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Community Enterprise Overview
Overview
Methodology
Structure
History
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Context

Community Enterprises provide the structural and organisational systems for community development which are run by local people.

Local Livelihoods designs legal, structural and procedural systems for specific community environments.

We provide in-house support to groups wishing to set up or expand, creating financial, social and environmental balance.

Business training and support is also provided, which helps establish commercial viability for Community Enterprises.

Background

The term 'Community Enterprise' was coined in the 1970s at Beechwood College to describe organisations that are specifically designed and structured to generate community economic and social wealth. Sometimes they are referred to as social or not-for-profit organisations or social enterprises; these are generic terms, Community Enterprise describes a specific structure. They are run democratically by, and for, a defined community of people and are registered as a company limited by guarantee: they can choose to also register with the Charity Commission for Charitable Status. This structure provides the legal qualification to conduct any form of commercial activity and/or social provision activity. This type of legal structure means that the wealth and physical assets of the enterprise are held collectively and can only be used to benefit the defined community and its members. It also provides limited liability so that the enterprise, and not the individual members, is responsible for any debts and other liabilities incurred by the organisation.

In addition, a new form of community enterprise registration called a Community Interest Company is currently being proposed by the government, which will retain the tax benefits of charitable status within a limited guarantee company. Community Enterprises start because people want to have an organisation to run a project or they are set up in response to a problem or a set of problems that need to be dealt with by the community. A Community Enterprise can be small; managing a single project/activity or can be large; managing a range of initiatives and activities. The organisational structure is democratic and accountable to community residents and other stakeholders through being membership driven. In order to fully engage the members a Community Enterprise is participative, transparent, accessible and accountable. Community Enterprise facilitates initiatives and creates the place where stakeholders meet and share ownership and control of community wealth in order for the community to gain benefit.

Community wealth is non-transactional and embedded within a local situation, and is experienced by the individuals living in the area. Community wealth can be defined as local (perceptions, shared physical and natural resources), in common ownership (economic assets through shared and not private ownership), trust and reciprocity (mutual support and sharing), organisational systems (co-ordinated actions and decision making) and entrepreneurship (both individuals and the community initiating new actions to gain local benefits and personal confidence). A Community Enterprise runs services to provide the community with asset ownership, training and advisory support, project development and credit facilities (such as a credit union or a revolving loan fund). The services vary and each organisation decides which ones they want to operate at any time.

The general policy of Community Enterprise embraces five equally important objectives (this is the basis of sustainability). These are: -

  • The community owns the economic assets which it can use
  • Social benefit for the community is recognised as benefits for the families and individuals
  • Through gaining knowledge members are confident to exercise their democratic rights in decision making
  • Resources are accessible to members to use in order that they may initiate their own projects
  • Natural and environmental surroundings are enhanced through all projects and activities undertaken by the organisation

A Community Enterprise has a dual focus on community benefit and personal confidence, which should be equally reflected in the structure and procedures. Community benefit is concerned with the services and facilities that are provided meeting the demand of the society of the community, and personal confidence is concerned with being involved in the processes and feeling included and part of the bigger scheme; one without the other leads to project failure.

Guiding principles determine the way a Community Enterprise is managed and held accountable to the members. Commonly agreed guiding principles are:

  • Membership is open to all persons in a defined locality or community of interest
  • Control is based on the democratic practice of one-person one vote.
  • Not-for-personal-profit but for community wealth.
  • Commercial aims and activities must not cause social or environmental hardship.
  • The Community Enterprise operates good governance through developing polices and organisational rules that are relevant to the community.
  • All assets owned by the Community Enterprise are the property of the membership and can only be used to benefit the community in the defined locality or shared interest group.
  • All individuals and groups who make use of the Community Enterprise's resources must adhere to the organisational rules.
  • The organisation applies Social Auditing as an integral part of its management procedure and uses the Social Audit to involve stakeholders in democratic participation in setting policy and long-term aims.
  • Recognises and responds to its stakeholders' needs and is itself an opportunity through which stakeholders can participate and learn new skills and gain confidence.