deliver sustainable services through asset development - big society & localism - workshop

Marcus Dixon South West Forum Understanding The Big Society

Working With Local Enterprises To Deliver Sustainable Services Through Working With Local Enterprises To Deliver Sustainable Services Through

Asset DevelopmentAsset Development

Strategies

Capability

Finance


Community EnterpriseCommunity Enterprise

Social purpose organisations are a growing business and employment sector contributing over £2.5billion annually to South West economy and around 4% of paid workforce. In some local areas the sectors contribution is proportionally higher.

Recognised that social enterprise is an increasingly attractive sustainable business model for the delivery of public and community services and innovation in the low carbon, environment and the developing sectors


Lyme Regis Development Trust

The Malt House

Education Space

St.Michael'sExtension

Field Studies Centre

The Hub

Children's Centre

Fossil Festival

Community consultation & planning

St.Michael's Business Centre

Affordable Housing

The Library


Asset Development StrategyAsset Development Strategy

•Physical Assets

Assets/Liabilities

•Contractual Assets

Service Delivery/Service Support

•Joint Ventures/Collaboration

•Trading Subsidiaries

•Project Development


Finance

Institutional capacity

Social enterprise

Skill set of staff team

Enterprise Culture

Plan Big Idea

Opportunity


Peter F. Drucker in Innovation and Opportunity:

• “The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”


Finance

•Loans

•Grants

•Equity


Wessex Reinvestment Trust

• Established in 2002 as a Social Enterprise• Community Development Financial Institution• Filling gaps in finance provision in rural areas• Delivering financial inclusion for vulnerable

groups • Creating “blended value”: financial & social

returns• Delivering technical aid


Community asset development in Lyme Regis

• Wessex secured £100,000 grant for Lyme Regis Development Trust from ChangeUp

• Wessex provided £13,000 loan

• Wessex negotiated £35,000 Programme Related Investment from Community Foundation for Bournemouth, Dorset & Poole


High Risk

Low Risk

Pre-planning Piloting/partnership development

Infrastructure

development

Sales

Senior

debt

Grants, donation,

equityGifts in

kind

Mezzanine debt

(unsecured loans)

Source: J.Ludlow, Venturesome


Equity Finance

• Loans (or debt finance) require interest payments and the repayment of the amount borrowed.

• Equity, is investment in exchange for a stake in the organisation, in the form of shares.

• Equity finance can be useful in the early stages of growth or when developing a new product or service. Unlike a loan, investors providing equity finance are effectively sharing the risk with the organisation and are likely to defer any expectation of a financial return for some time.


Raising Equity for Social Enterprises

• If a company undertakes a share issue, the costs of issuing a prospectus are usually very high (at least £50,000) because of the due diligence requirements demanded by the Financial Promotions Regulations. This layer of cost presently exists for all share companies, including Community Interest Companies, seeking investments from the public.


Use of an IPS for raising equity

• However, Industrial & Provident Societies can be exempt from the Financial Promotions Regulations.


Recent community share offers

Share capital £

No. of member

Av. £ per member

The Cochabamba Project 623,003 89 7,000

Sustainable Hockerton 167,550 41 4,100

Ecological Land Co-operative 123,000 38 3,200

Hudswell Community Pub 219,100 151 1,450

Go! Co-operative 58,006 70 830

Motcombe Community Shop 70,000 100 700

Topsham Ales 35,000 55 640

Busy Bee Toyshop Co-operative 32,250 102 300

Fairtraders Co-operative 85,000 370 230

Slaithwaite Co-operative 15,000 121 120

Dunbar Community Bakery 23,000 230 100


Reg'n Date RAISED

Jun-09 £26,450West Oxford Community Renewables Limited

Aug-09 £50,000 Red Brick Building Centre Limited

Oct-09 £5,000 en10ergy limited

Dec-09 £155,000 Exeter Local Food Limited

Mar-10 £88,000 Stockport Hydro Limited

Feb-10 £1,800 Somerset Land for Food

Jul-10 £122,000 The Community Farm

Nov-10 current Buckland Food Growers

8 to date £448,255 raised

Wessex Community Assets: SW Share Issues


Members

Member engagement

Activist

CustomerVolunteer

Investor

Service user

Worker

SupplierDirector

Expert


Contact:

Marcus Dixon

[email protected]

www.lrdt.co.uk

deliver sustainable services through asset development - big society & localism - workshop

Economy & Finance

south west economy

marcus dixon email

community services

community foundation

community farmnov

recent community share

equity finance loans

debt finance