Gareth Jones meets Scotland’s first SCIO, to mark a decade of the new model for charities being created

Socal communities are growing closer after a year spent at home – but the pandemic has left society itself more divided.

At the forefront of overcoming this is South Seeds, which has always been ahead of the curve as an organisation.

The charity has been promoting sustainability at a local level since its formation a decade ago, long before the issue of carbon neutrality was on the agenda for many.

And the group also set the trends from its formation as the first Scottish Charitable Incorporated Organisation (SCIO) to be founded.

The concept of the SCIO was created on the back of the Charities and Trustee Investment Act (Scotland) 2005, providing another option for bodies wishing to register as charities in Scotland, and for those existing Scottish charities which wished to adopt a different legal form.

South Seeds was founded by Kirstie Penman, now head of programmes at Firstport, and Reuben Chesters, founder and managing director of Scotland’s first social enterprise supermarket Locavore.

The pair had the idea that they wanted to improve the area, and work on sustainability, with a focus on creating community gardens in vacant land and helping housing stock become more energy efficient.

Penman was working at law firm Burness at the time, and was tipped off that setting up as a SCIO may work well for the organisation.

She said at the time: “SCIO status offered us an opportunity to set our sights higher and to take on more ambitious challenges than we would have been comfortable with as an unincorporated association, especially in terms of entering into contracts and employing staff.

“As we are currently run entirely by volunteers, it was important for us to be able to cut down on administration, but at the same time protect those people giving up their time to a very worthwhile project.

“Because SCIO status provides protection against personal liability for individuals, we believe it will make it much easier for fledgling organisations like ourselves to get up and running.”

Lucy Gillie, general manager of South Seeds, has been at the organisation for nine years and said the model has worked perfectly.

She said: “They were very quick off the mark. The SCIO legislation was so easy to use and accessible, Kirstie and Reuben were quite young at the time, and the format was very easy for them to use.

“It’s been a really easy model to work with, going forward. It’s meant we have delivered loads of different projects over the 10 years. We’ve always held a public AGM and it’s been really easy to report to OSCR.

“We’ve made little tweaks to our constitution twice, and that’s been easy to do as well. It’s meant that governance hasn’t been a huge burden. We’ve been able to put the bulk of our efforts into project delivery.”

There are now 4,908 SCIOs in Scotland, a significant slice of Scotland’s voluntary sector. For those SCIOs that filed annual returns in 2018-2020 (3,179), annual expenditure was a combined £350,962,792, with a combined income of £378,037,436.

The model has been a popular one for those starting charities, or reforming an organisation, as the SCIO created the opportunity to address a number of issues for charities. For a sector, which prior to this consisted largely of unincorporated bodies, the SCIO offered incorporation with the protection of limited liability for its members (who are often the trustees), but without the complexity of company law and the additional burden of dual registration. Before SCIOs, the issue of personal liability was problematic, with some charity trustees not being fully aware of their obligations and undertakings.

The other major advantage of SCIOs is corporate personality, offering a legally convenient means of owning property, being a party to contracts and taking or defending legal action (the benefits of limited liability originate from this advantage).

The SCIO form is straightforward and accessible to organisations of varying sizes and servicing different client groups. It was designed to be a credible legal structure, which would engender trust and confidence amongst those it interacted with.

A report prepared by Braw Data Ltd for OSCR in 2019 showed the model was benefitting organisations.

SCIOs were on average growing in income by 4.7% per annum, the study showed.

SCIOs have accounted for a greater proportion of new charities over time: in 2011 this legal form was selected by 10% of newly registered charities, increasing to 58% in 2018.

Since its formation, South Seeds has worked with thousands of residents around south central Glasgow, with a mission of enabling southsiders to lead more sustainable lives.

The charity offers home energy advice to residents, has supported cycling projects in the area and operates a tool library from its hub in Victoria Road.

South Seeds has helped to lead the effort to breathe life into the urban area, bringing in more than £1 million into a community which has changed markedly over the last decade.

Gillie said: “There’s always been a transient community in the area. It’s near Central Station, it’s always had that feel of being very fluid – Reuben, Kirstie and myself all came here from other places.

“It’s changed hugely, there’s now a segregated cycleway that runs right through. We started off in the back room of another organisation, but are now in the high street. We get a lot of public engagement, and this has been important during Covid as our window has been a great place to share information.”

The last 12 months have been challenging for South Seeds, as they have been for the majority of organisations, however the group has focused on maintaining positive engagement with the community. The tool library has been offering click and collect during lockdown, the energy service has continued over the phone, and the group is now working on a new newspaper that discusses air pollution in the area. A new community garden will be opened imminently near the Queens Park Recreation Ground.

The 10-year anniversary will be marked at the charity’s AGM, with representatives from the local community being invited to attend with their ideas for the next five to 10 years.

“It’s fantastic to reflect on our success,” said Gillie. “We’re now the right organisation at the right time, with COP26 coming to Glasgow, as we’ve been working on these issues for 10 years. We were essentially set up to achieve net zero, but that wasn’t talked about then.

“We’ve been able to support and help a lot of other organisations, and explain how easy it is to be SCIO. A lot of people outside the sector still haven’t heard of the term, but once they’ve met a SCIO and found out a little bit of information, they instantly understand how it works.”

What is a SCIO?

• A Scottish Charitable Incorporated Organisation is a legal structure which has been purpose-built for the voluntary sector in Scotland.
• It provides limited liability and a separate legal identity to organisations that want to become charities but do not want or need the complex structure of company law.
• This means that even the smallest charity can access the benefits of incorporation – including limited liability and legal capacity.
• It is only available to charities with a principal office in Scotland and is regulated by OSCR and subject to the Charities and Trustee Investment Act (Scotland) 2005.