Efforts to drive economic empowerment through community share offers have just passed the £200m mark.
And a grant support scheme which has played a key role in driving the model has just been re-launched to generate further investment in community businesses.
The Community Shares Booster Fund offers business development grants and match funding to community businesses in England wanting to raise finance through community share offers.
It is delivered by the Community Shares Unit at Co-operatives UK, in partnership with Locality, Plunkett Foundation and Co-operative and Community Finance. It is funded by Power to Change and the Architectural Heritage Fund.
Community shares are a way for groups of people to come together and take ownership of local buildings and land, or to develop projects and services that benefit their community. Individuals purchase shares – from as little as £10 – and receive a financial return as well as a stake in the business.
Businesses can set the terms for payback dates and interest rates, which can help keep their finances on a sustainable footing. Figures released in October 2020 show that of the businesses that have raised finance through community shares since 2012, 92% are still trading.
To date, there have been 126,340 investors in community shares, allowing people to take ownership of the services and spaces that matter most to them. It helps empower people at grass roots level, enabling them to have greater control over what happens in their community.
Leeds Action To Create Homes (Latch) is one of those organisations. Latch, a Locality member, refurbishes derelict and run-down properties in Leeds to provide supported housing for people in housing need. Their community share offer raised £550,000 – which included match funding from the Community Shares Booster Fund – to enable them to provide more much-needed homes.
“That money will now transform lives,” said Latch CEO James Hartley. “When the profile of investors came in, there’s a significant amount of people from Leeds. They’ve seen the juxtaposition of empty houses and homeless people. They know we’ll use the money to create positive change. There are 150 investors. They’re the people of Latch now.”
The re-launched Community Shares Booster Fund is open to new and existing community businesses in England that want to explore a share offer or are already developing one. They can apply for:
- A development grant for preparing a community share offer to fund activities to get the business investment ready. This may include work on the business plan, community engagement work, developing the share offer document, promotional campaigns or costs associated with obtaining the Community Shares Standard Mark (an accreditation awarded to offers that meet national standards of good practice).
- Match funding for upcoming or current share offers in the form of equity investment from the Booster Fund. Businesses can apply for an equity match of up to £25,000 for a community share offer. This means that the Booster Fund could potentially match every £1 invested by the community, up to £25,000.
Rose Marley, CEO, Co-operatives UK said: “We’re proud to be launching the Community Shares Booster Fund, which will enable more communities to take control of the spaces and services that are important to them. Community ownership via community shares has been one of the biggest democratising forces in our economy of recent years.
“We’re keen to spread the word and reach groups that are currently less well represented in the community shares market – younger people, minoritised ethnicities and those based in areas of greatest disadvantage. We’re also keen to support proposals that focus on digital inclusion and tackling the climate crisis.”
Tim Davies-Pugh, interim CEO at Power to Change, said: “For communities to thrive, local people need to feel consulted and have a sense of self-determination. Taking ownership of the spaces and places that matter most is an important part of taking back control.
“Community shares are an accessible way for community businesses and organisations to generate funds, grow local support and raise the profile of their organisation, while giving local people an equal stake and say in how things are run. That’s why we are launching a new Booster Fund, which will support more community businesses to secure the long-term future of their community spaces.”
To find out more about community shares and the support available through the Booster Fund, visit www.uk.coop/boosterfund