The purpose of the Booster Programme is to build on the pilot rationale and continue to support groups to overcome three critical challenges when seeking to raise finance through a community
1. Communities are unable to launch a share offer due to perceived and real constraints at the development stage
2. Communities, especially more disadvantaged groups, face a series of challenges during the share offer which prevents them meeting their targets or proceed with the venture due to
3. Communities develop and launch their share offer having not adopted good practice guidance, leading to growing levels of poor practice which may, in turn, weaken consumer confidence,
threatening the community shares market as a whole
Secondly, it is to realise the second purpose of the pilot – determining an intermediated structure that can continue to invest on pari-passu terms and achieve long-term sustainability for such a funding initiative. It will also expand on this objective, to determine the ability for an institutional investor to provide ongoing value to societies as an “active member” providing guidance and oversight through the established co-operative governance structures of participating societies.
The Community Shares Booster Programme is a funding scheme to support community share offers. It will invest equity up to £100,000 to match community shares in societies that can demonstrate higher than average levels of community impact, innovation and engagement. The programme will also provide development grants of up to £10,000 to help societies get investment ready and meet standards of good practice. Match funding will be in the form of equity held on equal terms with other community shareholders.
Power to Change has provided £3m funding for the Booster Programme over a five-year period from 2017-22. The programme is expected to match fund around 60 share offers in the first three years of the programme (to 2020) and then provide active investor support to societies on a continuing basis. The programme is run by the Community Shares Unit, a joint initiative between Co-operatives UK and Locality.
The Community Shares Unit was established in 2012, since when there have been over 350 community share offers in the UK, raising more than £120m in share capital from over 100,000
people. Community shares are defined as non-transferable, withdrawable shares in an asset locked society that has at least 20 member-shareholders and £10,000 in share capital. Power to Change funded the Community Shares Unit to run a Booster Pilot Programme in 2016-17, which resulted in 12 societies launching successful share offers, raising over £1.5m in community shares, matched by just over £600,000 of Booster equity.
The objectives of this new Booster Programme are to help disadvantaged and under-represented communities develop successful community businesses, especially in under-represented trade
sectors, and financed through community share offers based on new forms of investment proposition, institutional support, and business appraisal methodologies. The programme is aimed at
new and existing community businesses; it is not suitable for newly formed community groups that are in the early stages of developing a community business proposal.
Applications are accepted on a rolling basis, with grant and investment decisions made within eight weeks of application. Development grants are aimed at societies requiring support to prepare their community share offers and obtain the Community Shares Standard Mark. Applications for equity match are open to societies that are investment ready, including those that have already launched their share offers.
The term ‘community shares’ refers to withdrawable share capital; a form of share capital unique to co-operative and community benefit society legislation. This type of share capital can only be issued by co-operative societies, community benefit societies and charitable community benefit societies. Community shares can save local shops and pubs, finance renewable energy schemes, transform community facilities, support local food growing, fund new football clubs, restore heritage buildings, and above all, build stronger, more vibrant, and independent communities.
The Community Shares Booster Programme is open to new and existing community businesses that are planning to make, or have recently launched, community share offers. It is a rolling programme of support, with applications accepted anytime between December 2017 and December 2020. To be considered for support and funding through the Community Shares Booster Programme you must at the very least:
● be based in England
● be an emerging or existing community business,
● be able to address an identified charitable purpose
Also for your information, we have attached A guide to Community Shares