Organisational Development

Setting up a new organisation

For any organisation looking to own or run a community library, it is important to have a robust structure with a written constitution and appropriate legal status to enable the responsibilities and financial liabilities to be taken on. This is not only to safeguard the organisation and the individuals running it, but to also give funders and other partner organisations confidence that they can invest their time and money in the transfer.

Setting up a community organisation should happen only where and when it is necessary. In the initial stages it is best to utilise existing community structures. This reduces the potential for time and resources to be wasted if the transfer does not come to fruition. It also makes it easier to reach people. You may be able to find details of existing community organisations from Locality, your local CVS, or your local authority.

A new organisation may be justified where:

• No relevant community organisations currently exist in the area.
• Where a purpose has been defined and a new organisation is needed to pursue the transfer.

When setting up a community organisation there are several possible incorporated legal structures, including Company Limited by Guarantee; Company Limited by Shares; or Industrial and Provident Societies (IPS). You might also want to decide if you want to form your organisation as a Community Interest Company (CIC) or a Registered Charity or similar.

Deciding which type of structure is most appropriate is crucial and should be given significant thought. Each structure has its own set of strengths and weaknesses.

The choice of organisational structure will influence:

• What rates may be payable to the local authorities, and what discounts may be considered.
• What sources of funding and finance you are able to access.
• What level of accountability and control the local community has.
• The liability of the organisations members and management group.
• Reporting requirements

Research should be undertaken before making a decision, and it is advisable to seek professional advice to avoid potential problems further sown the line.

The oragnisational development guide, and the simply legal toolkit are useful sources of information to guide you through setting up a new organisation.