Monday, April 22, 2013

new support for local communities to raise startup finance from their neighbours

The, a small Co-operative Development Body (CDB) based in south Wales has recently set up a new website aimed at helping new and growing co-ops with their Community Share Issues.

Alex Bird, one of the partners in the co-op, realised after working with a number of community co‑ops trying to finance projects through share issues, that whilst they could market themselves easily to local people, communicating to the wider public wasn’t easy on a small budget. He and his colleagues have worked with community shops, community centres, pubs, football and rugby clubs, festivals, food co‑ops, bike shops, off-road cycle centres, recycling projects, gyms and energy co‑ops, and all had difficulty marketing their share issues. Many didn’t proceed with a share issues because they couldn’t see how they would get sufficient share sales and the activists involved looked to other sources of finance such as grants and loans.

Some projects they’ve worked with have been very creative in their share issues, linking up with credit unions and CDFIs to enable people to get lines of credit or save up to buy shares, but they still find it difficult to contact their diaspora, and you can only raise so much from local people.

Many projects have a wider appeal than just their immediate neighbourhood, and there is a large body of people across the UK and further afield who don’t have a project nearby but would like to support one.  Real ale pubs, vegetarian and vegan shops, football clubs, and of course ecological and green energy projects are examples of projects with a broader appeal, but many such projects weren’t getting through to their potential share buyers, and at times weren’t hitting their finance raising targets.

After many discussions about who wasn’t doing what and whose job it was to sort out this problem, and why “they” should be doing it, did what co-operators always do in the end – got on with it themselves. Using the well-known open source software from WordPress and with the help of Co-operatives UK Internet Services they have set up a .coop site from their own resources.

The new website is up and running at and features all the Community Share Issues they know about free of charge in a classified style listing, plus lots of advice and guidance. The site is presently entirely self-funding, although as it develops they hope to bring some sponsorship on board in order to raise income and grow the site, so they offer paid for features as well as the basic free listing.

Tuesday, April 2, 2013

why being a charity isn't always the best way to 'do good'

The recent news about Charity bank giving up its charitable status to better allow it to gain access to investment in pursuit of its social mission caught my interest - it challenges the accepted norm that charitable status is always the best form to adopt to gain revenues in pursuit of achieving social goals.

I’ve always cautioned start-ups with a social mission about the risks associated with charitable status: it can be limiting in allowing you the flexibility to change your focus and activities in response to changing needs (owing to the strictures of charity legislation); it enforces limits within your governance that prevent you being able to be led by beneficiaries or employees; and as to the argument that you have to be a charity to access grants - many grant making trusts and public funding programmes aren’t concerned about your having a charity number. 
Finally, some feel that being a charity is a vital part of their business model in allowing them to gain business rate relief, but I’d suggest that any business model that is dependent upon securing rate relief is perhaps far too fragile to be able to survive in an increasingly competitive environment.

So - well done to the Charity Bank for recognising that being a charity isn’t always the best way to pursue a social mission: a salutary example to the wider sector.