Community shares
Community shares are a means of raising capital for enterprises serving a community purpose by selling shares to local people. The key aspects are that they must raise at least £10,000 from no fewer than 20 members, shares are withdrawable (can be sold back to the organization) rather than transferable, provide interest payments only sufficient to attract investment, and have one member one vote governance structure. Over 120 community share offers have been completed since 2001, raising over £15 million for organizations like community shops, pubs, renewable energy projects, and local food/farming. The Community Shares Unit was created to help grow the market for community shares and provide resources for communities, investors, and practitioners.
Community shares
- 2. What are community shares? “The sale of shares in enterprises serving a community purpose, with the aim of raising at least £10,000 in capital from no fewer than 20 members” Powered by withdrawable share capital Unique to Interest co-operative Exempt from payment Non- and One Member regulation only transferable, community One Vote under the sufficient to nominal benefit FSMA 2000 attract societies investment
- 3. Community shares registrations 120 100 80 60 40 20 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 to Aug
- 4. Community shares 2009-present Renewable 248 new societies 80 share offers energy registered completed Community shops and £15.2m raised Average raised pubs from over 15,000 £195,000 members (median £80,000) Local food and farming Average Average membership 192 investment per (median 150) member £1,029 Sports and heritage
- 5. Community share offers: Four pillars Business Community Offer Governance model engagement document Growth Scale and Legal form Purpose stage scope Income Attracting Expertise Demand generation support Capital Building Conduct Timeframe requirement membership Necessary but not sufficient Overlapping and pervasive
- 6. Community shares and community finance Leverage: equity and debt provision Confidence: due diligence and underwriting Inclusivity: instalments, thresholds Proof of concept: early-stage finance
- 7. Case Study: FC United
- 8. Introducing the Community Shares Unit Vision: to grow the market for community shares DCLG-funded programme for three years Partnership between Co-operatives UK and Locality (building on an action learning research programme) A resource for: Intermediaries, practitioners Communities looking to Investors exploring the and business-support develop share offers community shares market community
- 9. How can the CSU help you? Brainstorm and feedback from three groups: Practitioners currently involved in a community shares initiative People with more general interest, Practitioners maybe as deciding whether potential community shares members, is relevant to their investors or activities volunteers
- 10. More information www.communityshares.org.uk www.uk.coop locality.org.uk [email protected]