Charitable co-operatives: the case studies

Since the Co-operative and Community Benefit Societies Act in 2014, only two types of society can now be registered: co-operatives, which exist to benefit their members; and community...

Since the Co-operative and Community Benefit Societies Act in 2014, only two types of society can now be registered: co-operatives, which exist to benefit their members; and community benefit societies, which exist to benefit the community. Following a look at how charitable co-operatives fit into this, Susan Press looks in depth at case studies across the UK.

Villagers set up charitable bencom

Villagers in Shropshire have joined forces to restore their local pub to its rightful place at the heart of the community. Neenton Community Society was formed following the closure of the Pheasant Inn in 2006. Eight years later, the hostelry is back in business as a charity.

The society, which has around 130 members, is registered as a Charitable Community Benefit Society.

“Our raison d’être was putting something back into the village to rebuild a future for Neenton as a sustainable rural community,” said its chair, consultant John Pickup. “There was no public space or facilities, other than the church, where people could meet and socialise.”

The venture drew on the assistance of Co-operatives UK. “They helped us greatly,” said Mr Pickup, “with lots of practical advice on the correct structure to go for.

“Our model rules are from Co-operatives UK and we also had advice from the Co-op Enterprise Hub.”

The society secured £800,000 in funding – raising half from community shares and brokering a deal to sell an acre of land next to the pub to a local housing association to build seven homes.

There was also an £80,000 grant from Shropshire County Council and loans from Co-op and Community Finance.

The society has a board of nine and day-to-day management is carried out by Neenton Community Trading Ltd.

Neenton Community Society also worked with Innventive, an organisation that helps people run successful pubs, and eventually saw the Pheasant Inn reopen just before Christmas 2014.

“The plan was to open in June but then the contractor went bust,” said Mr Pickup. “The fact we are open and trading is remarkable and despite the problems we are still in line with our business plans.

“We had to delay opening our three bedrooms but they are now complete. And, as well as being a place for locals, we are stressing the fact we can offer superb Shropshire food in a real country pub.”

Projected turnover is around £350,000 a year but, in line with its status as a Charitable Community Benefit Society, there are other plans to address the charitable objects contained in its constitution.

The pub’s Oak Room doubles as a community space when the pub is closed or trade is quiet, and the society is committed to creating more opportunities.

“We are employing seven people, offering jobs and training in a deprived rural area, and we will be building on those facilities, once the project is bedded down and to the extent funding can be raised,” said Mr Pickup.

Future projects would be considered, depending on the success of the business, he added.

“We were disappointed some grants did not materialise, and because the builder went bust servicing the debt is much more of an issue than it was in the plan,” he said, “but we are confident of a  secure and sustainable future.”

Midcounties runs a payroll giving agency and community fund

Midcounties Co-operative has set up two charities.

Set up in 2013, Co-operative Payroll Giving is a standard charity which operates as a payroll giving agency, allowing anyone joining who pays UK income tax to give directly tax-free to the charity of their choice.

Operations manager Dally Purewal said: “We do it for free, supporting Midcounties’ core beliefs and social responsibility values, and ensuring that charities receive the maximum benefit of the donations made.

“People are more used to donating by standing order and direct debit and there is a lack of education in the marketplace but since we started it has been growing steadily.”

She added: “Our commitment is to ensure that all donations are ring-fenced, not used as working capital, and passed on to the nominated charity within seven working days of receipt, providing we have that charity registered with us.”

Payroll giving donations are deducted before tax: every pound donated only costs 80p for basic rate taxpayers and 60p for higher rate tax payers. Employees can choose to support any charity of their choice.

Unlike some other providers of payroll giving services, Co-operative Payroll Giving offers the scheme free to all who use it, and does not charge the employer or the charity either. This means the entire donation goes to the charity.

All costs of administering the scheme are absorbed internally by the Midcounties society.

The Midcounties Co-operative Community Fund is a charitable incorporated organisation set up in 2011 which offers £150,000 every year to community groups.

Midcounties makes a payment from its Community Fund (Image: Daniel Graves Photography)
Midcounties makes a payment from its Community Fund (Image: Daniel Graves Photography)

The money comes from a £2m funding pot created from dormant share accounts and government match funding.

Head of community engagement Di Bateman said: “The society has always contributed to community funding but a few years ago, when we were cleaning up our database, we realised there were quite a lot of members with dormant share accounts in the same way banks have accounts which are moribund.

“We use the money to fund projects but also ensure there is a pot of contingency money. We are committed to giving back to the communities where we work and creating long-term resources.”

Projects to benefit from grants of up to £2,000 include initiatives helping people with mental health issues and special needs, as well as counselling and community cohesion.

Youth organisations like local football teams, Scouts and Brownies also benefit from the funds. These are distributed in line with the co-operative values contained in the society’s charitable objectives.

The fund works in partnership with nine community foundations covering the areas where Midcounties trades, from Birmingham and the Black Country to Buckinghamshire and Shropshire.

Grants are issued twice a year with £75,000 being allocated each time.

Ms Bateman said: “It is important members have a say and are involved in how the money is allocated. We have a sub-committee of the board which looks at applicants from across our trading area to decide how much they get.”

Judging of applications is done by members of the membership strategy committee, which makes all the decision about which groups should receive funding. Applicants must be members of the Midcounties Co-operative and working in a community where there is a Midcounties store.

The current round of funding opens in August and the closing date for applications is 11 September.

East End Family Holiday Co-operative

Dozens of families are enjoying seaside breaks thanks to the East End Family Holiday Co-operative in Glasgow.

Launched in January 2015, it brings together 15 community organisations working with people facing unemployment, low income, ill health, bereavement, relationship breakdown and other challenging circumstances.

The venture received advice from Co-operatives UK and Co-operative Development Scotland before setting up.   

Development officer Jamie Mallan said: “There was a similar scheme, the Caravan Project, working in another part of Glasgow. We wanted to replicate that success in the north-east of the city which has  areas like Easterhouse and Parkhead, with some of the highest levels of poverty in Scotland.

“We are registered as a Scottish Charitable Incorporated Organisation. It’s a simple structure which means we have charitable status which enables us to raise funds through grants. Our charitable objects are in line with the co-op model and in the few months we have been running we are already well-known and respected.” 

Under the initiative member organisations can refer families to the co-operative if they are in need of a break. Support services like extra respite care and counselling are also available from member organisations.

Funding has been forthcoming from a range of bodies including the Lottery Fund, Glasgow City Council and local housing associations. More than 60 families will enjoy a week-long break this summer at a caravan park in Ayrshire, where the co-operative owns two eight-berth holiday homes. It is hoped they will be able to buy more caravans in the future and that the initiative can be replicated in other parts of Glasgow.

Mr Mallan said: “It’s going really well and we are fully booked till the end of the summer. For these families the holiday they cannot afford isn’t a luxury – it’s a lifeline. Not only is it something to look forward to, families get to rediscover one another. It can be a catalyst for change with issues like smoking or drinking, offering a chance to build the confidence of families making them stronger and happier, which in turn contributes to a fairer, healthier, caring community that benefits everyone.

“It’s also a much-needed break from the stresses and strains at home made worse by issues such as illness and bereavement.”

Paradise Co-operative

The Paradise Co-operative is an urban farming charity transforming an acre of derelict land donated by Wandsworth Prison.

Founded by local priest Jonathan Serkin and financial consultant Scott Thompson, who took time out from the City to set it up, it now has more than 300 volunteers.

Jonathan and Scott spent four years negotiating with prison bosses to secure the  site and got things up and running in November last year. Since then, volunteers have planted community orchards with apple and pear trees and beds of vegetables – from the humble turnip to mange tout and spinach. The project works with local schools and in partnership with a range of organisations including local staff Barclays Bank and students at Roehampton University.

Scott said: “I have always been interested in urban regeneration – then, after 18 years in the finance industry, I took a sabbatical in 2014 to focus on this project. It started some years ago when a few of us got together and planted trees at four local sites as well as reclaiming some land for a community allotment. In many parts of London there is a great desire by people to get involved in growing food but there is a decade-long waiting list.”

The group was set up as a Charitable Incorporated Organisation. “It makes life easier when receiving donations and applying for funding,” said Scott. “It also gives potential members and donors confidence we are working together as a team and that was high on our list of priorities.

“Our constitution also stipulates we are there for community development and education around food.”

Visiting pigs in Paradise
Visiting pigs in Paradise

The four trustees who run the co-operative now plan to open it up to wider membership. “As we begin to mature we will look at how to set up a more formal membership that will sustain us,” added Scott.

“We are still sorting that out but there is real enthusiasm and community engagement.

“It takes a bit of work and the co-op model is not necessarily something people understand at first but when they see it working, that changes.”

Originally, the plan was also to engage prisoners on day release but thanks to changes in government policy that is currently unviable.  However, families visiting the prison are signing up to get involved and many of them attended a recent summer fair.

Once food turnover has increased, there are plans to sell fruit and veg.

There has also been grant funding  from bodies like the Greater London Authority and crowd funding on the internet which enabled the co-operative to buy four pigs.

The founders already hope to extend their reach to further sites but in, the meantime, there is a lot to do on their first plot of land.

“People involved are from variety of backgrounds and age groups,” said Scott. “We have had surveyors and local builders who give their time freely to build our skills base. We mimic natural systems and there is no waste, no chemicals and minimal use of machinery. We are there to bring people together, to benefit each other, share our skills and our interests and  hopefully improve everyone’s quality of life.”

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