Funding from the community

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Sourcing funding from your community, rather than external institutions and organisations, can help to directly connect people with what you are doing and gives them a stake in the outcome. Not only is this a key means of engagement, but also a logical step where your project is intended to be run by and for the benefit of the community. This can involve participation from communities of interest, as well as your immediate geographic community.

Click on the ideas below for practical suggestions and detailed case studies.

Selling shares

Selling shares is a common and effective way to raise money to fund the activities of community energy projects. Not only can this means of fundraising enable large amounts of money to be raised from a wide range of people, but it can also encourage local people to take ownership of the project and have a stake in the outcome – literally!


In order to raise money through selling shares, you will need to consider the following:


Legal structure and project plan. The right legal structure and a well-thought-out project are essential prerequisites for developing a share offer. Selling shares is only possible if your legal structure allows it, and without a project plan, you will have nothing to persuade people to invest in! You will also need to develop a sound financial model in order to communicate the investment potential and likely returns from your project. This will require consideration of expected revenues and costs, and their implications for cash flow and profit and loss. Assistance from an accountant or other financial expert at this stage is likely to be invaluable. Given that developing a project plan can be a costly and time-consuming business, some community projects have sought start-up capital through a pioneer share offer to support this work.


Gauging interest and testing the offer. Once you have an appropriate legal structure, project plan and financial model, it is worth assessing local interest in investing before launching your share offer. This will enable you to review the attractiveness of your offer and how much money you are likely to raise, which in turn will help to determine whether you are ready to launch your offer and if any changes need to be made. Such an assessment could be carried out by keeping a record of potentially interested people, through a database or a pledges scheme, or by carrying out research through surveys or questionnaires.


Developing the share offer. Next you will need to prepare a share offer document, which is similar to a business plan, setting out the business case for the project and the details of membership. The business case needs to be credible and evidence-based – make sure you scrutinise your financial model and assumptions to check your figures are as accurate as possible. It could be worth seeking professional advice and assistance to help with this. Be honest and realistic – although small returns are not as attractive as big profits, it is likely that there will be people within your community who are not primarily motivated by financial returns in any case.


Your community are likely to be more attracted to invest if the share offer is structured to focus on social and environmental benefits, rather than financial returns. Income generated from your project could be used to promote social and environmental benefits through supporting a specific activity of a particular organisation, or through creating a pot of money which members of the community can apply for funding from. The value of your shares and the minimum number people are required to purchase will determine how inclusive your project is and the range of people who can become involved - it is worth trying to set the threshold low to ensure no one is prevented from becoming a member who might want to.


Marketing and publicity. Major share offers will need a serious publicity campaign to raise the sums of money desired. This goes beyond promotion of the share offer document – you will want to consider running events and public meetings, seeking publicity through the press, radio and TV, and producing your own marketing materials in the form of banners, posters and via online channels. You may want to seek support from marketing professionals and designers at this stage – if you can recruit someone with these skills to provide voluntary support, then even better!

Case Studies
Country: UK

Resilient Energy Great Dunkiln (REGD) is a joint venture between The Resilience Centre, a landowner and the community of St Briavels. Together they raised £1.4 million in five months to install a 500kW wind turbine in 2012 in the parish of St Briavels. The funding target was met using a crowdfunding process developed by REGD and Abundance Generation; share offers started from as little as £5 to £50,000 and the return on investment is expected to typically deliver between 7 and 8 percent annually over 20 years. 

As well as the inclusive minimum share offer the project committed to an annual community donation of £15,000 - £20,000 over 20 years. The calculation of monies going to the fund is transparent and based on 4 percent of turnover, not surplus, so is linked to total energy generated and revenue. The community fund’s purpose is to help the local area meet its current and future needs; applicants to the fund must demonstrate how they will make the village more resilient.

The community donation is administered by a rolling panel made up of locals from all sectors within the community who are separate from the primary stakeholders. Local people and organisations can write in twice a year to the fund requesting a grant demonstrating how they intend to use the money and over what period. With minimal red tape, applications are discussed and debated by the panel based on how closely they meet the criteria detailed above. Beneficiaries include a local charity helping to provide suitable accommodation for the elderly, the creation of a local handyman service, maintaining the availability of the publicly accessible village defibrillators and helping the local playgroup to replace and upgrade their equipment. 

Country: UK

Gamlingay Community Turbine use income from their community-owned wind turbine to provide a long-term income stream to support environmentally friendly projects for the benefit of the whole community. They give 10% of the net income, after all running costs, to a community fund. Applications for funding are open to any individual or organisation within the Parish of Gamlingay and should benefit more than just a single person or family, and preferable result in an environmental benefit. No more than two applications can be submitted by any particular individual or organisation within one year, and a maximum grant of £3,000 on any single application will be awarded, but all applications are welcome and will be considered equally, however small.

Country: UK

Sustainable Charlbury aim to ensure that the whole community benefits from their project, rather than just those individuals who are able to buy shares. They do this by encouraging groups such as the Charlbury School Association to pool their smaller individual sums to buy shares collectively. In addition, they focused the returns on benefiting the community by limiting the financial returns to shareholders to no more than 5%, which would enable them to generate a community benefit  of up to £100,000 a year. The community will be consulted on how this money should be used, and they are committed to spending the money to further Sustainable Charlbury’s mission of reducing carbon emissions.

Country: UK

Brighton Energy Co-operative launched a pioneer share offer in order to raise the cash required to get the ball rolling to take their community-owned solar PV project forward. The costs of setting up the organisation, in terms of printing, hall hires, web support, branding, were all starting to add up and were only going to grow, and so the pioneer share offer would provide much needed start-up capital. To support the pioneer offer, they wrote a business plan detailing where the organisation was heading, how it would get there and how much this would cost. They then had to market the pioneer offer - the team organised a public meeting, both to update people on how things were progressing and where the organisation had got to, and circulated their plans to their mailing list. At the public meeting they went through details of the business plan and outlined the money they required. Over the course of the next few months, the team also held one-to-one meetings with local people who had expressed an interest in joining and investing in the project. At this stage it was fundamental for the team and the project idea to remain credible, so they intensively rehearsed all presentations as well as answers to potential questions, with each director being allocated specific subject areas. Eight people subsequently bought shares, and they successfully raised £18,000.

Source: Community-Led Photovoltaic Initiatives action pack

Country: UK

Brighton Energy Co-operative have a pledge scheme on their website to keep a record of those who are interested in investing in their community-owned solar PV projects. Before their first public share offer, the pledge scheme was used to enable anyone interested in becoming a shareholder to pledge the amount they would like to invest and to send the group their contact details. Over a few months the group had more than £100,000 pledged – and hence an excellent list of potential members when the time came to launch their share offer.

Selling a product or service

If your project involves provision of a product or service, sales are likely to provide your core source of funding in the long run. Ideally, you should plan for your project to be funded from sales alone once you are up and running, and the sooner you can create a sustainable funding model based on sales, the more secure your project will be and the easier it will be to plan future activities.


When planning to sell a product or service, it is useful to consider:


Market position. Positioning your product or service to determine an appropriate price, type of product, level of service and target market is crucial to ensure a sustainable funding model. Determining whether the product or service you are selling is high-end, budget, or somewhere in the middle will help to make sure you don’t set too high or low a price, and appropriately match the budgets and preferences of your customers. It will also be useful to consider the prices and products provided by key competitors, and to carry out some form of market research to better get to know your target market. See the Community-Led Transport Initiatives action pack for more tips on positioning.


Where and how to sell. The practicalities of where and how you sell will affect the accessibility of your product or service, and in turn who your customers are and how many you attract. You need to decide whether you are going to sell directly to your customers or through a partnership with an external funder, provider or retailer. There are also a wide range of payment methods to consider, ranging from cash, cheques, direct debit and standing order, to PayPal and in exchange for time spent volunteering.


In terms of where you sell, you will need to decide if you require your own retail outlet or distribution centre or whether you could arrange to share the premises of another organisation. Alternatively, you may want to sell online, in which case you will need to consider arrangements for delivery or collection. The more options you are able to provide and the more flexible you can be, the more people you will attract to buy your product or service. Having extra incentives, offers and discounts to encourage, for example, bulk purchases or the signing up of new customers, can also help to boost sales.


Advertising. Good use of advertising is key to maximising your sales – if no one knows about your product or service, no one will purchase it!

Case Studies
Country: UK

The Big Lemon started out by charging an annual membership fee for use of their community bus service, and sold a range of different ticket types to their members from a number of different types of outlet. They sold daily and weekly tickets directly on the bus, six-journey passes in university campus shops, and three month and twelve month passes online.  Paying daily on the bus was the most expensive option, and then the more passengers were willing to commit the cheaper the deal became.  The company also took advantage of cross-selling opportunities; for example selling coach tickets to music festivals to the student audience already using the bus services, and private coach hire services to the student clubs and societies. Now, with their new model, the bulk of The Big Lemon’s business is not sold directly to the passenger but instead the company provides bus services on behalf of both the University of Brighton and Brighton & Hove City Council.  This is more secure and enables better planning, as revenues are guaranteed as long as the service is provided as contracted.  The downside is that there is less freedom, but in reality they found it was still possible to run the service in their own style so it was a small price to pay and well worth it. In the case of The Big Lemon’s services for University of Brighton students and staff, funding from the University allows the company to operate the service free at the point of use.  This significantly increases take-up and allows The Big Lemon to better fulfil their aims in terms of reducing the number of car journeys and thereby reducing energy use, pollution and CO2 emissions.

Source: Community-Led Transport Initiatives action pack

Country: UK

Stroudco Food Hub originally set out to market low-cost local food to people on the estate around the local school where the Food Hub is based. They started by trying to gain members through holding stalls at school fairs, and encouraging people to sign up by offering a free bottle of beer and deals for free membership.  Lots of people joined, but no one started ordering anything! Eventually they accepted that the households they were targeting were not going to embrace the idea, and so broadened their marketing to the whole of Stroud. To market the Food Hub, they produced a video, published press releases in local newspapers, ran a leafleting campaign, used social media, and sent emails and texts to members each week. They also secured funding for a marketing development worker to provide support for one day per month, and signed up volunteers who run their own creative design agency. This had a big impact on increasing membership. As part of the broadening of their marketing they decided to reduce the emphasis on affordability and now target Waitrose shoppers with the message that Stroudco is the only Stroud retail outlet for many of the artisan products they offer. 

Country: UK

The Big Lemon initially positioned its community bus service at the budget end of the market, and was very successful at growing market share amongst price-conscious students. However, this was later noticed by the major competitor, who responded by cutting their fares on routes competing with The Big Lemon.  The Big Lemon had to change, and change quickly.  A price-war was out of the question, as the competitors had deeper pockets and would be able to run loss-making services for longer.  After a lot of experimenting and a very difficult year, The Big Lemon stabilised its services with a slightly different model, and revised its positioning.  Now the company runs services on contract to the University of Brighton and to Brighton & Hove City Council, and has positioned itself closer to the middle of the spectrum because that is where the demand is from the funding partners.

Source: Community-Led Transport Initiatives action pack

Membership fees

Membership fees can provide a good source of regular income and can enable a similar feeling of ownership as selling shares, without having to share profits with those that buy into your organisation. This option is likely to be most appropriate when people will have regular contact or involvement with your project and will be getting something in return for their fee.


Developing a membership offer involves consideration of the following:


Meaning of membership. The first and most important step is to decide what people will get in return for their membership fee. The benefits of membership could involve, for example, the ability to purchase products and services, free access to events and resources, or entitlement to discounts and offers. Members could also be given governance and decision making rights.


Membership fee. Once you have an idea of what the benefits of membership are and what you are offering people, it will be easier to calculate a fee to charge for membership. The fee needs to be both attractive for the community, but also financially viable and beneficial for your project. You may want to consider offering concessions for those on low incomes or for group memberships, and incentives for joining or renewal.


Management of members. You will need to consider what the process will be for applying to be a member and for renewing memberships, and the details that must be provided in order to register. Having an application form which requires provision of basic contact details is a good place to start, and developing a database or spreadsheet to record members’ details will help to keep track of who has signed up. It is a good idea to arrange to have regular communications with your members through, for example, email updates, newsletters or open meetings. This will help members to feel more valued and part of your organisation. You could also develop a membership pack for new members to provide an introduction to the organisation and to explain the membership offer to ensure they get the most out of being a member.

Case Studies
Country: UK

Stroud Community Agriculture charge £2 per month for membership, which covers administrative costs of running their co-operative. Members can then choose to buy a veg share on top of this, which goes towards supporting the running of their community supported farm and the production of the veg. Members of low incomes can ask for a bursary when they join. There is no means testing for this – if someone asks for a bursary, they can get a reduction on their membership fee of £1 per month and the veg share can be discounted by up to 20% on request. Any larger reduction has to be approved by the core group. Bursaries are funded through members who choose to pay more than the standard charges per month, and through the organisation donating 1% of its turnover every year into the bursary fund. There is also the option of volunteering or working on the farm in exchange for membership as an alternative to paying the fees.

Source: The Story of Community Supported Agriculture in Stroud

Fundraising events and activities

Fundraising events and activities are best suited for collecting small amounts of money, and can work especially well if it is for a specific action with an achievable target to reach, such as for the purchase of materials or a particular piece of equipment for your project – people like to see where their money is going! From sponsored walks, to skill swap auctions and competitions, there are lots of different options to consider. It is easy to turn any event into a fundraising opportunity by asking for donations to attend or by incorporating activities such as raffles, cake sales or just more general calls for donations or support.


You could expand and connect these fundraising activities by making them part of a wider drive to raise money through crowdfunding. Crowdfunding involves starting a time-limited online campaign to raise money against a set target, enabling money to be pledged in small amounts from lots of different people. This could potentially generate more energy and excitement around your fundraising activities, and allows you to use existing websites as a platform for recording and collecting donations and offers of support. There are many website to choose from, some of the most popular being indiegogo.com, crowdfunder.co.uk, buzzbnk.org and kickstarter.com. Further crowdfunding finance options for the community energy sector are offered by organisations such as Abundance Generation.

Case Studies
Country: UK

Stroud Community Agriculture carry out informal fundraising activities as and when they need to raise money at different stages of their project. They have used public meetings as a way to invite people to donate money, for example by putting up big blank posters where people could record their offers of support and having contact forms for people to fill in to donate money. At their first public meeting they secured pledges for over £200 by these means. They also approach their members for financial support to purchase particular pieces of equipment, and have a box to tick on their joining form if people want to help by providing a loan or making a gift to the project.

Source: The Story of Community Supported Agriculture in Stroud

Country: UK

Hampshire Energy’s fundraising walk offered the opportunity to meet people involved with the project whilst raising money for the cooperative. A choice of circular routes was offered, of 4, 7 and 9 miles in length, all starting from the same meeting point. The cost of participating was set at £8, and this included a drink and BBQ. Participants were encouraged to get their friends and family to sponsor them, and those who couldn’t make it or didn’t fancy it were invited to sponsor the team online via their BT donate page – they had an ambitious target to raise £1000!