Finance and business models for community asset ownership - PowerPoint PPT Presentation

Loading...

PPT – Finance and business models for community asset ownership PowerPoint presentation | free to download - id: 4bb16a-MzVkZ



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Finance and business models for community asset ownership

Description:

Finance and business models for community asset ownership #communityassests * * * * * * * * * * * * * * * * * * * * * * * * * * Outline who we are and what we do ... – PowerPoint PPT presentation

Number of Views:75
Avg rating:3.0/5.0
Slides: 85
Provided by: joannap3
Learn more at: http://www.jrf.org.uk
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Finance and business models for community asset ownership


1
Finance and business models for community
asset ownership
communityassests
2
An overview of the social investment journey
Hugh Rolo Director of Innovation Locality
3
My experience
  • www.thekeyfund.co.uk
  • www.adventurecapitalfund.org.uk
  • www.communityshares.org.uk

4
Stages of Growth
Typically medium sized (5-10 staff), reputation
for quality, opportunities for expansion Needs
financial review, peer learning, seed-corn
finance, loan/social finance advice
Pre-Pre Start Pre-Start Start
Up Early Growth
Consolidation Crisis /
High Growth

Typically an emerging group of shadow trustees
with one or two key players Needs Visioning,
business planning, constitution, start up capital
sourced, policies and procedures
Typically very small staff team, may be grant
dependent and dealing with short-term
issues Needs small grants, ideas, networking,
reassurance, business plan review/reworking,
mediation re teething troubles (governance/HR)
Typically small staff team (3-5), established
single business model, looking to expand and/or
diversify Needs financial review, peer learning,
seed-corn finance, loan/social finance advice
Typically Income streams dried up/not replaced,
CEO in denial, Board unaware Needs financial
review, emergency finance, HR support, tough love
Typically Trading on reputation, rapid
diversifying danger of overstretch Needs
Strategic review, financial analysis, critical
friend
5
Matching financial mechanisms to funding needs
HIGH CHANCE OF REPAYMENT
Secured loan
Standby Facility
Overdraft
Unsecured Loan
LOW RISK
HIGH RISK
Pre-funding Capital Fundraising
Hard Development Capital
Working Capital (open)
Soft Development Capital
Working Capital (closed)
Patient Capital
Quasi-equity
Equity
LOW CHANCE OF REPAYMENT
INCREASING SUPPLY LITTLE
SUPPLY
Grant
6
Social Finance Timeline
7
www.cdfa.org.uk
  • CDFIs lent a record 200m, up 77 in 2009/10.
    The value of CDFI loan applications rose to 437m
    (from 360m previously) The CDFI loan portfolio
    stood at 531m as of March 2010 CDFIs helped
    their customers leverage an additional 100m from
    other mainstream sources Earned income
    accounted for 40 of all income reported, up 14
    from the previous period.

8
Social Investment Business
  • Communitybuilders Fund
  • The Communitybuilders Fund, previously owned by
    the Department of Community and Local Government
    is now an endowed fund, owned and administered by
    the Adventure Capital Fund. It supports
    neighbourhood-based, community-led organisations
    to become more sustainable through a mixture of
    loans, grants and business support.
  • The fund is currently closed to new applications
    but we expect to be able to reopen within a few
    months.
  • Social Enterprise Investment Fund
  • We manage the Social Enterprise Investment Fund
    (SEIF) with Local Partnerships, on behalf of the
    Department of Health. SEIF is a fund that
    provides loans, grants and professional support
    to social enterprises involved in the delivery of
    health and social care services. 
  • The Adventure Capital Fund (ACF)
  • The Adventure Capital Fund is an ambitious style
    of funder for community enterprise. The
    pioneering packages that we offer have the
    potential to transform neighbourhoods across the
    country.
  • Futurebuilders England Fund
  • We manage the Futurebuilders England Fund on
    behalf of the Office for Civil Society. This fund
    is a 215 million Fund that provides loan
    financing, often combined with grants and
    professional support, to third sector
    organisations in England that need investment to
    help them bid for, win and deliver public service
    contracts. The Futurebuilders England Fund is now
    currently closed for new applications.

9
Changing public attitudes
  • Most people are savers not investors, (and some
    people arent even savers)
  • Most people donate to good causes, rather than
    invest in them
  • But most people can invest more than they can
    afford to donate!
  • Shift from purely philanthropic to community
    investment proposition

10
Growth in community share offers
11
Social Impact Bonds
12
Current Ideas
  • Growing the Social Investment Market OCS
  • 3 Nesta papers
  • Twenty Catalytic Investments to grow the Social
    Investment Market
  • Investing for the Good of Society
  • Understanding the Demand and Supply of Social
    Finance

13
Looking Forward
  • New regulatory environment FS Regulation Bill
    /Vickers Independent Commission on Banking
  • CRA /Robin Hood tax??
  • Aligning Pension Funds
  • Preventative Investment
  • SVIs
  • Crowdfunding
  • Demand push/supply glut new usage.

14
Big Society Bank/CDFA RGF
  • 60mn of unclaimed assets
  • 200mn pledged from Commercial Banks
  • (on commercial terms)
  • Will be a wholesaler investing through CDFIs
  • More to come up to 400mn plus new unclaimed
    assets 20-40mn per year
  • CDFA RGF 60mn

15
contact
  • www.locality.org.uk
  • h.rolo_at_locality.org.uk
  • www.communityshares.org.uk
  • LOCALITY CONFERENCE
  • in Manchester
  • November 1st and 2nd 2011

16
Finance and business models for community
asset ownership
communityassests
17
www.hebdenbridgetownhall.org.uk
  • Asset transfer and development funding the
    Hebden Bridge experience

18
(No Transcript)
19
(No Transcript)
20
(No Transcript)
21
(No Transcript)
22
(No Transcript)
23
The slow decline
  • Loss of births/deaths registry
  • Loss of housing office
  • Council staff no longer customer-facing
  • Closure of cash desk
  • What role for the Town Hall in the 21st C?

24
Community engagement
  • 2004 Sale of HB adult ed building/toddler pool
  • 2006 Town Hall Working party established in
    community
  • 2007 Quirk report Making Assets Work
  • 2007 Community Assets programme
  • 2008 Establishment of HBCA, as charitable trust
  • 2009 Launch of Friends of the Town Hall
  • Summer 2009 Asset transfer submission
  • Dec 2009 Asset transfer agreed
  • April 2010 Asset transfer takes place

25
A new form of public ownership
  • Hebden Bridge Community Association will
    maintain Hebden Bridge Town Hall in public
    ownership in perpetuity, as a centre of community
    and civic life

26
A new form of public ownership
  • Our concept of public ownership looks back to
    the earlier nineteenth century models of
    mutuality and common interest, as well as forward
    towards new 21st century models
  • Draft Community Participation and Inclusion
    Strategy, 2008

27
A new form of public ownership
  • Hebden Bridge Community Association will operate
    on the basis that it is demonstrably democratic
    and accountable
  • Launch of the Friends scheme
  • About 550 Friends/members at present

28
(No Transcript)
29
A new form of public ownership
  • Legal structure
  • Company limited by guarantee
  • Registered charity
  • Trustees/directors elected by members
  • Also considered
  • IPS Community benefit society
  • CIC

30
The asset transfer
  • The arrangement with the council
  • 40 year leasehold ownership (now 125 years)
  • Calderdale as anchor tenant
  • Principle of no net gain or loss to council
  • No on-going grant funding

31
The asset transfer
  • The desire to see the building used to its
    fullest extend for community and civic purposes
  • Immediate changes from recycling to
    replastering
  • Creation of new meanwhile hall
  • Weddings/civil partnerships licence
  • Increasing use of meeting rooms
  • Sorting out the dry rot!

32
The capital build
  • We are determined to ensure that the future of
    Hebden Bridge Town Hall is secured for the very
    long term
  • Working for long-term sustainability
  • Move away from dependency on anchor tenant
  • Make building DDA compliant
  • Provide much greater range of community
    facilities
  • Provide small enterprise facilities required

33
The capital build
  • 10 year business plan - 3.5m capital build
  • Architects appointed summer 2009
  • 2m investment from Communitybuilders fund agreed
    (1.25m loan, 0.75m grant) Sep 10
  • 1.2m ERDF grant agreed Mar 11
  • Planning permission granted Oct 2010
  • Builders on site April 2011
  • Completion due April 2012

34
(No Transcript)
35
(No Transcript)
36
The capital build
  • Business plan development and funding bids
    undertaken by Board of Trustees
  • (Small) paid consultancies market research,
    business plan refinement
  • Professional consultants, including disability
    consultant, ecologists etc
  • Project Manager
  • Centre Director to be appointed late 2011

37
The capital build
  • Feasibility funding essential
  • c 5000 to get started (town and parish councils)
  • c 25K to reach RIBA Stage B (ACF, local trust)
  • c 85K to reach planning (CB, ERDF Access)
  • Substantive funding
  • Problems of coordinating two funding bids
  • Late variations/conditions create difficulties
  • Loans interest/repayment holidays essential

38
The business model
  • HB Creative Quarter 34 enterprise units
  • Business associates
  • Business conferences and seminars
  • Community events and meetings
  • Catering concession
  • Existing tenants

39
The challenges
  • Attracting business/sales
  • Running an efficient operation
  • Meeting funders criteria
  • Meeting other responsibilities
  • Servicing the 1.25m borrowing

40
Should communities really have to do this?
  • Employing staff (including TUPE transfer)
  • VAT accounting
  • Health and safety
  • Charitable legislation
  • Company law
  • Licences etc for public buildings
  • Building maintenance capital works
  • Cash flow money in the bank when its needed

41
Can communities really do this?
  • Is it appropriate to deliver public services in
    this way?
  • Is volunteer effort acceptable?
  • Are the skills there within the community?
  • Will volunteers suffer burn-out?
  • Are the volunteers really accountable to their
    community?

42
Can communities really do this?
  • Does this undermine local democracy?
  • Does this replace work which should be paid?
  • Does this open the door to eventual privatisation
    of the public realm?
  • Does encouraging a more business-like approach by
    community groups bring inappropriate areas of
    life into the marketplace?

43
Moving forward
  • Other public buildings potentially at risk
  • Look to communitys own financial resources
  • Work on our democracy
  • Offer something back for others

44
Where to find out more
45
www.hebdenbridgetownhall.org.uk
  • Asset transfer and development funding the
    Hebden Bridge experience

46
Finance and business models for community
asset ownership
communityassests
47
Investment readiness and the social investment
journey
  • Joseph Rowntree Foundation
  • Seminar
  • 4th May 2011
  • Tony Curtis
  • Business Support
  • Advisor

48
The Social Investment Business
  • a social enterprise wholly owned by a charity
    (Adventure Capital Fund)
  • a large scale UK social investor
  • manages nearly 400m of investment
  • works to help civil society organisations do more
    of what they do best supporting people and
    communities most in need
  • aims to transform the civil society sector by
    helping to create powerful, well capitalised and
    thriving organisations

49
(No Transcript)
50
Our Services to Civil Society Organisations
  • loans / grants to third sector providers
  • business support / consultancy to third sector
    providers including consortia social
    enterprises
  • services to national and local commissioners
  • interim management
  • training mentoring
  • sharing ideas and approaches

51
(No Transcript)
52
Scope of investment readiness criteria
  • governance
  • financial capability (including forecasting)
  • management capability
  • clarity on market opportunity
  • clarity of business model (clear routes to
    success)
  • establishing a clear commercial market focus
  • developing and demonstrating track record
    including relevant accreditations
  • human resources management
  • the adequacy of key processes including business
    planning
  • relationships with partners, customers, funders

53
(No Transcript)
54
Assessing investment readiness
  • The applicant must
  • present a cash flow forecast with well argued
    rationale re income forecasts
  • demonstrate business / enterprise mindset
  • have up to date and controlled finances
  • have buy-in from its Board and supporting
    governing documents
  • have the financial capability to track a loan
  • have identified risks reasonably

55
(No Transcript)
56
The real reasons that organisations dont get
offered grants, loans, commissions
  • standards have gone up and few reach the
    standards set by the funders because
  • the board / management committee is weak
  • the organisation is not managing its resources
    well and cannot prepare financial forecasts
  • there is no clear plan as to where future income
    is going to come from
  • the proposal is badly presented on paper with a
    poor business plan and lacking adequate financial
    projections

57
(No Transcript)
58
What the best organisations are doing
  • achieving investment readiness
  • diversifying income streams
  • securing accreditations and quality marks
  • getting balance right business like but
    mission driven
  • refreshing, reviewing, upgrading and upskilling
    the board
  • articulating clearly why they are still here and
    still needed

59
(No Transcript)
60
Common problems and issues (1)
  • third sector / civil society organisations are at
    risk of being as siloed as public sector
    (hampering new business development)
  • public facing image out-of-date and not pitched
    at securing new opportunities
  • organisation is timed out (overlaps,
    duplication)
  • organisation has lost sympathy during recession

61
Common problems and issues (2)
  • approach not on message with government agenda
  • falling down gap funders withdrawing and
    public not engaged with the mission
  • indistinguishable from public sector
  • no contingency plans
  • unclear how to restructure / reduce costs /
    downsize
  • private sector taking over contracts for work

62
(No Transcript)
63
Contact details-
  • www.thesocialinvestmentbusiness.org
  • enquiries_at_thesocialinvestmentbusiness.org
  • Tel 0191 261 5200

64
Finance and business models for community
asset ownership
communityassests
65
shine
raising aspirations, creating opportunities
66
Risks, Challenges, Success Factors Community
Enterprise What it Means To Take on Debt
?
67
Shine
Public Services
Social Business
Vol/Comm
68
Atlanta
69
60
70
2005
71
Social Enterprise
72
People, not spreadsheets, make things happen
73
2007/8
74
50,000
75
50K - KeyFund Loan 350K - Venturesome
Loan 1.4m - LEGI Grant 700k - ERDF Grant 1.6m
- Santander Loan 350k - Charity Bank Loan
76
Construction / Renovation
77
(No Transcript)
78
(No Transcript)
79
Full Team
Partial Resource
AutoPilot
80
balAnce
81
focus market, cash
82
people
83
next?
84
Finance and business models for community
asset ownership
communityassests
About PowerShow.com