This new 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.
Community-led projects have the power to transform local areas socially, economically and environmentally. This report, created with support from the Greater London Authority, explores the opportunities and challenges to using investment crowdfunding models (eg community shares and bonds) to fund community-led projects. It also provides a how-to guide to community organisations interested in raising funds through investment crowdfunding and explains what institutions, such as local government, city authorities and foundations, can do to help community-led initiatives make the most of these tools.
- 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; and
- 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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