Community investment handbook for co-operatives launched

22 November 2016

Co-operatives have played a key role in many Australian communities for more than one hundred years. Their popularity began in rural communities when agricultural producers combined their efforts to process and market their products economically.  Today, co-operatives exist in all sectors of the Australian economy contributing 7% to the country’s GDP (including superannuation funds) and an immeasurable amount of social and economic benefit to the not-for-profit sector and the communities they serve.

Access to capital has always been a hurdle for the growth of the co-operative sector, partly as a result of what is seen as a ‘traditional financial operating method’ and because co-operatives tend to sit outside financial markets. Co-operative shares are not tradeable on financial markets, and other securities are generally not used for financing.

Read: Handbook on Community Investment in Co-operatives

Download: Community investment for Australian co-operatives: A Handbook

To counter this hurdle, the BCCM have published  self-help manual to assist communities around Australia to use the co-operative model to raise capital. Community investment for Australian co-operatives: A Handbook has been developed to introduce communities and existing co-operatives to methods of financing for co-operatives and to demonstrate that co-operative shares, despite their unique characteristics, are flexible capital instruments, ideally suited to community enterprises.

The handbook is divided into five sections:

• Part one looks at the concept and potential of community investment as a fundraising model, and examines the potential of crowdfunding and its availability as a tool for the promotion of community investment.
• Part two examines the different types of co-operative under Australian law and identifies factors in each type that may influence a community’s journey to decide the design of an appropriate business model. It also deals briefly with the process of forming a co-operative, but more particularly with the Australian regulatory requirements for active membership.
• Part three explains the characteristics, restrictions and flexibility of different types of co-operative securities and their classification as either equity or debt.
• Part four provides a guide to the disclosure requirements for co-operative securities under the co-operatives national law.
• Part five contains some examples and additional resources.