Crowdfunder UK has just launched a new concept in crowdfunding on their platform: Community Shares. A type of hybrid mix between charity and ownership, investors in these organizations own part of an entity they believe in supporting. Community shares are only possible for co-operative societies and community benefit societies thus the motivation is more social value than accounting gain. Crowdfunder has partnered with The Community Shares Company to offer this new service. Jessica Ratty, Crowdfunder Brand and Communications Manager, explained;
“Community shares enable the communities to get together to buy
shares in a project that has a strong community benefit – often making that project more sustainable or viable. The new product is suitable for community groups looking to raise significant funds from community shares. It creates an online community share solution which enables projects to easily create community share offers and digitally engage their community through a crowdfunding platform purpose built to connect them to people who can invest.”
According to the Community Shares Company, the concept has been picking up pace. Dave Boyle, founder of Community Shares, states;
“Community shares are growing year-on-year, with over £70M raised in the last 5 years. It’s the cheapest and easiest way for community projects like saving pubs, buying football clubs or renovating historic buildings to raise the six and seven figure sums they need.”
“With Crowdfunder Community Shares, we’ve used our combined expertise to ensure groups can spend as much time as possible banging the drum amongst their supporters to raise money – and avoid sleepless nights worrying about BACS transfers or bouncing cheques.”
Investors may earn income for shareholders. But they cannot be sold outright. Purchasers may have the opportunity to redeem shares back to the entity in the future but the objective is more about creating long term, committed community owners. Community Shares may be eligible for certain tax breaks, like EIS, that would benefit holders.
The very first offer is now live on the Crowdfunder site. Positive News is hoping to raise £200,000 to support the quarterly magazine and associated digital product. The business has been in operation for 22 years focusing on positive journalism. The pitch explains;
“…like every news organisation, we have to adapt. We need to innovate to become sustainable and to meet the growing demand for our journalism. And just like we have pioneered a more positive form of journalism, we are now pioneering a new way to run a media business. We’re becoming the first crowdfunded global media cooperative; owned by our readers and journalists.”
Positive News is becoming a cooperative to manage the shift in media consumption.
Crowdfunder is a rewards based platform. They are now blending into the investment world. The site claimed the top spot for rewards crowdfunding in the UK according to independent research topping well known global brands. In 2014, Crowdfunder went to the crowd to raise their own capital. The site raised its £500,000 goal in just 3 hours.
“Here at Crowdfunder we are dedicated to helping communities come together to make their great ideas a reality,” says Phil Geraghty Crowdfunder MD. “Our crowdfunders have had incredible success using rewards-based crowdfunding, so we are delighted enable communities to take the next step in funding by offering community shares in partnership with The Community Shares Company. “
Barry Sheerman, MP and Chair of the Westminster Crowdfunding Forum, adds;
“Crowdfunder has played a huge role in the education and understanding of rewards-based crowdfunding and it’s a pleasure to see the company continue to grow their offer by expanding into the delivery of community share issues. It’s an exciting time in the alternative finance world and I’ll look forward to seeing communities embrace the new opportunities open to them.”
Video Explaining Community Shares