Funding schemes are often very competitive. They require a sense of fortitude if one is to go through the process of developing a plan for a project, and then there is the challenge of putting together the application itself. For many smaller community organisations this is often beyond their capacity to manage, both in terms of the research that is needed to identify a project that is aligned with the right funder, and the administrative process that might be required to present a coherent idea of what their funding might be for.
I’ve travelled to Cardiff to hear more about the Community Shares scheme, at an event run by the Wales Cooperative Centre and funded by the National Lottery. The aim of the workshop was to explore how a community media group can use community shares to raise capital for investment as co-owners, and to build members and subscribers who want to engage in a meaningful way with their chosen community group, and so provide a revenue stream based on the services they offer.
Carly McCreesh from Wales-Coop started the session with an introduction to what community shares are about. Carly described them as a ‘way to invest in something that you care about’. Instead of seeking a one of grant to meet the needs of a project, such as upgrading a building, or looking for private investment to support a semi-commercial trading model, the community share ethos is driven by the need for community groups to indecently, and relatively quickly, raise money and invest in assets that are need to run a facility or service that is for social benefit.
This might mean buying a local pub that has been threatened with closure and turning it into a community hub; or it might mean buying land and farming it as a cooperative. The uses that a community share scheme can be put are widespread, and they aren’t determined by the needs of speculative financial investors. Rather, a community shares scheme is funded by the people who want to use a service that is for the benefit of their community and the people within it.
Most community share calls, as Carly explained, are used to secure funding for the purchase of assets and infrastructure. There is also, however, wide scope to use the investment for product and service development, such as taking over a whiskey distillery and creating new products. The success of this investment secure the jobs and the livelihoods of the people producing the whiskey, and the investment stays in the local economy. This is because the investment isn’t driven by financial speculation, but is focussed on making a contribution to the needs of the local economy.
Under the Cooperative and Community Benefit Societies Act of 2014, each person who invests, regardless of how much they invest, will get one vote in the cooperative that runs the project. The ownership structure of the coop, then, is clearly different from that of a traditional private company, which would usually be dominated by shareholders seeking to gain a high-rate of interests, dividend on their investment, and the ability to sell the company for a profit should fortune shine on them. A coop funded by community shares can’t be sold because the shares themselves can’t be transferred.
You might get a bit of interests for your investment, or you might get access to discounts and special offers, but what you are primarily getting for your investment is the feeling that what you have contributed to is making a difference. In a coop decisions are being made by the co-owners and the supporters of the coop, such as the customers or the users of the service they provide. In addition, the workers can be recognised as members of the coop without putting forward any financial investment, as there is provision for the recognition of sweat-labour within the organisation.
Given the need to encourage volunteers, having this formally recognised within the business model, in a positive and inclusive way is very different from many business approaches. As Carly pointed out, if people have assets that are local to them and that they can get involved in the running of, then the future of our communities would look very different.
The rest of the session was presented by Sean Dagan Wood, who is the publisher of Positive News magazine. Sean’s belief is that journalism can’t just be about problems and challenges, but should instead also offer solutions and recognition for those things that work well in society. Balance, according to Sean, is often difficult to find, as the idea of engaging with people in a non-confrontational and responsible way isn’t how newspapers and companies make their profits.
Positive News started by Shauna Crockett-Burrows, who died in 2012. She developed Positive News as a quarterly newspaper that was distributed for free through a network of supporters in the UK, to shine a light on the positive aspects of our lives together, and as a way to counter-balance the anxiety that is created when news is remorselessly negative. After Shauna’s death, however, Sean was faced with the challenge of developing Positive News and establishing a resilient and sustainable business model.
What Sean recognised, was that the greatest asset that he had was the community of supporters who had helped establish and maintain the newspaper for many years. This was something that Sean came to see as the core business asset that enabled him and his colleagues to launch a successful community share offer combined with a crowdfunding approach. This innovation helped Sean to reach the target of £236,000 within three months, which enabled the newspaper to be redesigned and redeveloped as a quality magazine.
For Sean, and the other magazine supporters, this was about developing a co-ownership model that allowed different people, with different levels of interests and commitment, to contribute to the sustainability of the magazine in different ways. Some become co-owners and shareholders, others simply follow the magazine on a news-stand, others follow on social media. Each strand of support has some stability and forms the basis of sustainable income that enables the paper to invest and grow the quality and relevance of its journalism.
And it is this commitment to the quality of the journalism and the type of stories that people tell, that is the driving-force behind the interest in the magazine. In the crowdfunding campaign, Sean recognised it was important to emphasise the unique contribution that readers, subscribers and members can make to the values of quality, independent journalism that became its strongest feature.
The idea of offering community shares was then simply an extension of the values on which the paper had been founded, and that it’s loyal community of readers had themselves emotionally invested in. Positive News is a community of ‘shared intent, that Sean explained was willing to be exploited and used in order to further its own aims. The people who read the magazine, and newspaper before that, would become the most passionate supporters because they believed that the magazine belonged to them.
Sean’s experience had taught him that it is possible to develop an alternative model of business that can be effective, as long as it is based on a direct relationship with the people who are willing to support it. For Sean, the challenges that were overcome show that a community share offer can be successful because it allows people to directly invest in something that they care about, which is based on a shared sense of social concern, which is free from any dominant investors, and which gives a lot s freedom and flexibility in return.
As Sean pointed out, when planning a community shares scheme, its essential to be upfront and open with your supporters about the challenges, but in return the loyalty and commitment of those supporters will return more to the project in the form of commitment, going beyond simply financial commitments, to an emotional commitment that is harder to shake. As Sean said, if we invest in problems, then we also need to invest in solutions.