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April 9, 2014

What price the feel good factor?

Community share issues are generally presented as an opportunity to make a social investment which investors can feel good about rather than view as a means of making a profit. But with bank interest rates remaining at record low levels, community shares are proving a popular alternative for many investors.  Which is fine just now but if bank rates start to creep back up, the ‘social commitment’ of these investors is going to be tested to the full. DTAS is heading a programme which it hopes will see this market grow significantly in the years ahead.




The delivery plan for Community Shares Scotland

The delivery plan is based on our experience in Scotland as a community development and enterprise support agency and the experience of our partners on delivering community shares as a product across the UK. It takes account of the fact that we can construct a rough typology of organisations:

•             Those who already have an idea and some capacity and are already thinking about or considering raising capital;

•             Those who are members of existing support networks but who do not yet have an idea suitable for community shares;

•             Those who have the potential for developing community shares but are not well connected to existing networks.

The delivery plan will have the following elements.

1. Awareness raising

This will have three components.

First we will develop a broad based approach (beyond our existing networks) to general awareness raising in order to stimulate interest from groups and communities across Scotland. This will be done through a series of nine roadshows, some of which may be thematic.

We will work with local development agencies/intermediaries (e.g. HISEZ, Community Energy Scotland, Community Woodlands Association, Community Recycling Network and the social enterprise networks) as well as our own networks, along with local/national/social media campaigns, to create interest.

Second, we will offer six masterclass events aimed at upskilling existing community support staff and other professionals/intermediaries .These events will be more detailed and practical and will have as an objective increasing knowledge and skills within these organisations, thus creating an enduring legacy of expertise

Third, we will offer to present and deliver nine workshops at national events and conferences organised by third sector intermediary bodies, support organisations, and other relevant parties.

These will all be linked to, and underpinned by, the web site which will have follow up information, a FAQ facility and a quarterly newsletter alongside a range of online resources.

2. Information and advice service

The second element will be an information and advice service, which will be a central point of contact through which individuals and organisations can:

•             Register an interest in community shares;

•             Find out about documents and guides to community shares;

•             Find out about similar organisations and best practice;

•             Register for advice and support;

•             Be signposted to other, either intensive, or more appropriate, support.

It will be based at DTAS in Edinburgh with a dedicated telephone number and an ‘Advice Line’ Service. This service will have access to support and information from the CSU.

The service will also be linked to what is available on the website in terms of:

•             Technical guidance documents;

•             ‘How to’ guides and other factsheets;

•             A database of Scottish community share issues;

•             Case studies;

•             Information about events and networks;

•             An online enquiry form.

3. Training advisors

In addition to general awareness raising and introductory training provided by the programme, the Community Shares Unit will design and deliver a package of comprehensive training to social enterprise advisors to become specialist supporters in all aspects of advising community enterprises about raising equity finance through community share issues. 

It is proposed that this training is delivered over the first year and a half of the programme to a cohort of 6-8 advisors.

Based on the best practice guidelines emerging from the Community Shares Handbook this training course will be delivered through six modules plus individual tuition sessions and final accreditation for participants. These modules will cover:  

•             Legal considerations around the formation of Community Benefit Societies including conversion from or operating alongside other legal forms;

•             Community support building for community share offers;

•             Timing and content of share offer documents/harmonisation with business plans;

•             Identification and monitoring of appropriate community benefits;

•             Promotion and marketing of share offers including the use of ‘crowd funding’ platforms and other forms of social media;

•             Post share issue best practice for Community Benefit Societies and their members, including reporting wider community benefits and managing ‘withdrawability’/liquidity issues.

4. Direct support

Direct support from trained advisors will take a different form at different development stages. Organisations who seek to be assessed for and offered direct support will come through two routes. Some will be self-referrals who either have an idea and broadly know what support they need, or who are looking for guidance on what support would be appropriate. Others will be referred by intermediaries (including intermediaries and individuals with a specialist knowledge of co-operatives).

We anticipate that not all organisations/communities seeking support will be eligible for this, and we will develop criteria with the steering group to ‘sift’ applicants into:

•             those who should access direct support as part of the programme;

•             those who need to do more work before they can access support; and

•             those who are either ineligible or who have projects that it would be inappropriate to support (who will be signposted to an appropriate support organisation).

Direct support will be either generic or specialist and be for between two and six days duration. Clients/organisations will be either matched with an existing member of consortium staff with the relevant skills/experience or to a specialist advisor from our list of associates after assessment of their outline business plan/proposition.

Direct support will be designed to help communities be in a position to articulate and decide whether to launch a community shares issue within six months of engagement. This will include promoting the share issue, legal documentation, and governance issues.

Direct support will focus on:

•             Tailoring model rules;

•             Business plan analysis;

•             Financial planning;

•             Articulating the share offer;

•             Marketing the share offer;

•             Legal and technical support;

•             Tax advice.

5. Covering Scotland

Our events and awareness raising programme will take place in all parts of Scotland. Our own membership and networks are already Scotland wide. DTAS has over 200 members in all local authority areas. We have robust working relationships with a number of sector leaders with national coverage (Community Woodlands Association, Community Energy Scotland, Community Resource Network Scotland, Scottish Community Alliance, Community Ownership and Support Service (COSS)) and prior to the award of the contract will build on our existing strong relationships with:

•             Scottish Council Voluntary Organisations;

•             Co-operative Development Scotland;

•             Community Energy Scotland

•             Social Enterprise Scotland;

•             Scottish Community Alliance;

•             Federation of City Farms & Community Gardens

•             Rural Housing Scotland

•             Social Enterprise Academy;

•             Third Sector Interfaces;

•             HISEZ;

•             Social Enterprise Networks;

•             Other co-operative networks covering Scotland.

6. Learning and networking

In order to make sure that we capture the lessons of the programme, DTAS will convene an expert reference group to inform and guide the development of the Community Shares programme in Scotland

This expert reference group will comprise the Scottish Lottery, specialist social enterprise supporters, social investment specialist funders, representatives from Scottish Government, the Community Shares Unit in England and other interested parties in the development of the market for Community Shares in Scotland.

It is envisaged this group will have 8-10 members and meet twice a year to:

•             Share best practice information including learning from developments in other parts of the UK and internationally;

•             Discuss challenges and issues that emerge during the roll out of the programme;

•             Discuss problems and issues that may emerge in relation to specific sectors or business models in relation to raising equity finance through community share issues; 

•             Help plan communication, training and development events to support the Community Shares Scotland programme;

•             Feed into the evaluation of the programme especially through the identification of suitable case studies and helping capture elements of the wider community benefits arising from community share issues;

•             Help frame recommendations to Scottish Government, specialist social investors and others to maximise policy synergies and the sustainable impact of the programme in Scotland.

The group will hold two learning network meetings each year to showcase good practice and discuss common issues.

In addition, we will have a fund of £5K each year for visits and networking events in communities. We will also have 10K available for specialist legal advice.