About grants and finance

Many of our venues are asking for advice about grants to make improvements to their buildings. Here’s the “big picture” view.

One of the real blockers for community venues is understanding how to fund a big energy efficiency retrofit. They don’t have spare cash. As energy prices rise and their buildings get more uncomfortable, this risks them going into a downward spiral. Fewer room hires means less money coming in and less service to the community.

The first thing is to understand is what it costs to run their building. A good way to look at it is: what would we need to charge people who use the building to make sure we break even? This is at least the cost of energy use – heating and lighting and cooking – plus a proportion of the cost of maintaining the building, especially keeping it dry. It might also include the cost of staffing the building. You can vary what rates you charge depending on how well the hirers match your mission or what they can afford, but if you go under, you won’t be serving the community well. Groups should have a strategy for setting their room rates that reflects this. For instance, sometimes they set a minimum charity rate at the cost of utilities for the room and amount of time a group is in, roughly averaged over the year.

The next thing is for groups to discuss is whether they need a retrofit. If the building is low occupancy and there is no unmet demand for space in the local community, it doesn’t matter what improvements they make – their spaces will still lie empty. In this case, changing over to a localised heating strategy is a good option. That still takes finance, but it avoids having to worry about heat loss and has a major advantage: the amount of energy you use will be proportional to the amount the building is used, and so linked to the income you have coming in. Localised heating means just supplying heat where the people are. Space heating means trying to warm all of the air in the space and is very expensive per building use if the building is only used occasionally.

Grants tend to be aimed at householders and businesses, and our buildings sometimes fall through the cracks, especially if the organisation that manages the building doesn’t own it. Funders are often happy to deal with organisations that have long-term leases (usually, over 25 years) that authorise them to make changes to the building.

There are three general kinds of “greening” grants:

  1. Ones for pioneers – the first to demonstrate a particular technology (for instance, at the moment, in trials for hydrogen boilers).  The riskier the technology, the more the grant is likely to pay full costs. 
  2. Ones for early adopters for technologies that the government wants to spread; for instance, the Renewable Heat Incentive.  These grants are aimed at getting a certain percentage of the population to use the technology, in support of the vendors, at which point they will be making stuff at scale well enough for the price to drop and the rest of the population to fund it themselves.  These grants are usually subsidies.
  3. Ones for later adopters. These aren’t usually grants at all, but low cost finance that spreads the cost of what is usually higher upfront costs and lower running costs.

There are also “community” grants.  At least in Scotland, these usually aren’t available for buildings that are only used for religious purposes. For these grants, you make the case that your community building either provides good amenity that is needed locally, or that the need is there and the refurbishment will make it possible to do that.  Funders want to see improved amenity and a business plan that will keep you sustainable.  They also want to see that you have engaged with the local community to ensure your plan is a good one, and they’ll probably want to see that the local community is behind you enough to put a bit of money in themselves. They might also want to see an expected carbon reduction. We think that if community amenity is improved so that building use goes up, keeping people from driving to venues further away, grant funders should accept that as a carbon reduction, but it’s very difficult to evidence that. In practice, a move from space heating to localised heating or a retrofit to reduce heat loss will both reduce carbon use even if building occupancy goes up, at least for buildings where insulation is possible.

We haven’t tried to work out who is funding what just now because it changes fast and is different in England and Wales than in Scotland, but if you have good lists other people update that we can point to, let us know.

Image by Hands off my tags! Michael Gaida from Pixabay