Interview: Jim Brown

The consultant is leading a Government project to develop community share and bond issues

Jim Brown
Jim Brown

Jim Brown is a man on a mission to harness a new tool in social investment - the community.

He is the lead figure in a government-funded research programme measuring the effectiveness of community share and bond issues. These bring large numbers of community investors together to invest relatively small sums in projects that benefit their communities.

Brown, an independent consultant, is working with the Development Trusts Association, Co-operatives UK and the Social Return on Investment Network to develop best practice in share and bond issues.

"Our project will focus on 10 projects over the next couple of years, and it will also be influenced by the wider work we're doing at the moment," says Brown. "We will look at the methods they use, the problems they encounter and the successes they have."

Community share and bond issues have been used by several dozen projects in the past decade, with many investors putting in less than £50 each. One example is the creation of a wind farm funded by networks of environmentally active people.

Brown says community investment is a powerful tool for harnessing unused social and financial resources.

"Social enterprises have found investment from a number of sources, but the main ones so far have typically been high net worth individuals and loan funds," he says.

"This is the other end of the scale. It's getting communities involved in the real ownership and use of services.

"Projects that have used this type of funding so far have received massive interest."

Most projects constitute themselves as industrial and provident societies, which can issue shares, but limit the control any one shareholder can have over a project, says Brown.

After the market failures of the past few months, there is an appetite among people to invest in something solid, he says.

"There are lots of examples of communities rescuing the last shop in the village or the local pub," he says. "When it uses an investment model, where people have this sense of ownership, they are committed to the success of the enterprise."

Topics:
Finance

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