You have hopefully heard us talking about our community share offer for months, and perhaps you have been intrigued (we very much hope so). For those unfamiliar with exactly what a share offer is, we have put together this quick guide that we’re hoping will give you everything you need to say ‘yes’ to investing.
What is a community share offer?
A community share offer is specific to co-operatives and community benefit societies, like us, and is a way of raising money for a project that we believe will benefit the community. This process can be used to fund anything from shops, pubs, piers, community halls, to renewable energy developments, care homes and youth clubs.
Community shares are bought directly from the society that’s offering them, i.e. us! So, you’re putting your money directly into your desired cause. Think impact investment, but on a very local scale. If you’re keen to see your money have a social and environmental impact, where better than in your community?
When you are ready to cash in your shares, the society repays the money you invested with added interest (all being well). This is usually subject to a notice period and other restrictions, which are all stated in a very detailed offer document which we have been busy producing behind the scenes.
Our share offer document (available soon) contains all of the details of the offer, including the minimum and maximum amounts you can invest, risks, and details on how we use your money. Here is a video about how they work from the Community Shares Unit if you want to know more.
How will CREW use your money?
Your investment will be used to finance the upfront capital costs for air source heat pumps to be installed at Devas Club youth centre in Battersea. Founded in 1884, this fantastic club is rather special as not only does it provide very 21st-century opportunities for young people around vocational training, support for carers, mental health and literacy, it currently has record levels of 200 members, swelling to 400 engaging with its activities. The packed programme features everything from dance through to life skills and is often involved in partnership projects in the local area. Always trying to reduce overhead costs, like any charity or youth club, Devas uses freed-up funds to keep adding to their scheduled activities. CREW Energy are pleased to be in the position to help them reap the benefits of a 21st-century heating solution via installation and running of an air-source heat pump, a low carbon, proven technology to replace oil or gas boilers, or furnaces.
In return for the investment, CREW will receive the Renewable Heat Incentive (RHI) subsidy and a heat charge from Devas Club. This revenue stream will allow us to pay back you, our investors, with our targeted 3% annual interest premium.
This funding will help us reduce the carbon footprint of our community, save Devas Club money on its running costs and allow us to invest in climate education and outreach for the next generation. It is also the first urban community energy heat pump project; join us and be an eco-pioneer.
What are the benefits?
There are three main benefits:
What are the risks?
Buying any type of shares involves risk. It is important to remember that this is a social investment and not a financial investment, so there are no guarantees. Our well-researched and conservative financial model shows how we plan to make a profit; our projections show we will be able to pay you interest on your shares, but we are not underwritten by the FCA. We are standing on the shoulders of many community energy share offers that have gone before us, many in London with our fellow Community Energy London members such as South East London Community Energy and Repowering London. The first ever community share offer ran in 1997 and Community Energy England calculated that £34.8 million was raised in 2019 alone.
Community shares can’t go up in value, but they can go down if the society is making losses. As a shareholder you could lose some or all of the money you invest. You should only take these risks with money you can afford to lose.
What to think about before you invest in community shares
You should have a thorough read through of our share offer document before you make any decisions. We’ll be making it available on our website very soon. In the meantime you can ask us any initial, burning questions via email, Facebook, LinkedIn or Twitter. Our shares will be available for values of £250-£5,000. We chose to cap it at these levels so we can afford to offer service to new investor members while also having a spread of investors. We wouldn’t want anyone to invest who could not afford to have money tied up for 3 or more years.
You could read what Cooperatives UK and the FCA, who established the Community Shares Unit, have to say about them or at the AGM minutes of other Community Energy groups who have held community share offers. Maybe ask friends and family if they have ever invested in a community share offer. You could have a look on social media what others have to say about them or just tell us to hurry up and publish our community share offer document; we will be delighted to know we have at least piqued your interest.