New report reveals that, to date, £210 million has been invested to create or save vital assets or services across the UK using community shares.
Today (25 January) it is also revealed that £2.2 million of new investment is is being injected into the community shares market to support even more communities wanting to raise funds using this unique form of finance.
Community shares enable communities to finance a diverse number of businesses that provide local solutions and boost local economies. People in communities can become investors in a community business by buying shares from as little as £10, making them co-owners and giving them a say in how the business is run. It’s a way for people to take ownership of local buildings or develop services that benefit their community.
The 'Communities doing it for themselves' report reveals that, to date £210 miilion has been invested by 130,000 people in 540 community businesses and organisations through a total of 710 share offers. This innovative form of finance is uniquely available to co-operative and community benefit societies. It provides them with much needed money to start, grow and be sustainable.
From saving crucial local services, to providing cultural spaces, supporting marginalised communities and lowering carbon emissions – community businesses are instrumental in tackling some of today’s key issues, including social inequality, the climate crisis and the epidemic of loneliness.
The report reveals a ‘snowball’ effect as more and more communities are seeing the power of collective action – and community ownership.
Heptonstall Community Assets is one of those businesses. It was formed to save a village post office under threat of closure in Heptonstall, West Yorkshire. Thanks to a successful community share offer, which received support and investment through the Booster Fund, the post office is now owned and run by the villagers.
Local resident Lindsay Smith said: "You realise what a lifeline it is. It functions very centrally in the little community that is Heptonstall. A shop facility like that is key for the future of the community. That’s why it was important for me to invest in it, wanting that sense of support to continue for everyone."
A much-loved independent local cinema, the Ultimate Picture Palace in Oxford, is another community business that was saved thanks to community shares. It also received support through the Booster Fund to launch a share offer which, by keeping share prices low, meant a wider range of people were able to invest.
Volunteer and former committee member Pat O’Shea said: "This cinema is an institution. It’s in a commercial area but it’s also important that there are cultural things going on. It’s a facility people love and it’s important to the community. The minimum investment was £50 – lowered to £30 for young people and local residents. It meant lots of people put in small amounts, which is why we’ve got so many members; it's a broad, inclusive base."
The Community Shares Booster Fund has been supporting communities with business development grants and equity investment since 2016. The fund is delivered by the Community Shares Unit at Co-operatives UK, in partnership with Locality, Plunkett Foundation and Co-operative and Community Finance. It has been funded by Power to Change and the Architectural Heritage Fund.
New funding from Access – The Foundation for Social Investment will enable further opportunities for harder to reach communities and more deprived areas to utilise community shares as a form of raising finance to save community assets or set-up vital services. This work will be delivered by Co-operatives UK, in partnership with Access, Co-operative and Community Finance and Community Shares ICOF.
Access awarded the funding as it recognised that community shares provide a genuine ‘patient equity product’ – a long-term investment where investors are prepared to wait several years before seeing any financial returns – in the social investment market which could help more communities.
Rose Marley, CEO, Co-operatives UK, said:
"£210 million raised by communities through community shares shows us the power of collective action. This is collective action by communities who are frustrated with waiting for change or concerned losing much-valued services. Community shares are enabling communities in innovative and life changing ways while ensuring that ownership and control of these community businesses stays with the people they matter to the most. It's like crowdfunding but you get to become an owner too. We are committed to enabling more communities to use this innovative form of raising finance thanks to additional investment from Access and the continued support from our partners."
Ana Van Bilsen Irias, Senior Programme Manager at Access – the Foundation for Social Investment said:
"Community shares are a flexible and effective way to raise finance – benefiting community businesses, investors and the wider community. This is the first time we have supported this type of offer – using funds from Dormant Assets through our Flexible Finance programme to expand the reach of community shares to underserved communities and providing the type of flexible and patient finance that people and communities need."
Tim Coomer, Business Development Manager at Co-operative and Community Finance, said:
"We are absolutely delighted to be partnering with Co-operatives UK on the new Access funded Booster programme. Helping co-operatives and community businesses access truly patient and supportive capital is incredibly important and works alongside our finance options to help grow the sector sustainably. We are keen that the combination of development support and investment will unlock the potential for disadvantaged and underrepresented communities to take ownership of local assets and control of enterprises that make their lives better.”
The Booster Fund supports communities preparing and launching community share offers. It also offers match funding (equity investment) into community share offers. As well as supporting community businesses to achieve their aims, this also generates greater interest in the offers, as John Dawson, Head of Market Development at the Community Shares Unit, explained:
"Our investments to date prove that institutional investment gives communities and potential investors confidence in a share offer. We know that for every £1 invested by the Booster Fund, it unlocks an additional £3.44 from community investors. That’s why the Community Shares Unit is calling for longer term institutional investment into community shares from Dormant Assets."
Tim Davies-Pugh, CEO at Power to Change, said: "We know that when buildings and services are owned and run by the community they serve we see the creation of community wealth with resources, jobs and money staying local, helping to grow and build economically resilient places that people can feel a real sense of pride in.
"The Community Shares Booster Fund continues to be a great way for community businesses to raise much needed funds, helping them develop and launch a community share offer, giving local people the power to invest and own the local buildings, cherished institutions and important services that matter to them. As an early backer of the programme, Power to Change has always recognised the potential and impact of community shares and what they can do for communities."
"We are delighted that Access have also recognised the value of the programme – this additional investment will allow Booster to engage more people with community shares and unlock power in more communities."
In October, the CSU wrote to the Department for Digital, Culture, Media & Sport calling for £40 million from the Dormant Assets Scheme to be invested in the community shares market. DCMS administers Dormant Assets which holds funds from bank accounts that are dormant for more than 15 years. The outcome of this consultation is expected in early 2023.
To find out more about applying to the Community Shares Booster Fund, go to www.uk.coop/boosterfund