What is ARCCO and how does it work? How do you raise revenue?
The Addison Road Community Centre Organisation (ARCCO) is the head lessor of the community centre – a 9acre site with over 30 heritage buildings.
ARCCO has two major components:
We manage and care for the centre, and run community development programs. There is a synergy between the two, as we put our site to use to raise revenue for its care and our programs. We use the site as a base for our community development programs, as well as creating affordable spaces for the NGOs, community orgs and artists you’ll find here.
We are lucky to have the head lease for this whole site, so we can raise money through rents and venue hire. We also apply for grants, and raise funds through our social enterprises – such as the StirrUp Café and the Sunday tollgate.
Do you get government funding?
We do, but only for successful grant applications, so it is therefore earmarked for very specific projects.
As we mentioned, we’re lucky to have the head lease, as it is increasingly difficult for not-for-profits to raise money in a climate of shrinking funding. We have seen this first hand as organisations who’ve had their funding cut have come to us to seek affordable spaces. In this climate, not-for-profits need to be creative and often make a considerable investment to ensure they have the funds to run their programs. A good example is the Newtown Neighbourhood Centre, who run the Newtown Festival to raise money for their homelessness programs.
We are in the rare situation of having a stable income through our site. It is our responsibility to ensure that our rates reflect a fairer portion of today’s cost of managing and caring for the site. This allows us to continue to invest in our centre in order to strengthen our programs and take good care of this important asset for the community.
Unfortunately, in part due to the structure of our membership – which is exclusively for tenants – and our board, which is mostly tenants with two community reps, ARCCO was not raising anywhere near enough revenue from rents for many years, and was losing money by shouldering too many of tenants’ costs – such as electricity, water usage and rubbish collection.
For the past five years, management has been committed to changing this through several means, including incrementally updating rates that hadn’t changed for 20 years and requiring tenants to cover their own utility costs. We also encourage tenants to apply for infrastructure grants to improve the facilities from which they run their business and organisational activities.
We are committed to striking a balance between remaining below market rental rates for organisations that provide important services to the community, and upholding our responsibility to care for the centre and engage in community development. For example, our policy states that any not-for-profit organisation that provides services to the community will not pay more than 50% of market rent. We have an equitable rental charge policy that determines rents based on the type of organisation – for example artists, government funded agencies, retail, etc. pay different rates.
How can I become a member? Is it democratic and inclusive?
Unfortunately, our membership is not inclusive. It excludes a vast majority of the community as only tenants at the centre can be members. As you can imagine, this creates a conflict of interest.
ARCCO is committed to changing this, but it requires a two thirds vote by our members (who are also our tenants). In 2017, we’ll be taking the vote to our members to change the constitution and allow a broader community input and membership, and we’re confident we’ll have a positive result.
How much do you subsidise your member tenants?
On average, our tenants pay 70% less than commercial rates (at the time of writing in late 2016).
Who are your Board of Directors?
The majority of directors on our board are tenant members, with two positions for community reps.*
*( we need to write proper bios for board members & list on website.)
Why does a community based organisation need cash in reserves?
During our recent crowdfunding campaign, we were sometimes asked about the need to fundraise when we had some cash in reserves, and why it would put us at risk to use so much in one go. The reason we require reserves is to budget for the expenses of maintaining such a large heritage site. Our centre sits on 9 acres, with over 30 buildings – some of which are over 100 years old – over 160 trees, and kilometres of plumbing, wires and roads.
On top of this, we offer highly subsidised rates. While the average tenant pays 70% less than commercial rates, we can’t offer 70% less to tradespeople, contractors, cleaners or staff.
While we budget carefully, there will always be extra expenses. Like most organisations, when we plan ahead to mitigate risks, we take into account the potential for litigation (?). Our updates to tenants’ rates from the early 90s to better reflect the contemporary costs of running the centre is an example of a necessary but unpopular decision. If we were ever to go to court, we’d be relying on our reserves.
How do you make decisions about who becomes a tenant?
Applications for tenancy are assessed by the seven directors on the board. ARCCO considers the kinds of services an organisation provides as an important factor in this decision, and often goes to extra lengths to ensure important services can find a home here. This has lead to the tenancy reflecting a diversity of groups based on age, ethnicity, disadvantage, etc.
Wirringa Baiya Aboriginal Women’s Legal Service is one group that ARCCO went to extra lengths to create space for onsite, when they were suddenly left without an office at their previous location. Likewise, when Community & Cultural Connections – an organisation with 40 years of history supporting migrant communities in Marrickville – had their funding slashed, ARCCO made the decision to heavily subsidise them, as it is Marrickville’s only Culturally and Linguistically Diverse aged service.
Is ARCCO a cooperative?
No, ARCCO is a public company limited by guarantee
The difference is that a co-op is primarily established for the purpose of its members. ARCCO is established for the purposes of serving our community, but our exclusive membership creates a conflict of interest that can make this difficult – another reason we want our membership to become more inclusive to reflect the interests of the broader community who benefit from our space, not just those who rent here.
Have you thought about fundraising and providing tax deduction?
Yes. Another reason for changing the constitution in 2017 is to ensure we have DGR/PBI status. This will:
a) Hold us more accountable.
b) Create greater opportunities to access funding sources. For example, several companies that have social responsibility funds have offered us funding in the past, and the fact that we don’t have DGR/PBI status has often meant they’re not able to donate to ARCCO.
Making our membership more inclusive is a necessary step for ARCCO’s application for charitable status to be accepted.
How do your members strengthen ARCCO?
It is a wonderful and rare situation to have so many community based organisations, not-for-profits and artists working in such close quarters, and it creates great opportunities for collaboration.
As members come and go, they are strengthened by the subsidies, visibility and cross-pollination our centre fosters. They also have the opportunity to leave this important community asset in better shape than they found it, by partnering with ARCCO to improve our facilities, grounds and community engagement.
Our members are encouraged to partner with us on grants that can better the centre, and to contribute to events and promotion – for example Radio Skid Row helps promote and create media output from events, and Youth Off The Streets have partnered with us on a number of grants that will improve facilities for youth at risk and the homeless. Members have helped to fundraise, increase use of the centre, and promote community understanding of ARCCO and the diversity of other tenants that pass through our gates.