A guide to third sector trading - WCVA

It’s an idea, but is it business? A guide to third sector trading
1: Getting
started
2: First steps 3: Business
planning
4: Legal and
governance
5: Funding
and
resourcing
6: Financial
controls
7: Managing
growth
8: Management
and
governance
9: Social
enterprise
10: Sources
of support
• The surpluses generated by the community organisation remain
in the community and can support innovative projects and
provide community facilities and development support
• The buildings that are taken over will sometimes occupy iconic
status. Restoring them to productive uses which address local
needs can give a significant psychological boost and new hope
to local communities.
Tough challenges: There are many examples of enterprises which
have realised this optimistic vision. But in practice, achieving
all these benefits in the real world is inevitably neither easy nor
guaranteed.
• Owning assets outright or taking a long term lease both involve
organisations taking on significant levels of responsibility,
persuading the owners of the buildings they have the necessary
skills, striking an advantageous deal, and developing business
uses and management arrangements to realise the benefits.
• Choosing the form of asset transfer which is best for the
community organisation or charity can be confusing (see
below).
• Since not all asset transfers to the third sector are successful, the
sceptics now also have the evidence of failures to justify making
the acquisition process challenging if they choose to.
• At the same time, spending cuts will inevitably lead to a greater
enthusiasm in local authorities for the transfer of loss-making
community buildings/facilities to small organisations who may
have even less capacity to make them sustainable.
• If local groups are expected to take responsibility for repairs
without grant support, they will need to be extremely confident
of raising the income they are likely to need. They will be left to
take the blame if the facilities are eventually closed.
Asset transfer options
How assets can be transferred: There is a bewildering array
of options for community organisations starting to explore
possibilities for owning and using property, many of which do
not involve outright ownership. They may well find themselves in
negotiation or even in conflict with their local authority over the
most appropriate form of transfer for them. Table 7.1 objectively
analyses the respective advantages and disadvantages of each
option. (You need to read it with an open mind. Don’t forget that
councils are usually happier with a position which gives more
residual authority to them and less control to the enterprise. So
something which may seem to be a disadvantage to you, may
be seen as an advantage by a sceptical authority, and so improve
your chances of a successful transfer.)
181