Keeping It Local with Community Shares
As part of our commitment to Social Finance, the Trust has commissioned Cooperative Alternatives to develop a Community Shares pilot programme in Northern Ireland. Tiziana O’Hara is taking the lead on this initiative and here she tells us why this new form of investment is quickly gaining in popularity.
Tell us about Co-operative Alternatives?
Co-operative Alternatives is the only body entirely dedicated to co-operative development in Northern Ireland. We are helping interested groups and organisations to set up and grow their co-operatives.
We help them with legal, financial and business advice so that they can become aware of alternative ways of trading and contributing to the wealth of a community.
How do community shares work?
Community shares are typical of co-operatives. If you are a co-operative, you can sell a share in the community and raise enough money to start or expand a project that will benefit the community around it. Members literally buy into the idea and they do so for a small return, a non-speculative interest.
Contrary to ordinary shares, the ones that you buy in a company, the principle ‘one member, one vote’ applies and this ensures the democratic nature where everyone becomes a co-owner through their investment.
Is this type of investment modelled on successful projects elsewhere?
Yes, there are many examples in England, Scotland and Wales. Since 2009, there have been in excess of 120 successful community shares schemes.
Co-operatives have raised money for energy projects, the acquisitions of buildings for community use, purchasing land and running community supported agricultural projects.
Who should this idea appeal to?
The idea of community shares should appeal to anyone who wants to collectively address a need in their community which requires capital to implement. Community shares can also be used as leverage to attract other investments.
How do communities benefit?
The community will benefit because of the service that the co-op is providing or the space it wants to use. Part of the profit will be re-invested into the community to allow more development.
For instance, the profit made by a village shop owned by the community can be donated to a local charity or used to run a scheme for young people and employment.
What are the key areas you are hoping to assist?
Community buildings: a building in disuse can be an opportunity for a community to gain some space for their activities.
Community energy: a community may come together and participate in a collective solar scheme.
Community village shop: a community can rescue a failing shop because it is important to them.
How should communities interested in this scheme begin the process?
It’s very simple. We would encourage parties to complete an interest form or contact us via our website.
What must a project demonstrate in order to qualify for direction through this scheme?
You must be willing to register as an industrial and provident society, have an asset lock and have a clear idea in mind that will generate a profit.
Why is this type of social finance becoming more popular in the UK?
Other sources of funding are quickly disappearing and public money is simply not as available as it once was. In order to preserve services, places and spaces for the use of the community, people are coming together and taking the initiative to do it for themselves.
To find out more about Community Shares or to register your interest, please visit www.coopalternatives.coop.