Introducing the Community Shares Unit

What is the Community Shares Unit?

DCLG-funded programme launched in 2012 and running to March 2015

Partnership between Co-operatives UK and Locality (building on an 2009 action-learning research programme)

Objective to grow the market for community shares, supporting: • Communities looking to develop share offers• Supporters exploring the community shares market• Intermediaries, practitioners and advisers involved in comshares

What are community shares?

“The sale of shares in enterprises serving a community purpose, with the aim of raising at least £10,000 in capital from no fewer than 20 members”

Unique to co-

operative and

community benefit

societies

Non-transferable, nominal

One Member One Vote

Exempt from

regulation under the

FSMA 2000

Interest payment

only sufficient to attract

investment

Powered by Withdrawable Share Capital

The benefits of community sharesCa

pita

l

“Community shares offers can provide long-term risk capital linked to the performance of the society” Le

vera

ge“Community share offers can lever further funding based on the ‘first move’ of the community”

Gove

rnan

c e

“Community shares can give members meaningful involvement in the running of the society”

Oper

atio

n

Community share offers can ‘bake in’ the customer base and promote member involvement in the operation of the enterprise”

Community shares in pictures

Case Study: Bell Inn, Bath

An iconic pub in central Bath suddenly came up for sale as the owners were retiring

A strong community of regulars, musicians and local residents were determined to preserve the ethos of the pub – they had 12 weeks to organise a community buyout

In this short period, the community raised £750,000 and secured mainstream debt finance to meet the overall purchase price of nearly £1m

The Bell Inn is a viable business which will enable interest payments to shareholders, alongside facility for withdrawals

Community shares over last five years

There have been 153 community share offers compared to 108 flotations (or Initial Public Offerings) of UK listed companies in the last five years E&Y IPO Global Centre of

Excellence

2009 2010 2011 2012 20130

5

10

15

20

25

30

35

40

45

7

29 2826

21

8

20

30

36

59

IPOs Community share offers

Community shares market indicators: 2009 - 2013

Nearly 400 new societies

registered

Over 180 share offers

undertaken

Est. £30m raised from over 20,000

members

Average offer raised

£200,000

Average membership 200 members

Average investment per member £1,000

Creative and media2% Pubs and

Brewing15%

CLT and Housing

3%Regenera-tion and develop-

ment7%

Community Retail24%

Other2%

Transport2%

Social Care2%

Energy and Environ-

ment33%

Sports 3%

Food and Farming8%

Key pillars of a successful share offer

Business model

Viable

Profitable

Sustainable

Community

engagement

Scale and scope

Attracting support

Building membersh

ip

Governance

Legal form

Rules

Conduct

Offer document

Accurate

Informative

Share offer

‘campaign’

With growth comes ‘responsibility’ - the future work of the CSU

Best practice share offers

Market intelligenc

e

Community Shares

Handbook

Practitioner training

and accreditati

on

Advice and Support

CSU compliance mark /

microgenius

CSU is working to develop the tools and structures that will support greater responsibility over quality for community share offers

Market Intelligence

Regularly updated

directory of registrations, share offers and annual

returns

Searchable and

exportable data

Forms the basis for more in-

depth research into

the development of community

shares market

Community Shares Handbook

Consolidation of all advice materials to form

Community Shares Handbook

Oversight from a technical committee of

government representatives and FCA

Collaboratively developed with

practitioners through an online platform

Regularly updated and monitored to ensure

relevancy and accuracy

Practitioner training and accreditation

Informed Current

High-quality Consistent

Recognition that

advice is:

Accredited training

based on practical

experience

Ability to issue

Community Shares

Compliance

Continued support as Community

Shares advisor

“to establish and operate a kite mark or code which would support the adoption and diffusion of good practice of community share offers as part of a co-regulatory framework ”

Underpinned by the Community

Shares Handbook

Awarded by accredited

advisers with CSU monitoring and

peer review

Associated complaints

procedure in which CSU arbitrates

Offered in conjunction with

hosting on Microgenius

Community Shares compliance

Introducing Microgenius

Technological tool for both enterprises and

supporters

Secure payment facility

Shareholder register

Social media and online presence

Visible portal for all

compliant share offers

CSU is running Microgenius as a pilot to explore the value of an online platform to host community share offers – since June 2013, six share offers have raised over £800,000

Online Resources

Tailored resources:

enterprises, supporters,

advisers

Directory of share offers

Secure practitioner

s area Forums and

FAQsNew case studies

Links to helpful

organisations

CSU and market development

By sector: exploring the

use of community

shares in new and emerging

markets such as heritage,

housing, media and transport

By geography: developing a

‘hub and spoke’ model for a UK-wide CSU which works alongside

the devolved nations

By audience: engaging new and promising audiences such

as local authorities, CDFIs and charities

Get in touch

www.communityshares.org.uk

www.microgenius.org.uk

communityshares@uk.coop