Community hubs – the importance of developing a sustainable business model

A blog by Niamh Goggin, Director of Small Change and member of Local Trust’s community hubs advisory panel

Local Trust and Power to Change have commissioned research on community hubs, to help groups starting, developing and managing them. We hope that, by sharing learning, more hubs will survive and thrive and continue supporting their local communities.

What is a community hub?

A community hub is a building or space that is;

• open and accessible to the local community;
• providing services that the local community wants and needs;
• where formal decisions about running and managing the hub are taken by people who come mainly from within the local community.

There is no “one-size-fits-all” community hub. Some are traditional community centres; others range from an allotment shed, to a local shop, a bus or a house. Some are run and staffed by volunteers while other well-established hubs employ professional management and well-qualified staff.

Scotlands and Bushbury Hill Big Local opened the Big Venture Centre, in 2017. Wolverhampton Council announced the closure of the Scotland’s Adventure Playground, which had been a community hub for many years. The Partnership set up a Community Interest Company (CIC) and successfully achieved a Community Asset Transfer of the playground to the Big Venture Ltd CIC. They spent £180,000 improving the centre’s facilities, bringing new services into the area and creating a thriving and sustainable social enterprise.

The Big Venture Centre runs a community cafe; The Shop in the Shed (clothes recycling), dance, fitness and personal training sessions; Rock School; bootcamps and a summer beach area with play sand and a paddling pool.

What have we learned so far from our research?

Community hubs range in scale from micro (turnover < £100k); small (£100k – £250k); medium (£250k – £750k) to large (more than £750k). Micro-hubs mainly rely on grants and donations, followed by building (rental) income. Small hubs are also reliant on grants and donations, followed by building income, but with social enterprise income becoming important. Medium hubs also rely on grants and donations, followed by building income, but social enterprise, fees and retail sales and service contract incomes are becoming significant. There is a step-change in income sources for large hubs, who receive over 40% of their income from service contracts, following by fees and retail sales; and social enterprise income.

The most common main activities are;

• Community hall or meeting space;
• Health or well-being activities;
• Educational activities;
• Skills and employment training;
• Community cafe.

Activities delivered by others, using the community hub space include;

• Health or well-being activities;
• Educational activities;
• Sports or fitness activities;
• Other arts or cultural activities;
• Skills and employment training.

Balancing needs

Thinking about your business model can help your community hub to become sustainable. When starting a hub, many groups have a long list of services that their community wants and needs. Some of these activities activities can generate income to cover their costs in full. Some will cost money and generate no income. Many will fall somewhere in between, generating some income but not covering costs in full.

What we call the “value proposition” is what the hub provides that benefits the local community. The “revenue model” is what the hub provides that people or organisations are willing to pay for. This might be income from renting space or providing services, but also includes grants and donations. The trick is to balance between delivering what the community wants and bringing in enough income to sustain the hub over the long term.

Community hubs have an important role to play in supporting local communities. Developing a sustainable business model means that they are more likely to survive and thrive for generations of local people.

The research report for Local Trust and Power to Change, Community Hubs: Understanding Survival and Success, by Neal Trup, David Carrington, and Steve Wyler, is available here. 

As a response to this research, we commissioned The Community Hub Handbook which is a practical, go-to guide for anyone running their own local community hub.