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.

Jogger running up hillMany 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 This does not offer long-term stability and if it is withdrawn can lead to the closure of the facility or the services offered.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 enterprisesGlossary: Social enterprises are profit-making businesses set up to tackle a social or environmental need business can be run from buildings which can generate income on a not-for-profitGlossary: refers to organisations or initiatives which invest their profits back into their charitable activities 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 106Glossary: (S106) allows a local planning authority (LPA) to enter into a legally-binding agreement or planning obligation with a property developer for the benefit of the community agreement in a new development.