Tell us about Foundation Scotland – who are you, what do you do and what is your role within the organisation?  

I'm Head of Communities with a Scottish charity called Foundation Scotland. Our work is about distributing other people's money. They might be families or individuals or companies, sometimes other charitable trusts and foundations who want to distribute money in Scotland and maybe don't have a Scottish base, and we will then run grant making programmes, sometimes loans as well, to support Scotland's voluntary and community sector. 

Sometimes those funding programmes are targeted to specific themes, sometimes the programmes are specific to places and certain geographies. We have a communities team which I lead that works specifically with place based money and our philanthropy team tend to support the thematic programmes that we run, which tend to be more national. 

What is a Community Benefit Fund?  How do they work?   How much are they typically worth?  

Community benefit funds are place-based funds from the owners of renewable energy projects, who will provide an annual payment which can then be used for the benefit of the community.  Predominantly, in Scotland, this is from onshore wind projects.

The funds come in different shapes and sizes and practice varies about how the area of benefit is determined, who administers the annual payments, who is making decisions about fund strategy and spend and how accountable and transparent a fund is. But most funds can be considered as assets contributing to or complementing a range of local and national policy priorities. They will typically operate for the lifetime of the project, which now is around 35 years. 

We are the leading national administrator of community benefit funds in Scotland, and we currently support more than 350 communities to distribute around £7m annually from over 100 different community benefit funds. We estimate this to be around 25-30% of the community benefit funds currently reaching Scotland’s communities.  

We often work with the community to design a strategy for that fund. Ideally, that strategy is informed by the community having some kind of action plan for the community. And it's great that Community Action Plans, certainly in Scotland, have got more and more currency, and are quite commonplace. 

A Community Benefit Fund might provide a million pounds a year into that community, it might provide £500,000, it might provide £20,000. Whatever scale it might be, which is determined by the size of the project and how much installed capacity the project has, that money will be very precious to the community. 

Community Benefit Funds generally operate without any intervention or involvement from local authorities or councils - communities themselves make the decisions. And that is exciting. 

What can the impact be on a community be if they are done well?   

What communities really want is control over the decision making. So, it's the power of making decisions that I think communities have long felt distant from that's what's so powerful with community benefits. Even if it's a small sum, the impact of that can be quite transformational. 

A great example is Dalmellington Bowling Club that benefitted from a fund strategy that had earmarked sub funds for each of the four communities involved in a particular community benefit fund area. About a week after the first payment arrived one of those four communities, learned that one of the local bowling clubs, which is a fairly iconic facility, was going to be put on the open market for £65,000 immediately and then go to auction if it hadn’t been sold by that Friday. Everyone was in a state of shock. 

The Development Trust, who we had been working closely with to develop the fund strategy asked if they could use some of their earmarked funds to purchase the facility. As it was in line with the strategy Foundation Scotland was able to promptly transfer the funds and the club was saved. It’s now in community ownership, and that all happened within a matter of days. 

The work we had convened over a three-year period with done by Dalmellington Parish Development Trust and other community organisations to develop the Fund Strategy had enabled that quick response. 

Community benefit money can be used and is being used all the time to secure community assets. Another community organisation was developing a hydro and they invested some of the money into that. Other communities are using Community Benefit Funds to address social issues. There are some really great examples of Community Benefit Funds contributing to social or affordable housing projects especially in rural areas where housing is such a challenge and threat to the longer-term sustainability of communities.  

In the north east, there's a Community Benefit Fund which is particularly focused on supporting climate, community led climate action. 

I would say also though that community benefit funds can provide real value in terms of smaller grants that can be transformative. An elderly person's lunch club to be assured of receiving a thousand pounds a year so that it can function well to do what it's doing, not just to provide a communal meal for elderly folk in the area, but maybe also help address some issues of social isolation, such as extending the lunch by half an hour to include some chair-based exercises. So they not only eat, but they maybe get a bit of physical activity, which they might not otherwise get. Maybe also, , a slightly higher grant could enable Citizens Advice Bureau to run an outreach service at the end of the lunch, so people are aware of any benefits they may be entitled to. 

These are the things that can have quite a lot of impact.

Is it only onshore wind where they occur?    

No, it’s not. The renewables industry has been pioneering and has really blazed a trail on making Community Benefit Funds available. 

We have just started a process of developing our first Community Benefit Fund related to a port in the north of Scotland that is going to be a hub for the growing offshore wind industry, and as a port they want to provide a community benefit fund of £100, 000 a year for the next 10 years in the first instance. 

Community benefit is also being provided by battery storage projects that are cropping up increasingly as part of the upgrade of the whole transmission infrastructure that needs to happen to cope with all the new electricity being generated from renewables. 

And then the transmission network itself, new pylons, will also have community benefit linked to it. The Department for Energy, Security and Net Zero, is currently completing, its guidance on the provision of community benefits from transmission infrastructure. 

The sums coming from this will be significant. There will also, separately, be a payment going to individual households particularly affected by this new transmission infrastructure to offset against their electricity bills. That is not community benefit, but it is being developed at the same time. The guidance for this is going to be published imminently.  

Useful Links:

Foundation Scotland

Scottish Government’s Good Practice Principles for Developers   

Community Benefits Map 

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