What are Community Shares, and Why Should I Care?
In last week’s blog, we described why and how we are planning to convert from a Co-operative to a Community Benefit Society. We explained that we will be issuing a Community Share Offer to support this move. In this post we’ll be explaining what Community Shares are and why you should invest in October Books and your community.
What are Community Shares?
Community shares are a way for individuals to take ownership of community businesses and co-operatives. This is done by providing finance in a flexible, affordable way to help the business develop with the support and input of the community.
Unlike typical business shares, Community Shares are withdrawable shares that cannot be sold, traded, or transferred between members. Shareholders become members of the organisation they invest in.
All members have one vote — regardless of how many shares they hold. This prevents decisions being made solely by those with the most money.
Unlike shares in companies, you don’t get a dividend, but an annual target interest rate if the Board approves it.
Members can only withdraw their shareholding along with any interest accrued if there are sufficient cash reserves for the Board to allow it.
Community shares means everyone can be benefit from the success of October Books. That’s the real secret of community ownership – making the rewards of success something that can be shared with the people who matter the most.
Community Shares Summarised
Community Shares provide a different way of raising capital
Equity
Withdrawable shares, repayable finance
Non-transferable shares, cannot be sold, do not increase in value
Interest bearing
Patient, flexible finance - returns at discretion of the society
Unrestricted funds
Confers democratic ownership
Unregulated by Financial Services & Markets Act 2000
Crowdsourced - average offer has 330 investor members
Understanding The Community Share Offers Market
£155million + has been raised as of 2021 by over 104,203 investors
92% of businesses that have raised capital through community shares are still trading today
85% of businesses say that running a Share offer has had a positive impact on financial performance
Of the organisations that have run a Share offer 36% are planning to run another and 24% already have!
80% of people invest in a community share offer because of the wider social and environmental benefits of the business
Social incentives to invest in Community Shares
80% of community shares investors are primarily motivated by the wider social/environmental benefits of their investment
46% invest to become co-owners of the business
55% of investors earn the average UK annual income or less
What are the risks of Community Shares?
When you invest in Community Shares, your capital is at risk. You could lose some or all of the money you invest. You have no right to compensation from the Financial Services Compensation Scheme, nor any right of complaint to the Financial Ombudsman Service. You should not invest any money you can’t afford to lose.
Why invest in community shares?
Besides the potential financial returns, Community Shares are a chance for you to be the change you want to see in the world and support a business you believe in.
Since 2012, over £155m has been raised by over 104,203 people in community shares across the UK.
Community shares have been invested into over 450 co-operative and community businesses including shops, pubs, renewable energy schemes, housing projects, community hubs and much more.
Examples of Successful Community Businesses
Here’s a list of Community Businesses that have not only raised funds through Community Shares, but thrived as a result of them.
The Old Forge - Community pub in The Knoydart Community
The Crunchy Carrot - Community grocery store on Dunbar High street
The North Kensington Community Energy project
Community Business Shares are the Way Forwards
In short, community shares are a fantastic way for people to invest in, keep running and start up community projects and businesses that they care about. This is a different way of investing that is focused on community engagement, social change and improving the services available to your local community.
We will be launching our share offer in September this year to help us secure the future of October Books and enable us to expand what we can offer to the community and use our position within it to improve all aspects of the local area. The future is exciting and full of possibility. We'd love you to be part of it with us
Next week we’ll be talking about the Community Power Act and what it can do for you!
Questions? Contact us anytime info@octoberbooks.org or visit us in store!
We are open:
Monday - Saturday
10am - 5.30 pm
We are open six days a week, with the whole store open for browsing. We are still taking customer orders and you can still buy food and cleaning products through our online store.
We are able to be open 6 days a week again because of your consideration and care whilst in the shop. Though things are opening up, covid cases are still high and a lot of our staff have only received one jab. So we are asking customers to continue to leave that extra space, sanitise their hands and pull on their mask. We really appreciate it.
