Charities and community groups looking to develop or create projects, from foodbanks to community-owned pubs, can use a new money-raising programme
Charities and community groups in Scotland looking to raise money to provide services for their community are getting the opportunity to reach potential social investors through a new crowdfunding programme.
Community Shares Scotland, which was launched this week by a consortium of charities and civil society groups led by Development Trust Scotland (DTA), follows the principles of established crowdfunding services such as Kickstarter and Indiegogo.
Giving all communities the support they need to utilise this form of finance will, we believe, not only create new local enterprises but also bring communities together in the process - Jackie Killeen
Crowdfunding offers both commercial and non-commercial ventures the opportunity to raise a sum of money by offering shares to people who put forward small amounts of money.
Community Shares Scotland’s version differs by focussing solely on connecting not-for-profit groups and investors looking to provide money for social good. People buying shares in the projects promoted through the site will recoup their investment through improvements to their community rather than profit. Although the sites creators say social businesses can offer interest to be paid on the shares if the profit from trading is sufficient.
Ian Cooke, DTA Scotland director said communities in Balerno, Edinburgh and Mull have raised hundreds of thousands of pounds using the method to fund important projects in recent months and the programme will mean many more groups will now be able to follow in their footsteps.
“Community shares provide a way for individuals and organisations to invest in key projects, helping bring them to fruition,” he said.
“Over the last few years community share issues have increasingly been used to fund renewable energy projects, take over shops and pubs, and save important heritage assets.
“No matter how much is invested, whether it is £50 or £10,000, each investor has an equal vote in the development and running of the project.
“So, in addition to raising finance, successful community shares issues can also help demonstrate community buy-in to other potential funders and stakeholders.”
The recent growth in crowdfunding is thought to be linked to the difficulty start-up companies are finding accessing funds from traditional lenders such as banks. Community Shares Scotland hopes it can provide organisations such as community groups looking to save a local shop or start a local food scheme with access to funds.
The programme is scheduled to run for three years and its partners include the Plunkett Foundation, Co-ops UK and Rocket Science.
It is funded by the Big Lottery Fund and Carnegie UK Trust through an award of £800,000.
Jackie Killeen, director Big Lottery Fund Scotland, said: “We are delighted to be supporting Community Shares Scotland to help local communities unlock the potential of community shares to fund new services that matter to them.
“Giving all communities the support they need to utilise this form of finance will, we believe, not only create new local enterprises but also bring communities together in the process.”
As well as putting communities, investors and other interested parties in touch it will also offer advice and assistance on best practice.
A series of Community Shares Scotland roadshows are scheduled to take place across Scotland providing local groups with more information about how to get involved.
Details are available from communitysharesscotland.org.uk.
