Proud to be part of new £2.2m fund to help communities take ‘levelling up’ into their own hands
A £2.2 million investment into supporting community businesses has been announced, as a new report reveals that, to date, communities across the UK have themselves raised £210 million to save local assets and services.
The 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, us here at 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.
This support means that communities exploring community shares – a form of raising finance unique to co-operatives, giving communities ownership of the assets or services – can now access more types of business development support, grants, equity and even loan finance. This will be administered through the existing Booster Fund, managed by Co-operatives UK. Priorities for the fund include expanding the reach of community shares to new communities, excluded communities, organisations with diverse leadership and younger people.
The Community Shares Booster Fund has been supporting community businesses since 2016 with development grants and equity investment for community share offers, thanks to funding from Power to Change and Architectural Heritage Fund. Community shares enable communities to finance a diverse number of businesses that tackle problems and boost local economies.
Investors buy shares in a community business and have a say in how it is run. It’s a way for people to take ownership of local buildings or develop services that benefit their community.
The Booster Fund is delivered by the Community Shares Unit (CSU) at Co-operatives UK, in partnership with Locality, Plunkett Foundation and Co-operative and Community Finance. It continues to be backed by Power to Change, now with additional investment from Access.
John Dawson, Head of Market Development at the Community Shares Unit, said:
“Through this new investment we will be working closely with our partners Co-operative and Community Finance (CCF) and Community Shares ICOF who will also be a match investor and will offer the option to underwrite individuals buying community shares over a twelve-month period. CCF will also be able to offer loan finance to Booster applicants if this is needed as part of their overall investment raise.”
Data shows that, as well as supporting community businesses to achieve their aims, the Booster Fund also generates greater interest in community share offers. John Dawson continued:
“Our report in 2020 revealed that institutional investment gives communities confidence in a share offer. Our stats show that for every £1 invested by an institutional investor, it unlocks an additional £3.44 from community investors.”
According to the Community Shares Unit’s 2023 report, to date 130,000 people have invested £210 million in 539 community businesses and organisations through a total of 709 share offers.
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.
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.”
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.”
Our Business Development Manager, Tim Coomer 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.”
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.”