1.4.5 Established social enterprises

A survey by Social Enterprise UK found that the most commonly held objective of social enterprises is community improvement, cited by 25% of respondents. But only a handful of these social enterprises have taken advantage of what community shares have to offer in terms of capital finance and community engagement. Many social enterprises are structured as registered charities or companies limited by guarantee, neither of which can issue share capital. However, as Section 2.6 explains, both types of organisations can be converted into societies without any change to their objectives.

Research commissioned by Power to Change in 2016 estimates there are 7,085 community business in England. The research identifies specific market sectors community businesses are engaged in, some of which are also heavily represented by societies issuing community shares, such as community energy, shops and pubs. It also identifies market sectors where there has been relatively little community shares activity, such as village halls, transport, housing, sports, leisure and libraries, as well as arts centres and facilities, parks, health and social care. These sectors represent an important opportunity for the growth of community shares.

Some of these sectors, notably housing and sports, include many long-established community enterprises that are structured as societies. There are more than 8,000 societies in the UK that are over 10 years old, but only 40 or so of these societies have ever issued significant amounts of withdrawable share capital. This includes over 1,500 societies in the housing sector and more than 400 societies in the sports sector. Very few established societies use the full scope of their corporate form to engage the communities they serve, and it may well be that very few of these societies fully appreciate the capability their corporate form offers for simultaneously raising investment capital and engaging their communities. 

If you have any questions or suggestions for new information you would like to find in the Handbook, contact the team by email at communityshares@uk.coop