Many Community Members are interested in the social benefit created from their contribution. However they may also receive an individual benefit: a reward in return for a donation or a community share in return for an investment. As with most financial transactions, there are risks as well as the chance of social and individual benefits.

All Community Members should note that because does not facilitate any offers regulated by the Financial Conduct Authority, that it is not regulated or authorised by that body. Community Members will not have recourse to the protections offered by the Financial Ombudsman Service or the Financial Services Compensation Scheme.

The fact that an offer is listed on the site does not mean that is endorsing or recommend it. It is for Community Members to assess whether they have enough information to make a judgement about the offer. If you are unsure about whether a particular offer on this website is right for you, you may wish to seek advice from a financial adviser.

Below we have set out some key risks to be aware of when investing in a community shares project:

Community Shares

When you invest in a Co-operative Society or Community Benefit Society through, you receive a withdrawable share in that society, known as a community share. These societies must be registered with the Financial Conduct Authority but the sale of the shares is not regulated.

Unlike company shares, co-operative and community benefit society shares cannot go up in value but they can go down, meaning that you could lose some or all of the money you invest.

Community shares cannot be sold or transferred to someone else. The only way in which your investment can be returned to you is if the shares are withdrawn (i.e. you get your money back, along with any interest which may have been paid).

Withdrawal rights are subject to the terms and conditions of the society concerned. As a result you may want to check the T&Cs for any restrictions such as the length of time before a withdrawal can be made, any notice periods that apply and any right of veto available to the directors.

It may also be worth checking where the money to cover withdrawals will come from.

If the offer plans to give financial returns to investors while the community shares are held, it is worth looking at whether this would be viable. Is there evidence that the venture will make sufficient surpluses to pay you the financial returns it is offering? Are the team behind the enterprise the right people to be taking this forward?