This module covers:

  • The importance of good governance
  • The options for setting up your fund process

“Governance” is a term which is used to refer to general good practice in running your organisation. Transparent decision-making is fundamental to a successful representative community organisation. In this Governance module we look at openness and accountability which will help to ensure that your organisation operates as efficiently and fairly as possible.

Failure to maintain good governance standards can cause tension in your community, lack of trust with the developer, or even legal or financial difficulties. Most of these issues are easily avoidable if you set out with a clear process and knowledge of what is required.

What is involved?

The first point of openness is to ensure that everyone in the community has a chance to put forward their view. As mentioned in Module ‘Initial Approach’, all community consultations should be open to any interested individuals in the community. Advertise all events and progress as widely as possible, and be open to the need and want for any further events. Reschedule or repeat meetings if a large group of interested individuals cannot attend.

Your meetings must be well facilitated – in the early stages it is vital that everyone gets the chance to put forward their ideas. If you feel you need an external chairperson, ask an impartial local body or Councillor. It is vital the community feel they can attend and share their ideas in a neutral setting.. Some people will not feel comfortable expressing their views publically so offer other methods of gathering opinions, e.g. online/paper questionnaires. It is vital to have a process for anonymous or private feedback or ideas. Equally, do not run all your communication online as there may be some individuals without internet access in your area.

Open meetings are beneficial for those who want to discuss the options further.

Share all resources, including minutes and records of events as soon as possible. Make it known to the community where these can be accessed; use the developer’s PR to engage with the wider community if they are willing to help. Minutes should be written up after meetings with a clear note of any further actions to be taken, and with details of how the community can get involved in the next meeting or feedback on the minutes.

You must have transparent election processes, not only adhering to the requirements of your community’s organisational structure, but ensuring a rigorous process which avoids creating any tension in the community. For example, if there is a valuable resource in the community (i.e. retired professional), invite them to stand for election, but do not automatically assume that they will have a place.

Administration organisation

It is likely that you may ultimately need two separate groups– firstly an ‘administration organisation’ which undertakes negotiations with the developer, encourages grant applicants, develops any plans for the area and receives the funds. This is likely to be the constituted body you set up in Module ‘Setting Up’, or it may be an external organisation.

However, most communities will also set up a panel or ‘project evaluation group’ to assess individual grant applications. This panel may be made up of a few members of the administration organisation, may include the developer, a local councillor, or any other relevant individuals. If you have an external party dealing with the majority of dealings in the process, the panel will likely include a few individuals from this party.

In some cases the ‘administration organisation’ will choose to take on the role of the panel as well, and will make all decisions themselves. This is partly dependent on your own ideas on the matter, and the size of the fund. It may not be worth setting up an additional panel for very small funds, while it will be considered a more open process if there is a panel made up of a varied group of people when dealing with larger sums.

This set-up is shown in the diagram below:

  1. Developer gifts money to community
  2. Administration organisation determines desired direction and outcome of community fund based on development plan and strategy
  3. Projects apply for grants using grant application forms
  4. Panel assesses individual applications based on criteria and strategy. If successful, the panel will allow the administration organisation to release the grant.


It is vital that this process is completely open and accountable; all decisions of the panel must be justifiable. For this reason it is essential that all grant applications are assessed using the same process.

Who is going to distribute the funds? This will depend on who holds the bank account – do you need to apply directly to the developer? Remember that whoever holds the bank account will receive the interest, so ask that the money sits in the community organisation’s bank account until drawdown is required.

Further resources

We recommend looking at Skye and Lochalsh’s Community Toolkit: Toolkit/ctoolkit?PageName=Setting-up-Groupor- Project/choosing-a-structure.htm

This toolkit offers a great deal of advice on the setting up and management of community groups.

Co-operative UK have a useful toolkit on governance: suk_simplygovernance_webdownload_0.pdf

There are some useful guidance notes on filling committee positions here: finding-new-committee-members/