Taking Ownership: Community empowerment through crowdfunded investment

The Gathering 2018

Year of publication
2019
Author
Rosalyn Old, Jonathan Bone, Dave Boyle and Peter Baeck
Abstract

Community-led projects have the power to transform local areas socially, economically and environmentally. This report explores how investment crowdfunding models can be used to fund projects which are owned and run by
the communities they serve, enabling community-led regeneration and boosting local resilience.

Chapter 1 describes what is meant by crowdfunding community investment, with an outline of the variety of projects which can be supported – from pubs to community gardens – and its five elements (project, community, investment model, sustainability business plan and governance model), before giving an overview of the crowdfunding process and the main financial and governance models available to community groups.

Chapter 2 provides a ‘how-to’ guide for community organisations interested in raising funds through crowdfunding community investment, with guidance on choosing a financial and governance model to suit the project context, through analysis of the pros and cons of a range of options.

Chapter 3 uses insights from interviews with community projects and institutions to identify and provide an analysis of the main opportunities and challenges for community investment, governance and ownership.

Chapter 4 shares examples of the roles that institutions such as local government, city authorities and foundations can have in supporting community groups undertaking such projects, to enable the biggest social impact.

Key Findings

Investment crowdfunding has been used to fund a broad range of local assets, including but not limited to, saving local shops and pubs from closure, creating new community centres and art spaces, and expanding leisure facilities and infrastructure projects.

Potential opportunities in using investment crowdfunding for community-led initiatives include helping to fund projects that would otherwise struggle to access finance elsewhere, increasing the use of and volunteering for community initiatives, and strengthening local resilience and self-determination by bringing communities together to improve their area.

The main challenges for community organisations raising money in this way include gaining access to assets to buy or use on a temporary basis, transitioning from grassroots fundraising to implementing a project and avoiding negative impacts on diversity and inclusion.

Local government, city authorities and institutional funders have a crucial role to play in supporting community organisations to make the most of opportunities and overcome the challenges mentioned above by offering flexible funding options (including grants, bridging loans and co-investment), helping them access space by easing the asset-transfer process and supporting meanwhile use, developing active communities and their relationship with local and city government, and investing in skills and capacity building.

 
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