A community share offering can both unite and raise investment from the very people which an enterprise intends to benefit.
Crowdfunder.co.uk helps to facilitate community owned assets, with an active network of thousands of people investing in and supporting community enterprises. From shops and piers through to football clubs and farms – the list of sectors is growing all of the time.
We sat down with Dave Boyle, Director of The Community Shares Company, to find out more about the importance of community shares and what he thinks the future holds.
What are community shares?
“There’s a special type of crowdfunding where people don’t just give you money as a donation or for a reward, but to instead become the owners of whatever organisation is trying to raise the money.
It works like a normal donation where you support the organisation and want them to be successful, and like a shareholding where the shareholders become part-owners of the business and might be able to share in the success at some stage should the funds be there.
As a shareholder, they get a stake in the organisation and elect the Board of Directors as with any other company. They also have a chance of getting their money back (and maybe with interest) if the organisation has managed to generate a surplus. That gives them a long-term interest in the success of what they’ve invested in.
Like normal shares, there’s a chance you might be able to get some of your money back as a tax break, but unlike normal shares though, community shares cannot be sold on to someone else, and regardless of how much you have invested, you get the same say as anyone else – one member, one vote.”
Why does the UK need community shares?
“Community shares are a way for people to take control of the things that matter in their lives and to work with other people in order to achieve things that they can’t on their own. Feeling powerful by coming together is good for communities and good for people’s wellbeing. Communities which successfully raise money together to make something amazing happen rarely stop there and often go on to do more things.
It’s a great time to be doing them too. There’s £1.2 trillion in cash savings in the UK and with historic low interest rates, most of that is earning very, very little. That means organisations doing share issues don’t have to promise much by way of financial return to make it better than the bank for a lot of people, whilst at the same time as helping the organisation they’ve invested in be able to grow. People who invest in community shares tend to want to see their investment make their community richer, not make themselves a fortune.
£1.2 trillion is an easy word to say, but if you counted one number a second and never stopped or never slept, you’d count to a million in about 11 and a half days. But 1.2 trillion? You’d be counting for 38,000 years. That’s an awful lot of opportunity to make that money work harder to improve communities.”
Why should people invest in community shares via Crowdfunder?
“Crowdfunder’s platform is the best in the UK, because it’s been built on the experience of thousands of projects. It makes the process really, really simple.
But what’s also great is how easy it is to let people know when you’ve invested, so you can help support the project you’ve just supported.
That’s the key thing – as organisations only get the funds people have invested if they hit their target, recruiting your friends and family to join you once you’ve invested is what makes the difference to the offer being a success or not.”
What do you think the future of community shares looks like?
“I hope that the future sees more people investing and owning the things that matter to them – especially spreading beyond the pubs, shops and football clubs into even more sectors and organisations who’ve raised capital start to see possibilities for their next share issues on Crowdfunder.co.uk.
In the medium term, I’d like to see community shares become a viable means of people investing through local investment funds. This will provide patient capital to social enterprises to undertake all manner of things and will ultimately make their money work harder for their local communities as a much more democratic form of finance.”
When communities take ownership of the things that matter most to them, they become stronger – so don’t just follow the crowd, be the crowd.
• Read more about how Crowdfunder can help you with your community share idea and use the form to get in touch today.