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Rick Bond shares the lessons he has learned about the process of establishing a Trust to manage an arts organisation.

There was a single defining moment for me when I realised that the transfer from a local authority venue to a Trust would be worth the investment in my time and energy. It came when I discovered a file from my predecessor that ran to some 300 pages, accrued over a period of 30 months. Quite simply it sought to obtain (ultimately backdated) permission to dispose of a dozen or so very old polyurethane chairs. A Council Theatre Chairs (Disposal of) Sub-committee had been formed to look into the issue.

In search of benefits

People had talked about the cost benefits arising from establishing a Trust to manage my theatre. While this may or may not have manifested itself in budget cuts, this issue did make me appreciate that an awful lot of time and money invested in largely pointless exercises could be saved under Trust management. That was a few years ago and I have worked on other such transfers since. While each transfer experience has been very different, six simple rules arising from my first experience in the early 90?s have held true on each occasion.

The suggestion to transfer a venue to Trust control is usually driven by expectations of benefits. These can include gains in financial efficiency, increased operational flexibility once removed from the yoke of government administration, or that as a charity a venue should be able to obtain new sources of funding to support its development.

These are justifiable reasons but they do need to be tested to ensure that the benefits will be realised. While a charitably-managed venue can theoretically access new sources of funds, it may not have the expertise or resources in place to achieve this with immediate effect.

If such things are not identified and resolved beforehand the outcome usually results in a Trust going back to its local authority to request increased funding or support. This can negate the benefit the transfer set out to achieve. With research and consideration such issues and risks can be identified and resolved in advance.

Ground Rules

Everybody wants to work together for a successful outcome. Yet not going into the implications of the proposal details can mean that problems remain hidden until after the transfer has been completed resulting in your new enthusiastic Trustees being confronted with all sorts of unforeseen liabilities, which won?t endear you to them. For instance, who is responsible should a 7-year backdated VAT demand on membership fees be received two years later? Does the Council own all the venues assets or does some equipment belong to regular hirers? Who owns the assets of any Friends scheme? It is necessary to have established agreements and procedures for as many possible scenarios as possible, so that in the event of any action or claim these can simply be implemented. It is so much easier to agree ways to resolve theoretical problems than to wait until they occur.

So what sort of things need to be checked? Here are a few very general headings:

? A business healthcheck: How viable is the current organisation? What strengths and weaknesses are likely to become more apparent once released from local authority protection? Quite often an organisation will have to undertake some preparatory work to prepare itself for its new life as a Trust. Much better to be proactive than reactive

? Board recruitment and induction: Get people for the right reasons, to do the right thing, which means you need to work these out before you issue invitations to the party

? Memorandum and Articles of Association: Is everything you do covered by everything your new charitable status will allow you to do now, and in the future? Charitable registration can take up to a year

? The Lease: If premises are included in the transfer, who, for instance has repairing responsibility? What are the inherent risks? How much might this cost in future?

? Transfer agreement: What is the Trust inheriting and in what condition? This should include data and access to historical information as well as assets

? Grant agreement: How much do you really need? Remember that insurance and superannuation will cost a lot more. You may also require funds to cover new staff needed to compensate for the loss of central services. While local authorities will say they cannot guarantee levels of long-term revenue funding, there are safeguards that can be agreed. E-mail me and I?ll suggest a couple.

? A Business Plan: Obvious really. Probably many drafts. Include a full risk assessment as things will turn out differently and it is so nice to have pre-planned your contingencies. Allow for loss of key personnel, maintenance, debt and cash flow, IT-systems, political changes and potential shifts in the market environment. Decide also whether you will need to establish a separate trading company to cover food and drink concessions, unless of course these are pre-franchised in which case you need to consider the transfer of that particular issue

? Union negotiations: TUPE is a topic with which you will become familiar as you add its cost within the heading above. And don?t forget all that stuff about stakeholder pensions that will become an in-house responsibility

? Management of change: Devise a programme with your team to include internal communication systems to keep all staff in the picture, lest they begin to worry and start to read the back pages of ArtsProfessional! A transfer of undertakings is not something that can be entered into lightly, but if properly conducted, will result in planned benefits from being realised. However lengthy the process can be, with appropriate support it can be made easier and wholly worthwhile.

And finally, the best bit for me during that first transfer process? On the day contracts were signed I quietly dropped the Theatre Chairs (Disposal of) Sub Committee file in the bin and used my newly-acquired free time to get on with running a theatre.


1) Establish the reasons for the transfer and be sure that the benefits are possible.

2) Don?t push things through on the nod, this is one gift horse where you do look into its mouth.

3)The length of time you think you need bears no resemblance to the length of time the process will take. (Think of a number, double it?then add a little bit more).

4)The transfer is unlikely to result in immediate financial savings to both parties.

5)Invest proper time and money in the transfer process: you are establishing a new Trust at the same time as acquiring a business ? make sure that all risks have been accounted for.

6)Seek independent expertise ? there is much more to the transfer process than is immediately apparent and it will save you money and heartache in the long run.

Rick Bond is a partner of The Complete Works, a cultural consultancy and training agency for arts organisations and local authorities. t: 01598 710698, e: comworks@dial.pipex.com