Development Trusts

Development trusts are community-led organisations working across town, city, rural and island locations throughout the UK, combining community-led action with an enterprising approach.

Although they are diverse in nature, and may not have ‘development trust’ in their name, they are all based on common principles. They are about people coming together to address local issues creatively using self-help, partnership working and collaboration, trading for social purpose, and ownership of buildings and land.

They aim to bring about social, economic and environmental renewal, creating wealth in communities and keeping it there.

The term development trust can generally be applied to any group or organisation which:

• Is owned and managed by the local community

• Has social aims relating to improving the economy, environment and culture of a community

• Generates its own income through enterprise and the ownership of assets

• Re-invests any profits or trading surplus back into running of the organisation or benefiting the community

• Works in partnership with other organisations (private, public and third sector)

Typically, development trusts exist to proactively make things happen for the benefit of their communities and are therefore likely to become involved in activities that carry a degree of financial exposure and risk, such as trading, owning assets, entering leases or other contracts/agreements, or taking on employees.

A legal structure with incorporation is therefore generally recommended. 

Development Trusts are commonly one for the following legal structures:

• Company Limited by Guarantee (with or without charitable status)

• Two Tier Scottish Charitable Incorporated Organisation

• Community Interest Company

• Community Benefit Society (with or without charitable status)