Assets and sustainability

When undertaking an asset based development project it is important to balance community need with commercial sense. Each project will have its own individual circumstances but a common factor is the long term viability and financial sustainability of the development.

Not every property or piece of land will become an asset for a community. It is vital from the outset that you demonstrate that your asset can be maintained and operated into the foreseeable future.

The feasibility and business planning stage of any development should assist you to determine whether your asset will be viable and become sustainable. Thorough planning and examining the feasibility of such a venture can help to reduce the risk of this happening.

Developing an asset

When developing an asset, there are two sets of issues to consider:

  1. How to develop an asset which is financially sustainable - that is, one which operates as an efficient business.
  2. How to develop an asset which will achieve the social, economic and environmental regeneration of an area - that is, provide some real benefits to local people.

This means that while community benefit may be the original vision which engages people's commitment, those creating and running a community building have to set up all the administrative systems of a business, follow all the legal requirements of a company, and be just as enterprising as any entrepreneur.

Before developing an asset those involved should consider:

  • What are we really trying to achieve - the purpose?
  • Do we as a community need to do that - what are the advantages and disadvantages?
  • How will the wider community be involved?
  • What are the critical success factors?
  • What skills and funds will we need to get started?
  • Sustainability - will we be able to keep the development going?

Useful resources

  • Devon Reinvestment Service has created Developing Community Assets, a toolkit which can help you looking at getting a project off the ground and how to examine its future sustainability. To download a copy in PDF format click here.

Managing and maintaining an asset

Purchasing a property can assist an organisation become more sustainable in the longer term by saving money that would have otherwise been spent on rental payments.

It can also help to generate income which can be undertaken in a variety of ways. From charging a fee for room hire to renting rooms on a permanent basis to other organisations. Owning assets can also provide collateral in case of the need for loan finance.

It is important however to remember that following the acquisition of property or land, these assets have to be managed and maintained in future years which is not always easy. Property is not always viable and can often become a financial liability.

The issues to be considered when managing an asset can be categorised as follows:

  1. Managing the physical care and maintenance – ensuring its upkeep.
  2. Managing the use of the asset – ensuring it generates income but is also used for community benefit.
  3. Managing the organisation responsible for the asset – ensuring it is managed properly and effectively.

Useful resources

  • WCVA’s buildings fact sheet discusses in more detail issues for consideration when running and managing a community building. To download a copy in PDF format click here.
  • Community Assets – the benefits and costs of community management and ownership, is a report commissioned by the Civil Renewal Unit through the Development Trusts Association. It explores the benefits and lessons of community-based organisations taking control, either as managers or owners, of the ‘assets’ used by their communities. To download a copy in PDF format click here.
  • The Development Trusts Association has produced the following guides to asset based development: