Some £210million has been invested to create or save vital assets or services across the UK using ‘community shares‘, while £2.2m is being injected to further boost communities wanting to raise funds using the unique form of finance.
Community shares enable communities to finance a diverse number of businesses that provide local solutions and boost local economies. People 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.
According to a new report, 130,000 people have raised £210m investing in 539 community businesses and organisations through a total of 709 share offers. This innovative form of finance is available to co-operative and community benefit societies, and 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.
To find out more about applying to the Community Shares Booster Fund, click here.
