see also Community Shares Unit
Community Shares is an English action research project looking at the use and potential of community share issues to see if they can be more widely used as a mechanism for raising capital for social enterprise and community projects.
With investment from the Office of the Third Sector’s Social Enterprise Action Learning Fund, the Department for Communities and Local Government is leading a two-year action learning research programme in the field of community shares and bonds. The programme is being delivered by the Development Trusts Association (DTA) and Co-operatives UK, in conjunction with the UK Social Return on Investment network (SROI).
Presentation by lead consultant Jim Brown describing the project: http://wikipreneurship.eu/images/b/bc/Community_Shares.pdf
First year's progress report: The Community Shares Programme: one year on
First five projects selected
The first five community-owned enterprises have been selected from 17 applications and are:
- Cybermoor, Alston, Cumbria
- Hastings Pier & White Rock Trust
- Ashington Community Development Trust (Ashington Minors Childcare), Northumberland
- FC United of Manchester
- Slaithwaite Cooperative Ltd (Grocery store), near Huddersfield
The selected ventures demonstrated that they:
- intend to raise finance through community investment, i.e. “the sale, or offer for sale, of more than £10,000 of shares or bonds to communities of at least 20 people, to finance ventures serving a community purpose”
- will issue non-transferable securities
- have a committed group of project champions and an established steering group, unincorporated body, partnership, association, or corporate body
- have community support for their venture
The successful projects will receive a package of funding and consultancy. A second round of applications will be available beginning September 2009.
Hugh Rolo, Head of Assets and Investment at the DTA said: “I am delighted with the success in recruiting this first tranche of projects which demonstrate the diversity of enterprises and the huge potential of using community investment to raise capital rather than increasing the level of debt and risk. An increasing number of communities are finding that local people also like the direct proposition of investing in something they can see, touch and benefit from.”
Pauline Green, Chief Executive of Co-operatives UK, said: “Community investment is about community engagement and this is at the core of the co operative way of business as demonstrated by our members. For example, The Phone Co-op has 6,735 members who have over £1.6m in their share accounts and, in December 2008, local people in Settle in Yorkshire raised £100,000 through a share issue to build a mini hydro-electric scheme in their town. I think other communities will want to follow their example."
The five successful projects
Ashington Minors is a private day care nursery situated in the most deprived area of Northumberland. Currently co owned by Ashington Community Development Trust and 3 private investors, there is now an opportunity for service users, staff and local residents to invest in the business and have a share of the strategic decision making processes and potential profits. The business has been operating for five years, and currently cares for over 90 children and employs 15 local people. Ashington Minors aims to build on its current trading success and become more integrated within the community.
“This gives Ashington Minors just the right support needed at an important stage to nurture their growth and enhance working in the community," says Tony Ives, Director of Ashington Community Development Trust.
Cybermoor is a social enterprise based in Alston, Cumbria which aims to bridge the “digital divide” in rural areas by helping people use the internet and provide affordable broadband. Our community shares project focuses on how we can build our own Next Generation Broadband infrastructure – laying fibre optic cable and installing high speed wireless links. Commercial operators will not provide this infrastructure to one third of the UK’s population leaving these communities to finance and develop their own solutions, as highlighted in the government’s recent Digital Britain report.
“We are really excited to be involved in the Community Shares programme, it will help us deliver Next Generation Broadband services around Alston and also act as a model for other people across the country who are unable to access high quality internet connections,” says Daniel Heery, Cybermoor Chief Executive.
FC United of Manchester
FC United of Manchester is committed to providing affordable football for all communities of Greater Manchester and was established in 2005 as an IPS, not-for-profit, democratically controlled club. It aims to raise up to £1m using community shares and bonds with the aim of building a new £4million community stadium in Manchester. FC United of Manchester recently received the Co-operative Excellence award for the Promotion of Co-operative Values and Principles. Organised by Co-operatives UK, the Co-operative Excellence awards recognise and celebrate excellence within the co-operative movement and were presented at the recent annual Congress in Old Windsor
http://www.cooperatives-uk.coop/live/cme0.htm (information about the awards)
Hastings Pier & White Rock Trust
Hastings Pier & White Rock Trust seeks to regenerate the pier buildings in particular the "apron" section closest to the promenade and refurbish bandstand pavilions containing 18 retail units with a £200k community share offer. The White Rock area has suffered from the closure of the pier and sits in two of the 10% most deprived wards in England.
Slaithwaite Cooperative Limited
Slaithwaite Cooperative Limited established an effective campaign, created a co-operative enterprise and raised over £17,000 through a community share issue in just three months. The move was in response to the closure of a valued independent greengrocery shop after well over 50 years of trading in the Pennine village of Slaithwaite in the Colne Valley, south west of Huddersfield. The shop is a vital piece of the local retail economy and is set to re-open in the next few weeks. The shop premises will also provide a home to the recently formed worker cooperative The Handmade Bakery, already creating a stir with their outstanding craft bakery.
Graham Mitchell, who chairs the cooperative said: “I think we have all been bowled over by the strength of community interest and support for this project. This is a fantastic example of what a community can achieve for itself. It’s much more than simply a shop: this is about creating community.”
On 26 Oct 2012, the Co-operative Group has launched a scheme to help kick-start social enterprises. The Manchester-based mutual has set up a £500,000 (€600,000) fund which will see it underwrite community share issues of up to £50,000 (€60,000).
The Community Share Fund has been developed to help projects that are struggling to get off the ground because of problems raising finance. The mutual will underwrite the shares so that local people will have the confidence to invest in a new co-operative enterprise. If the entrepreneurs fail to raise the total amount, the Co-op will buy an equity stake and sell back its shares once the venture has become a success. Additionally, if someone wants to buy a share but does not have the funds to invest immediately, they can apply for a Co-op loan and pay it back over time.
Meanwhile, the Co-op has also pledged to allocate a further £5m over the next two years to its Enterprise Hub, a nationwide advice and training service for new and existing co-operatives. So far, the Co-op has invested £6m and helped 1,000 mutuals.
The Community Shares Fund is owned and controlled by an independent industrial and provident society, Community Shares ICOF Ltd. It was set up in January 2012 by Co-operative & Community Finance with funds from the Co-operative Enterprise Hub and the offer of additional finance, if needed, from the Co-operative Loan Fund. All three organisations have been closely involved in the increase in community-owned ventures in recent years, and had come to the conclusion that community investment would benefit from a specific form of financial support.