Sailing to Success Resourcing Community Anchors

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Sailing to SuccessResourcing Community Anchors

• Jeff Scales
• Regional Development Manager North West
• Development Trusts Association

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Previously

• Area Based funding Initiatives (E.g. Single
  Regeneration Budget, Objective 1 2,
  Neighbourhood Renewal Fund, New Deal for
  Communities)
• Grant Funding, core funding, more flexible
  development funding
• More funding for the VCS
• Community development underpinning majority of
  activity

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Now

• End of majority of ABfIs
• Thematic funding (e.g. young people, environment,
  health)
• Economic outputs (e.g. Working Neighbourhoods
  Fund)
• Scarcity of grant funding, development funding,
  core funding, and funding for the VCS
• Competition for grants is extremely high
• Contracting, procurement commissioning
• Trend is for investment (for financial and/or
  social returns)
• Emphasis on enterprise and sustainability
• But remaining emphasis on community empowerment,
  devolution and local decision making (in the
  context of Local Authority activity)

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Recession Has the situation just got worse?

• Potentially less money to be fed into the sector
• Less charitable giving
• Lack of cheap credit and loans and increasing
  reliance on reserves
• Energy costs and costs of supplies remain high
• Deprived communities affected to a higher degree
• Pressure for LAs to make savings
• Reduced income from office rents, room hire,
  training, cafes and bars, consultancy

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But there are opportunities

• Speculate! (e.g. residential no longer profitable
  on every scrap of land increased buyer power)
• Better deals with suppliers (especially
  construction)
• Government spending programmes continue as does
  focus on community!
• Community Anchors address the issues (e.g.
  tackling poverty, unemployment) so increased
  need for their services
• Increase in the pool of volunteers
• Loss of faith in unregulated capitalism is
  there another way?
• Opportunity to rebuild the economy on a firmer
  footing (e.g. triple bottom line accounting,
  community anchors driving regeneration)
• A catalyst for a higher quality and less
  dependency?

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Main Resource Areas for Anchors

• Volunteer input
• Local Fundraising
• Philanthropy
• Small Grants
• Local Authority Partner Support
• Charitable Trusts and Foundations
• Government Grant/Investment Schemes
• Area Based Initiatives
• Income through enterprise (selling services or
  product)
• Commissioning/Procurement/Contracts
• Asset based development management
• Loan/Adventure Capital/Equity Finance
• Shares and Bonds
• Generic and Thematic Resources

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Resources for Anchors of Different Sizes
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Example Balanced Funding Portfolio
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Anchor Resources
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Community Builders Fund - 70m

• 59m from DCLG, 11m from OTS
• Investment fund supporting enterprising community
  organisations
• Orgs that are the backbone of their communities
• Acquiring buildings, running local services,
  supporting sustainability
• 70 capital / 30 revenue
• Government proposal for 70 loans / 30 grants
• Up to 20,000 pre-investment support (194)
  50,000 feasibility planning (131) 750,000
  investment (65)
• Fund manager TBC

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Community Asset Ownership Transfer

• The Quirk Review 2007
• The benefits of community management and
  ownership can outweigh the opportunity cost
• Advancing Assets Programme 2008
• - DCLG sponsored and DTA led
• - 5 Local Authority areas in the Northwest so
  far
• - Community Asset Transfer strategies and pilot
  transfers
• - Further round to be advertised in Nov 2008
• Asset Transfer Unit 2008

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The Asset Development Challenge

• Can be long, difficult and tense
• Must get the business case right
• Shortage of appropriate finance
• Skills gaps
• Poor condition and suitability of assets
• Neglect of core activities and mission drift
• In the case of transfer - potential to shift
  large risks to VCS

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The Opportunities

• Communities with ownership and pride
• And generating circulating wealth
• A catalyst for community activity
• A stronger, less reliant sustainable VCS
• In the case of transfer - Strong third
  community/LA partnerships
• Further info www.dta.org.uk

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Community Asset Transfer (CAT) Loan Account

• Unity Trust Bank (long history of working with
  the social economy sector)
• To turn disused publically owned sites into
  community owned assets
• 100k-6m
• Up to 80 of value of property
• Good rate (Base 1)
• Good term (up to 25 years)
• Flexible (e.g. can be arranged so first 24 months
  cover only interest)
• www.unity.uk.com

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Income generation through sales

• Sales of services or products
• Examples (urban dairy selling cheese, managed
  workspace, community café and catering, community
  transport, consultancy work, community abattoir,
  ferry service, childcare, ICT classes, make
  benches from recycled plastic)
• Achieving balance between social/community and
  enterprise (but fundamentally it needs to be
  viable and sustainable)
• The fifteen experience a balance between
  product and purpose and putting the customer
  first
• Often individual community enterprise activities
  contain a mixture of funding
• Community Anchors who are also charities often
  set up trading arms (only do this if you need
  to!)
• See www.financehub.org.uk (Guide to Trading)
• See www.dta.org.uk (Publications Cultivating
  Enterprise)

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Contracting

• Being commissioned or entering a procurement
  process
• Massive issues for the third sector (e.g. scale
  of contracts, PQQs due diligence, recognising
  social returns and quality, ability to make a
  surplus etc)
• Need to demonstrate that you can deliver quality
• Good way in can be sub-contracting or joining a
  wider consortium (but prepare to be squeezed on
  cost!)
• FutureBuilders (210m) www.futurebuilders-england.
  org.uk
• - To develop third sector delivery of public
  services
• - Recently expanded to cover any public service
• - Investment of 50k
• - Mix of loan, grant and professional support
• - Possibility of 10k development grant

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Working Neighbourhoods Fund

• Measures to tackle worklessness in the most
  deprived areas (linked to IMD and population
  size)
• Held by LAs and linked to LAAs
• Fund advocates innovation, flexibility and local
  solutions
• E.g. employment pools in deprived areas
  community enterprises training for young people
  business incubators peer mentoring
• Commissioning rather than grant funding

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Working Neighbourhoods Fund Allocations
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The Working Neighbourhoods Fund Guidance (Nov
2008)

• We need to tailor our approaches to local
  communities, taking account of local issues This
  means giving local people a direct stake in how
  we tackle worklessness
• It is a new approach, a bold approach, and a
  community driven approach
• Targeting areas of high worklessness by
  devolving and empowering communities

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Hazel Blears on the Working Neighbourhoods Fund

• We have been concerned WNF is a traditional
  model and the point is to be more innovative.
  Its targeted at people who have never worked so
  our usual solutions will not be effective for
  them and the challenge is to do something
  different
• DTA National Conference (16th Sept 2008)

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Loan/investment finance

• The Social Enterprise Loan Fund (TSELF)
  www.tself.org.uk
• - Replaces Local Investment Fund (LIF/NW
  Community Loan Fund - 7m of loans to 150 orgs in
  past 14 years)
• - Aims to double its loan portfolio over 3 years
• Triodos Opportunites Fund www.triodos.co.uk
• - Social Venture Capital (200-750k to support
  growth)
• - Loan Finance, organisational support and
  networking
• Adventure Capital Fund www.adventurecapitalfund.or
  g.uk
• - Currently reviewing its investment policy
  (Main Investment Fund and Managed Workspace Fund
  on hold)
• - Business Development Fund (grant of up to
  15k) is about reopen
• Charity Bank www.charitybank.org
• - Bridging loans, working capital loans, loans
  for building refurb or purchase
• Office of the 3rd Sector Risk Capital Fund (20m)
• - probably to begin investing in next financial
  year
• Unity Trust Bank and Venturesome

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Community Shares and Bonds

• A community share issue
• - Community members purchase shares
• - Financial dividends are paid if the enterprise
  is profitable
• - Social impacts are measured and reported to
  shareholders.
• - Shares could be withdrawable, subject to
  conditions
• A community bond issue
• - Mechanism to raise long term loans on similar
  terms from members of the community, with a
  commitment to repay after a number of years
• Further info www.dta.org.uk (publications)

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Charitable Trusts and Grant

• Big Lottery Fund Awards for All (up to 10k)
  and Reaching Communities (10k-500k but only up
  to 50k for capital)
• Esme Fairburn Foundation
• Tudor Trust
• Lankelly Chase Foundation
• Plunkett Foundation
• Coalfields Regeneration Trust
• Co-operative Community Fund www.co-operative.coop
  
• Trusts attached to banks (e.g. Lloyds)
• Entrust (recycling Landfill Tax Credits links
  to Wren, Biffaward etc)
• Local Community Foundations

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Grassroots Grants

• 130m OTS fund nationally led by Community
  Development Foundation (CDF www.cdf.org.uk)
• To offset end of SRB, NRF etc
• Aimed at local community groups (i.e. less than
  20k turnover)
• Grants of 250-5,000
• - 80 million small grants fund
• - 50 million endowments programme to enable
  local funders to generate additional donations on
  a matched basis (building capacity to provide
  long-term funding for frontline community
  organisations)

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Discussion

• What do you think anchors need to do to survive
  in todays resource environment?
• What are the difficulties for new anchors and
  where could resources come from to support them?
• Whats the resource gap and what sort of
  resources are best to support the development of
  Community Anchors?
• In discussing the above try and reflect the
  different shapes and sizes of Community Anchors
• 3 key points to feed back

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On the Horizon?
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Conservatives A stronger society, voluntary
action in the 21st Century

• A Voluntary Action Lottery Fund (replacing BLF)
• A network of social enterprise zones in deprived
  communities
• Allow Third Sector Organisations delivering
  public services to earn a competitive return
• Office for Civil Society with a transformation
  plan to replace Office of the Third Sector

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Jeffs tips on resourcing Anchors

• Diversifying income streams to spread risk
  (combinations of grant, contract, income
  generation, loan finance)
• Be aware whats making you money and what you are
  subsidising (decent financial management is
  essential)
• Dont be afraid to do something purely commercial
  in order to subsidise other activities (see the
  big picture)
• Cash cows help with cash flow and give you much
  needed unrestricted funding
• Develop assets and avoid liabilities

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Jeffs tips on resourcing Anchors

• Go for full cost recovery whenever possible
• If going for grant funding properly go for it!
• A business plan for your organisation is very,
  very useful
• Being small and voluntary isnt a bad thing and
  keeps risks low - But being large diverse can
  help spread your risks!?!
• Try to avoid saying we need money say invest
  in us and this is what we can do for you

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Contact
Jeff Scales Regional Development Manager
(Northwest) t 01254 889925m 07912
269668 e  j.scales_at_dta.org.uk Website
www.dta.org.uk
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Thematic Anchor Resources
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What community anchors do!

• Provide childcare, make benches, manage office
  space, teach ICT, support small businesses, cook
  healthy food, run cafés, recycle paper, support
  other community organisations, employ people with
  special needs, grow stuff, manage community
  centres, run cinemas, rent out houses, undertake
  youth work, provide home help schemes for older
  people, run community transport schemes, lobby
  Councils for improvements on behalf of local
  people, undertake consultancy work, run schools
  for excluded young people, manage parks and play
  areas, have festivals fun days Dickensian
  Christmas Fairs, run credit unions, support
  neighbourhood management and other local
  initiatives, refurbish derelict buildings, set up
  social enterprises, support people to find work,
  homework clubs, DJ Workshops, five a side
  football, manage Healthy Living Centres, support
  local artists, provide wedding and conference
  facilities, create web-sites, regenerate market
  town centres, teaching basic skills English and
  Math, lend money, employ local people, repairing
  and selling bicycles, running play schemes,
  sports days, manage sports facilities, provide a
  refuge for women, publish community newsletters,
  teach construction and catering skills, support
  community radio, run community arts projects,
  manage renewable energy schemes, build green
  homes, manage grant funding, managing local
  markets (market stalls), run community cohesion
  projects, manage street ranger schemes, install
  CCTV, manage shops, benefit advice and debt
  counselling, promote tourism, manage heritage
  sites, undertake social audits, run pubs and
  bars, building and managing a BMX track, run
  Archaeology schools, provide sets for film and
  television productions, manage allotments, run
  Tourist Information Centres, run Abattoirs,
  provide ferry services

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ESF - Community Grants in the NW

• Up to 12k for 3rd Sector Groups
• Supporting people in deprived communities into
  the labour market
• Initial help with basic skills, taster work
  experience including volunteering, training
  advice, job search, equipment, confidence
  building etc
• Cheshire Learning Together Cheshire
  Warrington
• Cumbria Cumbria Community Foundation Cumbria
  CVS
• Gtr Manchester GMCVO (The Towpath Fund)
• Lancs Lancashire County Developments
• Merseyside Community Foundation for Merseyside
• www.nwnetwork.org.uk       
• info_at_nwnetwork.org.uk
• Tel [phone]

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Myplace (190m)

• DCSF and Big Lottery administered
• For world class youth facilities
• Grants between 1m and 5m
• Need to deliver on 4 outcomes
• - Attractive and safe places
• - Increased participation by young people
  (especially in disadvantaged areas)
• - Increased access to information, advice and
  support
• - strong partnership working between LAs and
  their third sector/private sector partners
• Third sector led projects will get 50k revenue
• grant

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Young Peoples Fund 2 (38m)

• Between 30k 500k
• Has to meet Every Child Matters outcomes
• - being healthy, staying safe, enjoying and
  achieving in life, making a positive
  contribution, improving economic well-being
• Has to be young people led (support and advice
  available to help organisations achieve
  participation)
• Majority for services and activities
• But grants up to 50k to develop sites and
  buildings (for capital projects worth up to
  200k)
• See www.biglotteryfund.org.uk

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Changing Spaces

• Big Lottery Fund
• Local Food Programme (50m ranges 2k-500k)
• Community Spaces Programme (50m 10k-450k)
• Access to Nature Programme (25m 50k-500k)
• Ecominds Programme (7.5m up to 250k)

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Community Land Trusts

• Aimed at addressing affordability of housing
• Secure land and buildings through community
  ownership and retaining an ownership stake
• Houses sold or rented to those in need
• Recent Statutory Definition of CLTs
• Community Land Trust Fund (2m)
• - Esme Fairburn, Tudor Trust, Venturesome
• - Aiming for 30 operational CLTs with 150 homes
  in 4 years
• - 3 funding streams (Feasibility Fund 1 day
  consultancy, Technical Assistance Fund 2500,
  Investment Fund loan only Pre-development
  Fund, Development Finance)

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Department of Health Social Enterprise Investment
Fund

• To stimulate and encourage the start up and
  development of a vibrant social enterprises in
  the health and social care sector
• 27m on top of the 73m secured in 2007

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Unclaimed Assets Fund

• Estimated 500m left in dormant bank accounts
• Labour Partys 2005 manifesto to channel
  unclaimed financial assets back into the
  community
• Bill in progress
• Legislation would provide the legal and
  administrative framework for distributing assets
  from dormant cash accounts
• Utilising 15 yr dormant bank accounts
• Investment in disadvantaged communities, youth
  facilities, financial inclusion and possibly a
  social investment bank (likely Big Lottery
  managed)
• Legislation will not be compulsory (banks to
  participate voluntarily but will they?)