Community Enterprise

Scottish Transition Gathering

19th November 2010
Tom Black
Overview
What is community enterprise?
Why bother?
Some examples
Exercise 1 – is it for us?
Common success factors
Common pitfalls
Exercise 2 - SWOT
Sources of further support & finance
What is community enterprise?
Trading for community benefit
Fusion – meeting social mission AND earning income
Not for private profit, but FOR PROFIT
Carried out by community-led organisations
Self-help ethos - communities themselves are the best
agents of their own renewal
Creating wealth in communities, and keeping it there.
Why bother?
Surpluses can be re-invested in further community
initiatives
Supports the organisation over the long-term by reducing
risk to core operations and building reserves
 Free working capital – no strings attached
 Effort goes into creation of long-term revenue streams not
grants that need to be applied for again … and again
 The cuts!
 In short, moves us towards financial self-sufficiency
necessary for sustained change
Why bother?
• Local empowement and pride – builds a healthy, confident,
‘can do’ culture
• Builds profile, credibility and support - with funders,
partners and your community
 Increased community involvement – e.g. volunteers
 A springboard for further ideas and activities – wider
community renewal!
 Attract further investment
 Increased skills and abilities of community
 In short, builds capacity and changes attitudes
Sector size
500 development trusts in DTA UK membership – 150 in
Scotland
Working in communities that make up a quarter of UK
popn.
Collectively own £0.5bn in assets
Total income over £250m, earned income over £100m
Employ 4,500 staff
Over 17,000 volunteers
Exercise 1 – is it for us?
In groups of 3 or 4 discuss:
Does it square with your organisation’s mission and
ethos?
What enterprise opportunities exists in your
community?
What is the social need (mission)
What is the financial opportunity (market)
Common success factors
A clear value-­led mission and set of priorities developed by
the community
Clear legal model and governance structure
Strong leadership
Constantly developed in­-house  capacity – business skills
Understood the importance of transitions
Strong working relationships with local agencies
knew how to actively engage with their  community –
consensus building
Common success factors
Have an investment strategy, and know this may 
conflict with profit maximisation. NB diversity of p
rojects
Ownership of an important asset
Learn from good practice
Plan ahead
Don’t wait for the right time
Common pitfalls
Feasibility bias
Wrong asset
Wrong skills
Lack of leadership
Didn’t get balance right between mission and market
Grew too fast too soon
Unclear purpose
Didn’t build local support
Legal structures
Use most appropriate structure
Company Limited by Guarantee
Company Limited by Shares
Charitable status
Community Interest Company
Industrial and Provident Society
Bona fide
Community benefit society
Limited Liability Partnership
Exercise 2 - SWOT
Choose an enterprise idea.
In pairs, discuss:
What strengths does your organisation hold in
relation to this?
What are the weaknesses in your organisation? (how
ready are you?)
What are the opportunities?
What are the threats?
Summary
Do you:
Understand what community enterprise is?
Feel there are benefits to this approach for your
community or cause?
Understand the pitfalls and success factors?
Have a community enterprise idea that you want to
take forward in your community?
Know of examples you can visits / research?
Some sources of finance
Big Lottery Fund
Climate Challenge Fund (?)
Esme Fairbairn Foundation
CARES replacement scheme
Loans e.g.
Social Investment Scotland
Triodos Bank
The Co-operative Bank
Community share or bond issue
Other investors, e.g. Empower Community
Sources of further support
 Development Trusts Association Scotland www.dtascot.org.uk
 First Port www.firstport.org.uk
 SENScot www.senscot.net
 Social Enterprise Academy www.theacademy-ssea.org
 Local People Leading www.localpeopleleading.net
 Social Firms Scotland www.socialfirms.org.uk
 Community Energy Scotland www.communityenergyscotland.org.uk
 Community Recycling Network Scotland www.crns.org.uk
 Community Retail Network www.communityretailing.co.uk
 Community Woodlands Association www.communitywoods.org
 Community Transport Association www.ctauk.org
 Scottish League of Credit Unions www.scottishcu.org
 Scottish Association of Farmers Markets
www.scottishfarmersmarkets.co.uk