Community shares expert urges us to ‘own the enterprises that serve you’
Q: You were appointed as a founder member of Coops UK’s New Ventures Panel in 2002. Throughout your 15 years of community shares experience, what have been the biggest changes you’ve seen in the market?
The work of the CSU has had a major impact on the number of new Co-operative and Community Benefit Societies being registered, more than doubling the annual number of registrations since it began, and accounting for more than 60% of all new registrations.
We have completely transformed the landscape of equity investment in social enterprises; 15 years ago a Bank of England report said the equity investment in social enterprises was not feasible. We have shown that it is not only viable and sustainable, but has a transformative effect on communities.
Q: A large part of your work has been developing the recognised standard mark (SM) accreditation to provide some level of regulation to the market. What do you see as the benefits and challenges when adopting the SM?
The SM has had a big impact in raising the quality of business plans, offer documents and overall competencies of the practitioners who are engaged in supporting community enterprise.
It has provided assurance for the lay boards of societies that they are engaged in good practice, and enabled them to scrutinize their own plans and approach to raising capital. It has created sufficient confidence in the market for institutional investors to get involved by supporting communities and improving local economies.
Q: So far you’ve appraised 36 share offers within your role as Strategic Adviser to the CSU, is there one you would hold up as best practice (or a slight favourite)? What can other people learn from that?
That’s a really difficult question, because ultimately the aim of the Standard Mark is to bring all offers up to the same level of good practice, so that nothing stands out as being head and shoulders above the rest of the field. So maybe I’ll take the easy route out of this question and say that my favourite one is always the last one I did, which in this case is Ynni Teg. I was also very fond of the Le Public Space offer; they struck me as determined and passionate pioneers.
Q: If there were three tips or handy hints you could give to people thinking about doing a share offer what would they be?
- Focus on the community purpose of what you are doing.
- Ensure you have a profitable business model, based on social competitive advantage.
- Get your most financially literate supporter to write your business plan, and your most skilled writer, but least financially literate supporter, to write your offer document. That way you will ensure that your offer document is a good read and intelligible to everyone.
Q: If you had a crystal ball, what would you predict the community shares market to look like in Wales, in 15 years time?
It would be great to see the markets develop so that people can invest some of their long-term savings in their local communities, backing services that are important to them, rather than keeping all those savings in the bank.
We know the community share model works for pubs, shops, and football clubs, but I would like to see the model extended to include community assets like social housing, healthcare facilities, social care and education, creating a community alterative to Private Finance Initiatives. This will come about if communities, government and public service providers work together to create community ownership through investment.
Q: If you could sum up in ten words why people should invest in community shares, what would they be?
Invest in your community, own the enterprises that serve you.