Finding Funding for your care co-operative

Your cooperative will need funding at different stages in its development.  This resource looks first at how you can get grants to help you with your initial ideas and plans, before you are in a position to start trading as a care provider.   It then looks at how you can get working capital - money that will enable you to set up your services prior to actually trading (e.g to recruit and train staff, market your services) and as a cushion while you develop your customer base.

Start Up Funding

You will need some funding and resources to establish your co-operative before you are in a position to actually start to deliver care services.  So getting some money in a bank account needs to be considered early in your development.  This is called start up funding and is different from getting funding to start trading as a care cooperative.

The activities that are likely to need funding at this stage could  include:

  • Meetings to get community support and feedback - room hire, refreshments, printing posters
  • Setting up a website with information about what you are planning.  This can include an online form for interested people to contact you, to enable you to build up a mailing list 
  • Sending out a newsletter or other information - try to do this by email if at all possible but some people may not have access to this and will need paper copies. 
  • Paying for steering group members to attend relevant training or conferences 
  • Costs of registration of an incorporated organisation ( see below for explanation)
  • Membership fees to organisations such as Coops UK - which can provide access to specialist advice and support
  • You could need to pay for legal costs on setting up your organisation, taking on a contract or employing staff
  • You may need to get financial advice on your business plans

Support in kind

There may be local schemes for you to get free or ‘pro bono’ support from local businesses.  Check with your local development agency. (see below) Support organisation such as Coops UK are also a source of specialist advice.   Reach helps organisations find skilled volunteers.

Bank accounts

Funders will want to pay any grant into a bank account in the name of your organisation.  It will need to be set up so that at least 2 people are required to sign cheques or withdraw money (often over a limit so that small purchases can be made quickly)

Most banks will offer accounts for not for profit organisations, but most will have charges so investigate options.  

We chose the Cooperative Bank.  Although it is no longer actually a cooperative it does have an ethical policy   Other alternatives to HIgh Street banks include Unity Trust (set up by Trade Unions) and Triodos which has an environmental focus

The bank will want to see a copy of your governing document.   The signatories will need to provide full ID to comply with money laundering regulations. 

Your organisation’s legal status and getting funding

Any group of people can set up an organisation by adopting a set of rules ( constitution or governing document) setting out your purpose, aims and how you can make decisions.  You may want to do this as an interim measure only to enable you to set up a bank account and apply for funding.  This will allow you time to consider what sort of cooperative structure will be suitable for you in the long term.

Guidance on writing a simple constitution and an example can be found here or you could adapt one from an organisation you know.  CCCV was grown from a group called Kirklees Solidarity Economy Network so we applied for our first funding under their constitution which can be found here  (need to add link to document).  Some funders do require that funds are paid to an incorporated organisation that will hold money on behalf of a newer organisation. 

This type of simple constitution is not suitable for a cooperative that plans to employ staff, lease premises etc so it is only for use to enable you to move more quickly if there is a smaller funding opportunity. It does not give officers or members any liability if the organisation gets into debt.  To trade safely and reduce individual liability  you will need to become an incorporated organisation.  This means a formal, registered organisation such as a community benefit society,  cooperative society or community interest company.   These organisations provide limited liability against financial losses for members and officers (except of course if there has been fraud or other wrongdoing).  See Coops UK  for more information on legal options

Local development agencies and other support

Many areas have an organisation that is set up to provide advice and support to local not for profit organisations on all aspects of their development and management.  This can include holding funds on behalf of small organisations. They may be called (place)Voluntary Action or Community Action or similar, but may also go by different names.  There is information here but it does not cover all these types of organisations so if you area is not covered then check locally.

Most local councils have a team that offers support to businesses, and some have teams to support third sector and community activity so you should always find out what support is available locally.    

National organisations that may have useful information and resources in addition to Coops UK  are the My Community website;    Power to Change (community business support and funding)    NCVO (general third sector support)

Funding for community businesses

There is some funding specifically to support new community businesses so investigating these should be your first step.  Looking at the My Communityy website is a good start as it has specific resources and information for community businesses.  Power to Change is a charitable trust specifically established to fund community business so do look to see if they have current funding programmes that will meet your needs.   For start up funding they have the Bright Ideas grants, which CCCV was successful in applying for.   It is unusual in that it provides dedicated professional support to help you develop your business idea before you can access the grant money.    If you plan to apply to Bright Ideas then be aware that they will only pay money to an incorporated organisation, so you will need to identify an organisation willing to hold money if you are not at that stage.   The general principles of applying for funding that are covered below apply equally to Bright Ideas.

Bright Ideas   

This is a funding programme run by Power to Change that specifically supports new community business in their initial planning and start up phases.  You will initially get help from a community business adviser with relevant expertise, and can then apply for up to £15,000 to implement your plans

Cooperative Care Colne Valley was successful in getting Bright Ideas funding which was crucial to moving forward.   Our adviser assisted with business planning and financial projection, incorporation, and community shares.  We used the funding for marketing, training and project support.  Getting professional advice at an early stage was very helpful in getting us to move forward.

A copy of our application to Bright Ideas is at  (LINK) but make sure you use your own words and communicate your vision and plans.

The advantage to us of applying for this funding was that it is specifically for community business ( some funders are less happy to support social enterprise) so the aims of the fund and the questions on the application form fitted our vision.  They also understood that progress can be uneven, and that plans may change due to new information or changed conditions.

The Hive  is a support programme run by Coops UK.   It provides access to a package of support for coops at different stages of development.  This can include direct one to one support for business development, skills training and peer mentoring from existing coops. You can apply for support.  Although not a cash grant this has considerable value to help you develop robust plans and establish your organisation

Local funding

Many local councils have a grant scheme to support local organisations.   Councils are facing budget challenges, but can be open to supporting projects that will help them deliver essential services more cost effectively and with excellent quality.   The care cooperative model does this, so do talk to your local councillors and council officers at an early stage to see how they may be able to assist.  When you have these conversations it is important that you can clearly state your vision and aims, and how it will help them meet the needs of vulnerable people.   Even if you plans are still in development having a clear vision of what you want to achieve is essential to convince others to  believe in what you are doing and to support you.  This could be a one or two page summary that you can share.

Establishing good relationships with councillors and senior managers in our local authority helped give us credibility when we applied to a grant scheme to support new projects in social care and we were awarded the maximum funding available

 Many areas have a Community Foundation specifically set up to support local projects.  If so get in touch and talk to them about your plans and see if they are willing to consider funding it.     You can find out if there is a Community Foundation in your area at  UK Community Foundations: Homepage

How to find other funding

If the suggestions above are unsuccessful then you will need to look more widely for funding. 

There are many potential funders both national and local with a wide range of criteria for awarding funding.   Therefore the first thing to do is to get an idea of what grant funders you could be eligible to apply to.   You need to find those that will fund social care work aimed at the people you want to support, in the area you are based in, for your legal status of organisation, and for the amount of money you need.  You need to be aware that funding is very competitive, so you may need to make several applications before being successful.

To start with, look at a general funding database such as Funding Central or Grants online  .  They allow you to search for potential funders by the above criteria, give you an idea of what is available and enable you to target your efforts.  Your local council website may also have funding information. Your  local development agency will generally offer funding advice, which may include training on making better applications.  

The National Lottery Awards for All scheme gives grants of up to £10,000 for projects that benefit the community and has a quick turnaround.   They fund social enterprises, but not those that distribute profits to members so check that you are eligible to apply.

Things to consider when looking for funding

  • Be clear about the benefits of what you are planning and the difference it will make in your community.   This is becoming very important to funders who want to understand the impact that their investment makes
  • It can take a while for decisions to be made about applications so allow up to 3 months. 
  •  Be aware of application deadlines and make sure you meet them
  • Some funders have maximum grant amounts so don’t ask for more
  • Most grant funders are oversubscribed and it is competitive.  If you are not successful then if possible get feedback and try elsewhere with an improved application
  • Make sure you read the guidelines for each funder and tailor your application to their priorities. Sending the same application to multiple funders is unlikely to work.
  • Grants are not made to cover costs you have already incurred 
  • You may need to get a group that is already incorporated to hold the money for you. Local development agencies will often offer this service
  • Get someone who is not involved to read the application and ask them if they  understand what you intend to do.  If they don’t, nor will the funder
  • Have evidence of the need in your area - your local council may be able to help with this.  Many local councils publish statistical and demographic information about the area e.g. number of older people, number of people with long term health conditions. They will also, with the NHS, have a local health needs document called the Joint Strategic Needs Assessment which is often published on their website

Once you are successful in getting funding then it is very important to start collecting evidence so that you can show that you have achieved what you promised to do in your application.  Doing this will make it easier to complete the reports that funders will request.  As well as numbers ( e.g how many people attended a public meeting, how many people on your mailing list)  think about recording more qualitative information.   Make you collect and record positive feedback from people that you engage with or any other successes.

You will also need to set up an accounts system if you have not already done so to enable you to track and report on expenditure.

Implementation funding

After doing your initial development work you should have evidence of community support, a steering group with people with relevant expertise, be incorporated as a cooperative  and have a business plan. You will now need funding for the next stage.

A business plan is a crucial document in setting up any organisation.  It is your detailed document covering what you are going to do, how you will do it, how you will promote it, and most crucially what income you expect to generate, and what costs you need to cover.  If you are new to business planning then check out the advice available from Coops UK

You will need some money in the bank (working capital) before you can begin trading.

Your business plan should show that you can cover your costs when trading, but you will need some money in the bank to get started.   Before you can start providing care you will need to be registered with the Care Quality Commission.  This will incur costs before you have any income.  

Things you  will need to pay for include:

  • Salary of your registered manager (required for CQC registration) which will be a full time position
  • Payment to your nominated individual - this is usually a board member who supervises the registered manager and is the main link between them and the board. This will be a part time position XX days per month (need to check
  • Office rental (your registration is for a specific base)
  • Recruitment costs and DBS checks for staff
  • Equipment e.g furniture,  IT, PPE

The options here are grants, loans, and community shares.  Grants for larger sums are harder to obtain.  Traditionally grant funders like to support innovation, and are less interested in replication of successful projects although some are now rethinking this. So paradoxically if more successful coops are established it may become more difficult to get grants, especially from national funders.  Local authorities will be a key funding partner for many care cooperatives.   Community shares are a valuable way to raise money while also getting more support from your potential customers and their families, and the wider community.  It will help raise your profile and may help future staff and volunteer recruitment.

Specialist Community Business funders

There are several organisations that specialise in supporting community business.  They often offer a mix of limited grant funding and access to loans from specialist social investment funds.  Many also offer development support or mentoring.  As CCCV was able to obtain grant funds we do not have practical experience of this.  However as more care coops are established and the business model is proven, then loan funding may become an option as there will be less risk.   They are definitely worth investigating for advice, and possibly access to start up grants.   Loan finance will be covered in the implementation funding section.      


CCCV was able to get a grant from the local authority for £50,000 over 2 years. This was towards all the costs required to enable us to complete our CQC registration and to get ready to start trading.  The major elements are salary and premises. This came from a grant fund specifically to support the development of new community care provision. Our success in getting the maximum funding available was helped by our relationships with councillors and officers built up over the previous year.

Your local authority should always be considered as a source of investment.  Funding cooperative development is an ‘invest to save’ approach, where financial support now can lead to savings in the adult social care budget in the future.   Even if they do not have a specific grant scheme for these activities, they may still be able to fund you.  It is important that you present it not as an opportunity to solve their problems by developing social care that delivers greater quality at no more ( or less ) then they pay for existing care provision. It is an investment, rather than as a grant , which is often seen as providing short term activities.

If you are not able to secure funding from your local authority then the next options are to look at other funders, raise money from your local community via a share offer or to consider a loan or grant/loan package.  If you are considering loan finance then you should approach a support organisation that can assist you with considering all the implications, and identify the right kind of package for you.


Looking for funding should be seen as an ongoing task until you have been trading for some time and are confident thay you will continue to make a surplus.  The board should get regular financial reports to ensure that you are on track.  While you should expect to cover the costs of providing regulated social care from charges to users some community services are likely to  require a subsidy.   For example the costs of a volunteer coordinator and volunteer expenses.  We are meeting this from our grant from Kirklees Council.