation took up its main premises in 2011 (after an initial stint in a smaller space), there was little in the way of similar co-working spaces locally, and the organisation offered something new, as one organiser described:
“Hotdesking funded everything. There wasn’t much like it in Liverpool at the time. You’ve got a very fragmented tech scene, spread over 16 different quarters, some creative, some technology. We [organisers] allowed ourselves to have permanent desks, and then we asked other to pay to hotdesk.”
The space was kitted out with wi-fi and meeting room access, and people could choose to pay for permanent desks, or book through a pay-as-you-go scheme (with cheaper options offered to those who also took up workshop membership. Over the subsequent four years, however, other co-working spaces emerged in Liverpool which were, as the organisers admitted, more attractive that their own:
“In the early days, we had the advantage of being the only co-working space in Liverpool. There are at least 6 now, and people bounce around them. This place is good for bootstrapping, but it’s not really the most pleasant place to be in – it’s quite run down. It doesn’t feel very corporate. There are probably better hot-desk spaces available now”.
In late 2014, the organisation hit a “perfect storm” of financial difficulties around cash flow, with the organisation simultaneously receiving bills for their business rates from the local council; and the “natural ebb and flow of people coming in” dropping (“It gets quiet over Christmas and summer”). This slump in income and associated fears around the continued survival of the organisation drove the CTP.
This CTP was shaped by events including the financial difficulties which the organisation experience in late 2014/early 2015.
The organisers reported few frictions or difficulties between themselves around the decision to not to apply for public funding, with the team all quietly falling in line amongst each other: “It was never really a formal decision in that first four years. We never really looked for [funding], never really checked whether anyone was willing to give funding; it was just a general reluctance to go down that route”.
Within the group though, organisers’ motivations varied for not chasing public funding. As detailed above, some felt that public support constrained the aims of the work – “It was always a concern that it would be a millstone around our necks; that LEAs [Local Education Authorities] would enforce a way of working, rules to follow, and no-body was keen on that”.
Other felt that some public funding bodies were only interested in proving that they themselves had ticked boxes around local development, without having any specific care or interest in the work itself:
“I’m completely ideologically opposed. You see councils throwing millions at whatever city initiative is this year’s thing, spending all this money without checking what’s already out there. One guy [from the council] came to us for a look-round and said ‘Oh, this is perfect’ – not because of what we did, but because we’d make him look good, scrappy little makespace, social enterprise, all that jazz. It might not be their fault they do all that stuff, but I’m sure there’s a level of wilful ignorance”.
Finally, some organisers described how they had no personal problems with grant funding apart from the labour – “I really don’t mind, but honestly, I just don’t want to do the paperwork”.
Some of the organisers did however also chastise themselves for not having been more aware and vocal about the financial straits of the space, and the limits of their business model:
“I don’t know where we thought the money was going to come from if we weren’t going to get grants. Like my kids think there’s a magic money tree out in the back garden, we thought we could rely on hot-desking and we all knew that would impact growth because of how difficult it was to get people to use desks.”
The CTPs was anticipated, and seen as critical. The organisers were had been aware for some time that the space was skating close to financial difficulties, prior to the CTP occurring – “It gets really close, really frequently – I often end up taking a desk that I don’t use for a few months just to help out”.
As this quote illustrates, the operation of the space was extremely contingent on the amount of work which the organisers themselves put in, which had knock-on effects on their own work:
“The big battle was that [this] is just a group of people, only 3 or 4 people running it, all entrepreneurs in our own right. They carry the bulk of the work, and were doing everything at the expense of their own businesses. It’s the single biggest issue we’ve kept on struggling with – how their businesses suffer because of the amount of focus we need to put on the space”.
In theory, the £30 per month workshop membership offered by the space would sustain the revenue for hot-desking, but the organisers had also been aware for some time that this business model wasn’t working: “For at least 12 months, the workshop was really poorly attended. Lots of people would drop in for half a day, but no-one took up membership, and then on top of that the hot-desking was just a drip-drip, with people coming and going”.
Had the organisation not experienced severe financial difficulties, it is likely that the organisation would not have been given the spur to address their financial assumptions; or consider alternative pathways. One organiser also felt that, despite being happy with the current trajectory of the space, he would have chosen a different pathway were they to start again: “Now, I would argue more strongly for taking grant funding in the early days. It does surprise me after 4 years that we’re still alive”.
This CTP supported the specific transformational aims of the organisation, specifically around balancing the freedoms to pursue the work that they wanted to undertake without being beholden to external bodies, with the associated need to be financially self-sustaining. In discussing and articulating their desire to not to go for public funding, the organisers acknowledged that the decisions they had made in this area, and how this had shaped the organisation: “We definitely took a different direction to what I’d expected because of the decision not to go for grants”.
This learning also included recognising the level of funding which had been turned down, through passive non-articulated practices, and how that had shaped their relationships with local government bodies:
“We saw that whenever we’ve engaged with the council or the local enterprise what-have-you, the first thing they offer is ‘We can get some funding for you’ and we always said no. I don’t think we helped ourselves. In the past, the relationship we had with them was not great, to be honest, but I think it’s a little better now. They might actually like us”.
As this quote illustrates, the CTP forced the organisers to identify that even passive actitivies of refusal had had effects
This CTP laid down long-term consequences for the organisation, inasmuch as it forced them to put in place sustainable business models around funding and to actively consider how revenue would be generated in the coming years (as detailed in later CTPs).
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