By Penny McLean and May Macnair
Steve Wyler has been Director of the Development Trusts Association since 2000. The Development Trusts Association is a fast growing UK-wide movement, bringing together over 450 community-led organisations, which use self-help, social enterprise, and community asset ownership to bring about long-term social, economic and environmental renewal, and transform their communities for good. The DTA – in common with many of its members – generates over half its income from trading activities, and the rest from governmental and independent grant-makers
Over the last twenty years Steve has worked for voluntary and community agencies and funders. For example in the 1990s, working with homeless agencies, he ran a Homeless Network, co-ordinated the Rough Sleepers Initiative in London, and set up Off the Streets and into Work.
Recently Steve has been a member of various government advisory groups on social enterprise, community assets, and the third sector. Steve is vice-Chair of the Social Enterprise Coalition, Board member of the Adventure Capital Fund, and Board member of the Glass House Community Led Design.
Q: What is a development trust?
Development trusts are community owned and led. They use self-help, trading for social purpose and ownership of buildings and land, to bring about long-term social, economic and environmental benefits to transform their community for good.
Q: Where did the concept of the Development Trusts Association (DTA) originate, and how many currently operate across the UK?
15 years ago, a group of about 12 community activists from around the UK made contact with each other, and decided to develop a better way of making an impact within their communities. What made them distinct from other community groups/enterprises was their entrepreneurial streak; ploughing profits back into their local communities and social aims. They involved community groups, ownership of land and buildings, and local businesses – creating what we call a development trust. Since then, the number of development trusts across the UK has grown to 450.
The size of each development trust varies hugely; some trusts are voluntarily run and have few assets while most are more established and have paid staff.
Q: Can you explain the difference between a social enterprise and a development trust?
A social enterprise is a business with primarily social objectives whose profit is reinvested into its social aim, rather than being driven by the need to maximise profit for shareholders and owners. Well-known examples include the Eden Project, Café Direct, Coin Street Community Builders. The social enterprise sector is extremely diverse, encompassing co-operatives, development trusts, community enterprises, housing associations, football supporter’s trusts, and so on.
Development trusts are organisations which are set up to run and deliver an inclusive mix of services or facilities which respond to the needs of a community. For example one of our members, Tiger 11 in West Yorkshire, acquired and refurbished a former primary school, a Victorian Grade II listed building, for business and community use. Development trusts are about sustainable change. As independent organisations they avoid over-reliance on a single funder, and also aim to reduce dependence on grant-aid in the long term. To do so, they may create an income-earning asset base, and build up trading operations or contract income – this would be a social enterprise model.
We see development trusts as part of a community enterprise movement where organisations trade for a social purpose, within a defined community of place. Development Trusts are a model of community enterprise joining up the delivery of a range of local services to a wide ranging community.
Q: Many refugee community organisations (RCOs) haven’t heard of development trusts, can you explain how RCOs can find out about them, and how they would go about setting one up with support from the DTA?
Firstly I’d like to clarify that most development trusts are not grant funding organisations, as I don’t want to give misleading information. They can however support RCOs by providing business advice on setting up a social enterprise, which may lead to a development trust. And how can RCOs find out about development trusts? – by getting in touch with us and visiting our website where they can search for a development trust in their area.
Q: If a small RCO that runs an allotment project wants to turn it into a development trust, what support would be available?
R: This would be an example of a community enterprise, which the DTA would also be interested in supporting. The DTA could offer support through offering membership, which helps connect groups through information, events, and the Community Alliance Knowledge and Skills Exchange Programme. This is a peer learning programme where DTA members can receive money to visit other projects to look at best practice; host a visit for a number of organisations, or to arrange a training day for a number of organisations. The DTA is particularly interested in small groups wanting to work collectively.
Q: If an African RCO converts an old building into a useable project space, and wants to develop this into social enterprise. What advice would you give them?
R: This group is a community enterprise, and could grow to be a development trust. Often development trusts start as a small organisation, and flourish into something big. However, in order to set up a development trust, they would have to develop and do similar work with other communities, not just the African community. The best way to build links with other community groups is through networking, and getting to know what other similar organisations are doing which could fit well with your social aims.
Q: So, with the example of the African RCO, what sort of legal structure do you think would be most suitable for them to thrive?
R: The structure of a company limited by guarantee, and a charity, works well for small organisations. A Community Interest Company (CIC) is an option, but you don’t get tax breaks. Another model is an Industrial and Provident Society (IPS), which is the old co-op model. Through all these models it is possible to raise loan finance; organisations wanting to raise money through community shares often use the IPS structure.
Q: Can you explain in simple terms what community shares and bonds are?
R: First of all, a project has to be financially viable to do this. For example, if you have a plan to open a new restaurant – it has to be viable, that is, it could create a profit. You might need £0.5 million start up capital. You could get £0.25 million through grants, but would need to raise the rest. You could borrow £0.1 million from the bank, but still need to raise £0.15 million. To do this, the organisation could offer shares to the local community who then become members of the organisation. Members would benefit, by being involved in the project, having a say at the AGM, and receiving possible dividends. The organisation would benefit by creating a pool of people interested in the project. The process of setting up community shares is quite complicated, and organisations would need support in doing this, which the DTA can provide.
Q: Setting up community shares seems very complicated. Is it unrealistic for RCOs to follow this structure?
R: It’s wrong to think that only large organisations can do this, as small ones can too. But a lot of advice and support would be needed. Loan finance is another way of generating income, other than grant funding. Organisations such as Charity Bank, Triodios, Social Investment Loan Fund, Adventure Capital Fund, Venturesome, Big Invest, and Unity Bank all provide loans and would be interested in making loans to community groups with a business proposal. In particular the Adventure Capital Fund gives practical advice on developing business plans, and provides grants for feasibility studies . It is essential that profit can be made from the project, in order to pay back the loan, and feed investment back into the community.
Q: Coming back to shares, and looking at it another way, can RCOs buy shares in development trusts, and then become members?
R: Not all development trusts have this structure. But it is important for RCOs to get involved in different networks, to build relationships with development trusts, make themselves known, and work together. I would recommend that RCOs look up development trusts in their area (a list of development trusts can be found on the DTA website), but also that they network with other groups. The success of Tiger 11 in Yorkshire & Humberside was partly due to their good networking skills, which is very important when building a business.
Q: But networking is a very specific skill, and RCOs would need support in doing this.
R: We are currently working with Black Training and Enterprise Group on a trial ‘road-show’, to raise awareness of the benefits of membership of the DTA to BME third sector organisations that are setting up or supporting community enterprise activities in order to provide a range of services to their communities. We would also like to trial this with RCOs and raise awareness of how they can get involved in development trusts through networking.
Q: The DTA has expanded its associate membership to create a new Community of Identity category which includes BME/faith/ disability/gender and other identity specific organisations. Do you have plans to include RCOs in the membership, or have you included RCOs in the BME group?
In this case I am sorry, the terminology was used loosely. DTA will make it explicit that the Community of Identity category does include RCOs so that we are not sending out the wrong message.
Q: The cost of membership might deter RCOs from joining the DTA, is this something you have considered?
We are currently renewing the fee, keeping it on a sliding scale. We know that for some organisations, even a low fee can be a challenge. If an organisation is really struggling, but is extremely keen to join, we are able to have a discussion and offer some flexibility. Joining creates a give-get relationship; organisations contribute to and benefit from the movement, sharing inspiration.
Q: Why have you decided to review the fees?
Fees haven’t changed for years. We decided to keep the fees on a sliding scale, rather than fixed amount, so that we don’t deter organisations.
Q: What do people gain from becoming members?
To be a full member we require organisations to be a development trust. To be an associate member, we ask that organisations support our aims and become partners to our movement. Associate member include, local authorities, businesses, community foundations, voluntary action councils and so on. The benefits from membership include: networking – attending our members conference, access to other voluntary, community and social enterprise networks through our strategic partnerships; voice and influence – by contributing to regional and national policy consultations helping to shape the agenda for our movement, access to representation and support on funding, lobbying and campaigning; and resources – access to specialist information and one-to-one advice from our regional and national staff team, receive a monthly e-bulleting with news on policy issues and so on. For more information, you can visit: www.dta.org.uk/memberoffer
Q: What is asset transfer?
Asset transfer is the process of acquiring under-used land and buildings from the public sector to community ownership and management – helping organisations to develop those assets and deliver long-term social, economic and environmental benefits within their community.
Q: Can you explain how the DTA Asset Transfer Unit might support an RCO to transfer assets?
Funded by the Department of Communities and Local Government and in partnership with Community Matters and the Local Government Association, the DTA has set up the Asset Transfer Unit which helps to empower local people and organisations to transform land and buildings into vibrant community spaces whilst supporting development of a thriving third sector.
It is the leading provider of expert advice, guidance and support on the transfer of under-used land and buildings from the public sector to community ownership and management – helping organisations to develop those assets and deliver long-term social, economic and environmental benefits.
We have a small team of information and advice officers that provide technical advice, over the phone and email, to organisations that identify an asset that they might wish to do something with; this could be unused land or buildings. We also have a campaigns policy promoting asset transfer. Among our development trust members, we now have £490 million in assets, both buildings and land. When asset transfer is done well, it can bring great community benefits. It’s also an area that could potentially interest many RCOs, as it relates to the right to own land.
Q: What are the future plans for the Asset Transfer Unit?
We aim to get many more assets transferred, to continue to give good advice and referral, and to raise awareness of asset transfer to a much wider audience.
Q: Your board members are elected at your AGM – are they in touch with BME/RCO groups, and their roles and needs, and how do you ensure diversity?
We seek diversity in different ways, through participatory events, and through our board members seeking out good practice from members’ experiences. We have produced a publication called Bonds and Bridges which highlights how development trusts have brought out the best in community diversity. For example, the Goodwin Development Trust shows an example of how people respond to diversity and challenges. Also, we have recently conducted a survey of our own board. It showed that our board is reasonably representative of our members, but only partially representative of the communities with whom we work, as they are so diverse. We intend to change this, as diversity is something that the board takes seriously and is very keen to embrace.