Community Assets: The benefits and costs of community management and ownership – Executive Summary
Community-based organisations, when they take control of the buildings they occupy, embark upon a journey that can produce significant positive outcomes for themselves, the communities they serve and a wide range of other stakeholders.
Community-based organisations are independent, locally based and comprise the majority of the estimated 500,000 nonprofit organisations in the UK. They range in number, scale and sophistication from the multiplicity of small, single-purpose groups run by volunteers through to the groundbreaking, wealth-creating, multipurpose organisations that provide an important anchor role for the communities they serve. Community-based organisations are active in every location from the smallest rural community through to the densest inner-city neighbourhood. They are embedded within well-to-do communities as well as in run-down, local authority estates. Working with marginalised communities and in disadvantaged neighbourhoods, community-based organisations have pioneered new forms of engagement and provide an important alternative bottom-up, self-help approach that complements the interventions of most external agencies.
Although the vitality of community-based organisations impacts upon the well-being of society as a whole, virtually all are organisationally and financially fragile and reliant on over-stretched staff, volunteers and uncertain funding. Their prospects have deteriorated in recent years as a consequence of changes that have taken place in the funding and structure of the non-profit sector. Community and multi-purpose organisations have responded by exploring a wide range of approaches to strengthen their organisational and financial resilience. These include greater professionalisation, the replacement of grant with earned income and through the formation of surplus generating enterprises.
As a consequence leading community-based organisations have established complex interdependent structures that underpin their community and wealth creating activities with surpluses generated through workspace developments and community enterprises. The search for organisational and financial sustainability is inextricably linked with the ability of community and multi-purpose organisations to take control over the buildings they occupy. There are two avenues that offer the best prospect of significant progress: the transfer of existing community buildings and the acquisition of redundant buildings.
There are an estimated 18,000 community buildings, such as community centres and village halls, across England and Wales. These offer opportunities for smaller multipurpose organisations. Taking over the longterm responsibility for these buildings is a major turning point for the organisation that is transferring the building as well as the organisation receiving it. Both need to be confident that the ‘new’ owners have the capacity and resources to take on what can be a significant challenge. The list of redundant buildings includes primary and secondary schools, shops, offices, warehouses, factories, pubs, town halls, churches, elderly people’s accommodation and many others. These buildings can be owned by public, private or voluntary sector bodies and some have an iconic status in their communities. They are present and sometimes in significant numbers in almost every neighbourhood: many are large. They, therefore, offer the greatest potential for larger multi-purpose organisations.
Taking over the management of these redundant buildings offers benefits to both the occupying organisation and the owner. The problems tend to emerge at the acquisition stage as owners and purchasers can take a different approach to valuation. Although the consent to allow local authorities to dispose of assets at less than ‘best consideration’ is a positive advance, it only applies to local authorities.
Occupying existing buildings offers community-based organisations the opportunity of learning by doing and adopting an incremental approach to growth and change. It also allows staff and management committees to increase and deepen their skill sets at their own speed.
New build developments play an important role in the regeneration of neighbourhoods and can be a major statement of measurable progress. However, they have to be envisaged and funded in their entirety at the outset. It is not surprising that most new build schemes have been underpinned by mainstream programmes.
The benefits to community-based organisations arising from taking control of the buildings they occupy are many. Taking responsibility for the management of their space provides these organisations with a secure base. They are able to make better utilisation of the space and increase their income streams. They have the opportunity to plan ahead and expand and diversify their activities. They are also able to experiment with new approaches to meeting the needs of their communities. Taking over a long leasehold interest in their building gives them additional status and responsibilities. It allows them to raise the funds that are often required to undertake the refurbishment and reconfiguration necessary. Taking over the ownership of the building brings to the ‘new’ owners the authority that ownership bestows. It strengthens the balance sheet, provides the collateral for working capital loans and enables them to raise a mortgage and other finance to support further growth.
The benefits for the communities with which they work are also considerable. Bringing back into active use an underused or redundant building can have a major psychological impact. New build projects can have a similar effect. With the confirmation of their locus within the community, community-based organisations are able to develop strong, long-term and trusting relationships with local people. Families and individuals can benefit from the wider range of activities that take place and opportunities that are on offer. Community groups have an accessible place to meet.
Owners also benefit. They can see underused or redundant buildings become hives of local activity and take on new purpose. The ability of the ‘new’ owners to attract additional resources and create value can help to halt the process of decline. This, in turn, can create an environment that is attractive to other investors.
The existence of strong sustainable community-based anchor organisations offers significant benefits to public sector service providers. These agencies have the knowledge that there are organisations working locally that can tap into resources and networks that are not open to them. The activities that these organisations undertake can forestall the call on their services, complement those that they deliver and provide early warning signs of changing needs. The space that community-based organisations provide can also allow these providers the opportunity to deliver responsive and integrated services locally.
However, supporting community-based organisations to take greater control over the buildings they occupy is neither a cost free or risk free initiative. Until there is an understanding of the scale and pattern of under-funding of community-based organisations, it will not be possible to establish whether the response is appropriate.
The ownership of good quality accommodation is not, as many settlements have found, a guarantee for sustainability. It will be necessary to adapt and improve buildings if they are to meet changing needs and standards. It will also remain difficult to cover an organisation’s core operating costs. Several organisations have, therefore, sought to develop surplus generating activities. This requires a profound change in culture on the part of the sponsoring organisation. In addition, funding for these quasi-commercial ventures is more difficult to assemble and often entails raising loan finance. This can expose the organisation to greater uncertainty.
Community-based organisations that embark upon this long and stressful journey are taking on formidable responsibilities and expectations. Their endeavours need to be supported by a similar level of cross sector, cross party commitment.
Unless adequate funding is in place activity levels will remain low and slow. In addition to capital funding streams to allow transfers of ownership and subsequent construction work to proceed, funding also has to be in place to support organisational development, pre-construction feasibility studies and the training of staff and committee members.
In addition, organisations representing community-based organisations and major funders need to establish a robust risk management framework, in order to ensure that projects, funders, organisations and the communities they serve are not unnecessarily exposed if projects or organisations get into difficulties.
If these caveats are addressed, there is real potential to give substance to the important contribution that community-based organisations make to civil society in general and the future of disadvantaged neighbourhoods and communities in particular.
Download the complete report from http://civilrenewal.communities.gov.uk/civil/reports-publications/publications/264562/Community_Assets_Report.pdf?view=Binary (692 KB)