Communities across Europe taking ownership of local services and initiatives.
A project of the National Council for Voluntary Organisations (NCVO) and the Calouste Gulbenkian Foundation
Choosing the right form of organisation that is a good fit with the context, people and objectives of the project can be a daunting step for community groups. There is a risk in moving an organisation on from its informal but dynamic beginnings as a community led campaign or initiative, into something more official. The approach must enhance, and not hinder the efforts of the community and the task at hand.
Trends towards one type of organisation may in part, be driven from the state through financial and legal incentives. Over the years, governments, keen to encourage economic growth, innovation, greater accountability and management of costs, have created new legal forms of organisation for service delivery, in Portugal, the government created the Social Solidarity co-operative in 1996/98, in the UK, the Community Interest Company was established as a legal form in 2005, as a type of limited company that operates solely for the benefit of the members of the community.
There are four types of community-owned organisational forms most common across Europe, Cooperatives, Mutuals, Associations and Social Enterprises. Each have different qualities and come about depending on the objectives of the community, for example, taking over an existing service, or providing an innovative solution to a gap in provision identified by the community.
These can vary widely in terms of their legal forms, ownership and governance structure. However, of all of the cases they have the potential to be the flattest and most evenly distributed model of community control.
Despite varying widely, cooperatives subscribe to a set of common principles including, voluntary and open membership, democratic member control, and member participation through monetary contribution.
Two of the UK case studies are co-operatives: Organiclea is workers' co-operative and Carbon Co-op is a community benefit co-operative. Both organisations chose to become a co-operative once they had existed for a number of years. Prior to being a co-operative they operated more informally around specific projects. However, with growth and the recruitment of paid employees formalisation became a necessity. The organisational form they chose reflects the organisations' core values and vision.
The co-operative model implies that the organisation is flatter with a wider range of people involved in decision-making and more transparency. At Organiclea all members of the co-operative are involved in agreeing the organisation's strategic direction, but day-to-day decisions are made at the project level, to which the volunteers can contribute if they want. For Carbon Co-op the co-operative model is very new (July 2011) and they are still in the process of working out how best to proceed, so that members can take part as effectively as possible. They are considering, for example, having thematic sub-groups in order to share workload and self-organise around interests and skills.
The model developed by EWS cooperative breaks the traditional relationship between energy suppliers and customers by enabling the customers to be partners, co-producers, shareholders and co-decision makers. The success of the EWS has encouraged the emergence of many more energy cooperatives in Germany.
What a Cooperative model provides
A mutual is an organisation whereby the primary purpose is to generate benefits for members or a defined community. There are two types of mutuals, the first type is organisations that do not have external stakeholders and are owned by, and for the benefit of, members of the community. The second type of mutual exists for the development of a defined community. The member gets a specified benefit, services or ‘share’ in the company, this is nominal only and cannot be exchanged for money or a percentage of the profit.
What a Mutual model provides
An association is a group of individuals who enter into an agreement as volunteers to form a body (or organisation) to accomplish a purpose. This is generally the largest organisational type, and is often seen as the most popular form in European countries. Associations cover a huge range of activities and involve both small and large organisations and networks. In many countries there are no formalities necessary to start an association, though in some there is a minimum for the number of persons required to start an association. Some jurisdictions require that the association is registered with an official body. Some associations additionally take on a legal form (such as becoming a company limited by guarantee) so that they can enter into contracts with a limited liability for members of the association.
All of the Portuguese examples identify themselves as Local Development Associations, heavily volunteer-focussed, the Association model allows community groups to respond to problems and needs essential to the welfare and development of their communities.
The Portuguese associations have emerged to support the deep connection to the territory where the initiatives emerge – the initiatives are highly localised, and the associations can organize around a core set of values and resources, mobilizing in a bottom-up fashion, while retaining enough flexibility for the organization to remain resilient.
The three Portuguese associations are built on the central idea of active citizenship and participatory democracy, in solving community problems, in making decisions and in conducting innovative experiments.
What an Association model provides
There are also many other organisational forms which do not fall under the specific category of ‘community ownership’, but are often used inter-changeably. In particular the ‘social enterprise’ model is an important option for public services and can be defined as: ‘… a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or the community, rather than being driven by the need to maximize profit for shareholders and owners.’
Registered charitable status is just one legal structure out of many possible structures for social enterprises.
Two of the French case studies represent an attempt to develop a community-owned initiative through a social enterprise approach. Although the projects are run by a charity, or in the case of the e-commerce project, a training organisation, there is a real attempt to involve the community of interest in the growth and development of the project.
What a social enterprise model provides
It’s important not to get too fixated on the organisational form; the definition of community ownership is, in reality, a fluid one. Choice of structure cannot provide the only guarantee of success – in fact some cooperative or mutual organisations are poor examples of community ownership.
The case studies show how diverse the realities of community ownership can be, and the truth is that community ownership is much more about the value the community attach to the project, the extent to which they feel they are engaged in it, and the commitment of the organisation to community engagement. Any understanding of community ownership has to take into account how people in the community experience the organisation.
One clear example of a straightforward model of community ownership is Carbon Co-op [link], a community benefit co-operative which is owned by its members – people from the local community are involved in the initiative and can vote for the board and propose new motions. However, as community ownership isn't only about organisational form and ownership, it is about doing things in a certain way, and at the root of Carbon Co-op work is a very strong commitment to community engagement, and this is a common point shared by all the case studies.
In the Portuguese cases there is not so much a formalised arrangement with the wider community, but the organisations are well established, and have proven their ability to assemble people when needed. In the case of ADC Moura [link], although the formal participation of citizens in the governance of the organisation is more limited, the organisation has established a variety of ways in which they reach out to a wider representative portion of the community can be involved and engaged, for example regular meetings are held in each of the villages, these meetings had parallel children’s activities so that the parents could attend the meetings while the children were entertained.
At first glance the E-Commerce project is a straightforward social enterprise approach, but by handing over the tools to the users to develop their own projects, the organisation and the outputs can be classed as community-owned.
 Spear, Roger (2009) “European perspectives on social enterprise” in Paul Hunter (ed) Social Enterprise for Public Service: How Does the Third Sector Deliver?