FAQs

What is Communitybuilders?

Communitybuilders is a £70m investment fund which takes forward a commitment within the Communities in Control: real people, real power White Paper to build more cohesive, empowered and active communities.

The fund, which is being managed and delivered by Futurebuilders England (on behalf of the Adventure Capital fund) and The Community Alliance and is jointly run by Communities and Local Government and the

Office of the Third Sector. The Communitybuilders Fund is designed to strengthen the resilience of 'community anchors' (multi-purpose, community-led organisations) across England through a mixture of financial and advisory support.

Who holds the contract, and who will be delivering the Fund?

The Adventure Capital Fund holds the contract; however it will be delivered in partnership with Futurebuilders. Futurebuilders will work in partnership with Community Alliance.

The Community Alliance is a partnership of bassac (British Association of Settlements and Social Action Centres), Community Matters and the Development Trusts Association.

How long will the Fund run for?

The Adventure Capital Fund has a five year contact to deliver the Fund, however the money must be allocated and spent by March 31, 2011.

Where does the money for the Fund come from?

The £70m is provided by the department of Communities and Local Government.

Do organisations need to have public sector contracts to be eligible for investment?

No, but they need to be developing a sustainable way of generating income, whether this be through providing office/meeting spaces, general services or contracts.

Is it only existing organisations that can apply?

Communitybuilders will be looking to support existing organisations, but organisations delivering new activities / projects will also be eligible.

Are there any restrictions on where the organisation is based?

Communitybuilders will support organisations across England, in both rural and urban areas. Applications will be judged against the Communities and Local Government criteria on merit and not locality.

My organisation is not ready for capital investment yet. Can we still be involved?

Yes. Communitybuilders can provide funding and advice throughout the project, from pre-feasibility work right through to capital expenditure. Our Business Development team will help you select the stage that is best for your organisation.

Our organisation is unincorporated. Are we able to apply for Communitybuilders support and investment?

The Development product is available to all organisations including unincorporated ones as long as you demonstrate that you meet the eligibility criteria.

Feasibility – You can apply for a feasibility grant. If your application is successful before you are able to draw down the grant you will need to provide evidence that you intend to incorporate. As a minimum we would want to see copy of a signed resolution from a board meeting stating your intention to incorporate, including an indicative timescale by which it is completed.

We may also make any further release of grant dependent on evidence of completion of further stages in the process and we will ask that you submit your certificate of incorporation to us once it has been confirmed by Companies House.

Unincorporated organisations are not able to apply for a main investment.

Our feasibility / main investment project is to develop housing. Is it eligible?

Applications for projects that related solely to housing development are not eligible. If your plan includes a housing element but there is a community facility central to the proposal then it may be eligible, but we will only be able to support the community element. Whilst the aim of the programme is to help community anchors become stronger financially. It is not designed to provide funding for what are essentially commercial enterprises such as property development.

Can I apply for staff costs as part of a feasibility grant?

You can apply for staff costs but there are a couple of things to bear in mind. If you are looking to use existing staff to do the work then you will need to let us know how those posts are already funded and whether you need the grant to backfill their posts whilst they work on the feasibility scheme. You can use the grant to top-up part-time staff. What we can’t do is agree a grant for posts for which you already have core funding.

Bankability

All of our funds have been established to help eligible organisations overcome barriers in accessing finance. In this context we need to explore whether or not any investees that approach us could raise all or part of their funding from commercial sources.

If you are applying for a main investment we will ask you if you have asked your bank for finance. If you have not approached your existing bankers we may ask you to do so before taking your application any further. If your existing bank has declined your request or if you would like an alternative opinion/quote we are able to approach other funders on your behalf via our Funders Forum.

When assessing bankability we will also consider to what extent an organisation could reasonably make a contribution to the cost of the project from free reserves. With feasibility grants we must be satisfied that the feasibility work could not proceed without support from Communitybuilders. The application form contains a section for organisations to provide additional information in this respect.

Will you invest in more than one organisation serving the same neighbourhood?

If we receive an application from more than one organisation serving the same neighbourhood, each application will be assessed on its own merits including consideration of the following questions:

  1. How does each organisation meet the fund criteria?
  2. Seek external independent views from key partners in the local area such as the local authority.
  3. Establish whether there are any potential areas of overlap between the organisations e.g. types of activity, services targeted at specific groups within the community. Can the organisation demonstrate that their work complements rather than duplicates that of the other potential anchor organisation?
  4. Do the organisations work together at the moment? If not is there scope for future collaboration? If there is scope we may be able to provide you with support to develop a partnership.
  5. Is there evidence that the market can support more than one anchor in the area?

The extent to which these questions can or need to be answered will depend on which Communitybuilders products you are applying for and what stage of development your organisation has reached. It is possible that there may be some occasions when more than one organisation in a specific area receives Development Support or a Feasibility Grant. This will only occur if each organisation is able to demonstrate that they meet the criteria and have made a good case for support. As both of these products are about establishing potential and viability we expect that the work that is carried out at these stages will provide further information on the above questions.

It is unlikely that we will make more than one Investment in organisations serving the same neighbourhood unless it is clear that the market can support more than one anchor and the organisations in question do not carry out duplicate activities.

What sort of support will the Fund provide?

Communitybuilders will provide a mix of loans, grants and non-financial support at different stages of the project cycle.

What is the loan / grant split?

We operate on an overall split of 60% loans and 40% grants with flexibility in individual cases to respond to specific circumstances. Our assessment method is to start at 100% loan and work back to establish the amount of loan that an organisation can afford. We match the realistic income streams for an organisation against potential repayment schedules and social impact. It is critical to maintain a balance – it is not our intention to invest in an organisation and leave it weaker than when we invested by reducing reserves or skewing its balance sheet – but neither is it our role to remove all risk. This only applies to the investment element of the fund.

How much funding can organisations apply for?

The minimum and maximum investment amounts will depend on the 'stage' at which the investment is made.

Why the focus on loan finance?

We want anchor organisations to be financially viable in the long term, so that they can help communities for generations to come. In order to achieve this, organisations need to move away from grant dependence and consider other ways of financing themselves. Loans will help build organisations towards increased independence.

What interest rate will loans be offered at?

Loans will be offered at a fixed interest rate of 5%.

Can I afford a loan?

Communitybuilders loans will be based on a type of financing called 'patient capital'. This includes finance models which are more suited to the needs of community organisations, such as longer repayment terms, deferred repayments, lower interest rates, and using increased social benefit as a means to pay back part of some loans.

What will the investment packages look like?

Packages will vary depending on the 'stage' at which the investment is made. Organisations can apply for investment at any of the three stages. Our Business Development team will help you decide which stage is best suited to your organisation.