We’ve probably all heard of Crowd Funding but how many of us have heard of Community Shares? Crowd Funding is most often used by individuals who want to fund a personal project and will give investors a token gift in return.
The Community Shares concept which has been on the go for decades, allows funds to be raised for enterprises which will benefit the community, by selling shares in the enterprise to “ordinary” people, with each investor having only one vote at share holders meetings, no matter how many shares they own.
In England (where the Community Shares Unit which covers the whole of the UK is based) there are currently 200 – 300 Community Shares projects on the go. In Scotland, there are far fewer. That’s why the Big Lottery, along with the Carnegie Trust, decided it would be a good idea to finance a three-year project put forward by the Development Trust Association Scotland, aimed at helping people in Scotland fund community enterprises using the Community Shares system.
Community Shares Scotland opened for business in April last year (2014) and is run by Kelly McIntyre and Morven Campbell.
Said Morven: “In a small percentage of cases, there might be a financial return for people who invest in a Community Shares enterprise but the vast majority are investing for what’s known as a social return.”
Community groups who decide to go down the Community Shares route to raise funds for a project have to form themselves into a co-op or a community benefit society so they can register with the Financial Services Authority. But don’t let that put you off!
Because Community Shares Scotland has been set up specifically to help people set up viable Community Shares funded enterprises.
Along with advice and information to guide groups through the process, Community Shares Scotland can also provide up to six days of free expert consultancy once a project starts to take shape.
Said Morven: “We’re already helping and supporting a number of Community Shares enterprises in Scotland including two renewable energy projects and “Dig In”, a community green grocer’s in Edinburgh which aimed to raise £30,000 with shares priced at £25 each.”
Community Shares Scotland are particularly interested in hearing from community groups in towns and cities, as well as less-well-off rural communities, who have ideas for enterprises with an arts, heritage or sports focus.
“There are three basic questions we ask people when they contact us with an idea” Morven explained. “Is the project viable as a business? Will it help the community? Does the community want it?”
She continued: “We’ve also drawn up a fuller list of questions that groups can go through to help them assess whether or not the Community Shares option would suit their enterprise.”
Morven added: “Community Shares can be an excellent way to raise funds and it’s also been shown that it can be a lever for other funders to support a project.”
Further information from: www.communitysharesscotland.org.uk