When the Society was established in 1911, it was for the purpose of providing housing in Winchester for low rents to those in need. This is a charitable purpose. It is known as an exempt charity, and the Society is not allowed to make profits for the purpose of paying out dividends to anyone. The Society’s income comprises rents, and its expenditure comprises running costs such as maintenance, staffing, insurance and long term improvement projects. Most years, the Society will have more income than expenditure (in other words, it makes a Surplus), which it needs to generate and save to pay for very large projects that will be needed every few decades such as roof works, drains and water supplies, and other such expensive or unexpected needs. This is the only way that such costs can be paid for, to secure the long term future of the housing on the estate. The saved Surpluses are known as Reserves, and the Society looks after its Reserves carefully by placing them in suitable banks or investments, until they are needed. Any interest earned on the Reserves is added on to the Society’s savings. Surpluses of income over expenditure that are kept within the Society in this way are not called profits, and this is why the Society is also described as “not for profit.”
