Accessing and securing different types of finance to support your Community Asset Transfer is vital unless you have the savings or reserves to fund it yourselves.
Funding will likely be required for various different aspects of the transfer from the planning and preparation phase, the costs of purchase and development of the asset or to help your organisation get through the initial period of trading before you become profitable.
Successful fundraising happens through good planning and investing time and energy into the process.
Good governance and a clear business plan, along with community support, is key to sourcing funding for your project.
It’s essential you factor in plenty of time to raise funding and engage with funders at an early stage to confirm if your project is going to be a good fit for them.
The funding you can access will depend on the structure of your organisation, the project you are planning, the outcomes you are aiming to deliver and how much funding is required.
It’s also important to understand any potential restrictions or limitations related to the asset you are looking to take on, that many impact upon your organisations ability to acquire funding.
You may be faced with the challenge of wanting to secure the require finance before you’re willing to take on the lease or freehold of an asset, while a funder won’t commit to any investment without knowing you have the required tenure.
In this situation you’ll need to gain a letter from the local authority confirming that a lease or sale will take place once funding is secured, (also known as written assurance) and if possible, work with them to agree draft heads of terms (such as lease length and use conditions), which can be used as evidence.
There are many different types of funding that can be explored, including:
The first port of call for community organisations when looking for funding should be your existing members participants, and networks.
Read moreRaising funds, even small amounts, from those that already access your offer, will demonstrate how much support you have.
There are plenty of different ways to raise funds, from ‘buy a brick,’ to fundraising events or competitions.
HideCommunity organisations with charitable or CASC status can generate additional income through Gift Aid.
Read moreThe government's Gift Aid scheme enables community organisations to claim up to 25% on donations they receive from UK taxpayers.
HideCrowdfunding is a method of raising funds and involves gathering small donations from a large number of people, often through an online platform.
Read more HideGrants are financial awards, which are usually non-repayable but often come with terms and conditions that restrict their use to a specific purpose or project.
Read moreGrant funders often have criteria, with organisations required to apply by outlining how they’ll meet the criteria, the need for the funds and its impact.
If successful in your application, be sure to read any grant agreement carefully before accepting the funding.
HideSponsorship is a commercial agreement where a sponsor provides funds (or a service) in return for an association with your organisation.
Read moreWhen approaching a sponsor, ensure you offer something in return for their support, so the partnership is mutually beneficial.
HideEquity finance is when organisations raise money by selling shares.
Read moreThrough equity financing, investors will purchase shares from the organisation, in return for dividends at the end of an agreed periods.
Equity financing isn’t available to all types of organisations, especially charities, who are unable to distribute shares.
Community shares are a specific type of equity financing and give people the opportunity to come together and invest in a community organisation.
HideLoans are funds made available over a set period, where the amount and added interest must be repaid.
Read moreLoans come with a wide range of options and conditions, will have varied interest rates and are available through a wide range of lenders including major commercial banks.
Many of these banks have teams dedicated to the community and voluntary sector, including:
Specialist lenders for community asset development include:
HideNow you have worked through the importance of your governance and legal structure and have started to consider your business plan, appropriate tenure and securing finance, you will be getting yourself in a position to be ready to take on a Community Asset Transfer.
The next section covers the issues you need to be aware of if you’re undertaking any building works, including information on planning permission and design.