Generating and spending revenue
The most successful community-run facilities or enterprises will be able to generate enough income to fund the maintenance of the building or space they are managing. If they are managing sufficient income-generating activities, organisations may choose to reinvest these to support other activities or services for local people. Managing the revenue stream and deciding how to spend it are key issues for consideration.
Many existing community-run initiatives are dependant on grant funding to survive. This does not offer long-term stability and if it is withdrawn can lead to the closure of the facility or the services offered. Assets in community ownership that are able to generate revenue offer greater long-term security for the community. It is essential that through the appropriate governance and accountability arrangements local people have choices about how the resources generated are spent.
Potential forms of revenue generation are:
Revenue from buildings or places
Buildings or public spaces can be rented out to other organisations for a fee, either on a semi-permanent basis or for particular events.
Revenue from delivering public services
Such as nursery and childcare services, or support services for elderly residents.
Assets as collateral
Assets can be used as collateral to access further borrowing from banks or other institutions.
Community enterprises
Social enterprises
business can be run from buildings which can generate income on a not-for-profit basis.
Endowments
Endowments can be granted to a community organisation in the form of cash, which can then be invested to provide continuing financial returns. This may form part of a section 106 agreement in a new development.
Further Reading
Making assets work: The Quirk Review (2007)
Making Community Leadership Real
Managing risks in Asset Transfer, DTA (2008)