Development Trusts

Large and small, rural and urban, mainland and island-based, communities all over Scotland are seizing the initiative and setting up development trusts to improve their neighbourhoods – including town centres - through community-led activity, partnership working and enterprise.

Development trusts and community councils have different but complementary roles. Development trusts deliver projects and actions on behalf of the local community, whereas community councils represent the local community.

A development trust is a community-owned and led organisation, working proactively to combine community-led action with an enterprising approach to addressing and tackling local needs and issues. Across the country, development trusts are enabling communities to make their own plans and aspirations a reality - quite literally they are doing it for themselves.

The four defining principles of development trusts are that they are:

• Engaged in the economic, environmental and social regeneration of a defined area.
• Independent, aiming for self-sufficiency and not for private profit.
• Community based, owned and managed.
• Actively involved in partnerships and alliances between the community, voluntary, private and public sectors.

A development trust is a model for doing business in a community setting. They are social enterprises. They are independent but work with the public sector, private businesses and other community groups. This broad remit makes them ideal partners for working in town centres, where there are lots of different organisations involved.

A development trust can take forward specific projects, working with other organisations like local authorities, improvement districts (business or community improvement districts), housing associations and other organisations in town centres.

Development trusts, particularly those which are longer established, are often “community anchors”. This is a general term for organisations that are multi-purpose, community-led and based organisations. Community anchors can act as an ‘umbrella’ for a number of local organisations (giving them a stronger voice) and help everyone to work together to find solutions to community issues. You can find more information, and plenty of examples, on the Scottish Community Alliance and What Works Scotland websites.

Advantages:

• Community led, owned and managed.
• Ability to attract funding.
• Embedded in the community.
• Committed to long term future of an area.
• Incorporated body, reducing risk for those involved (see below).

Things to remember:

• Time and resources needed to get established.
• Time commitments of voluntary board members.

A good starting point are these two publications produced by DTA Scotland (Development Trusts Association Scotland):

• So you want to set up a Development Trust? (2mb PDF)
• Inspiring Change (2mb PDF)

There is no standard organisational form for a development trust. The three most popular models are shown below. Each of them creates an “incorporated” body, which means that the development trust becomes a distinct legal entity and, importantly, individual directors or trustees do not have unlimited personal responsibility for its financial obligations and liabilities.

Company limited by guarantee with charitable status (the most common)

• Company is effectively owned by the members.
• No share capital or shareholders.
• One person one vote.
• Minimal personal liability (usually £1).
• Directors protected in terms of personal liability in carrying out their duties.
• Regulated by Companies House and OSCR – the Charity Regulator for Scotland.
• Quick to set up.

Scottish Charitable Incorporated Organisation or SCIO

• Has most of the characteristics of a company limited by guarantee.
• Simpler in many ways, only reports to OSCR.
• Takes a little longer to set up.

Company Benefit Society or BENCOM

• Registered society that is run primarily for the benefit of the community.
• Owned by members through shares – works like a co-op.
• Cannot distribute surpluses to members but can pay interest on shares.
• Often when communities wish to develop Community Shares to raise finance.

To find out more about development trusts in Scotland, the best source is DTA Scotland (Development Trusts Association Scotland), an independent, member-led organisation which aims to promote, support and represent development trusts in the country.

Established in 2003, DTA Scotland now has around 300 development trusts as members. They are community-led organisations using a combination of enterprise and creativity to improve the quality of life for local people in urban, rural and island communities across Scotland.

By providing information, advice and support to existing and new development trusts, DTA Scotland helps to build independent, enterprising and resilient communities. Their work includes an informative website with a wide range of publications and resources, training and support, and a major annual conference.

DTA Scotland provides information, expert help and light touch support in areas such as governance, organisational development, financial planning and reporting, asset transfer and community ownership, staffing and community shares.

DTA Scotland is often at the forefront of new and creative approaches to community-led development. These include promoting and supporting community ownership / asset transfer through the Community Ownership Support Service (COSS, funded by the Scottish Government) and development of Community Shares as a new form of project finance.