Funding boost for new Democratic Finance Programme will fuel financially resilient communities
An ambitious new programme which aims to build fairer and more resilient local economies that work better for local people has been boosted with a £400k grant from the Esmé Fairbairn Foundation.
Scottish Communities Finance Ltd and Development Trusts Association Scotland (DTAS) have joined forces to create the Democratic Finance Scotland programme, which will support communities to be ‘agents of change’ by unlocking local wealth and control through democratic finance sources and tools.
Democratic Finance Scotland was launched at the recent DTAS conference in Glasgow and just been awarded the 3-year grant by Esmé Fairbairn Foundation, which will go towards project costs.
The launch of the Democratic Finance Scotland programme reflects a growing appetite for Inclusive and Democratic Business Models (IDBMs). A recent report, Developing Scotland’s Economy, produced in partnership with The Scottish Government has set a target to triple the number of social enterprises, cooperatives, employee-owned businesses and similar models in the Scottish economy by 2034, representing a shift from around 7000 to around 21,000.
Worldwide, over 280 million people (around 10% of the world’s working population) are employed by IDBMs, with the largest 300 of these reporting a combined turnover of over $2.4 trillion.
The team at Democratic Finance Scotland will provide practical, hands-on support to democratic, community led organisations to build their financial resilience and control. Support will be offered to explore other local, citizen driven sources of income such as community shares, community bonds, one off community lotteries and grass roots legacy giving.
There will also be a focus on funding and investment opportunities from the renewables transition which prioritises the economic resilience of local communities.
Morven Lyon, Head of Democratic Finance at DTA Scotland said; “It is abundantly clear that there is an uneven distribution of wealth within Scotland’s communities. The communities we support are crying out for more financial resilience and power, to allow them to take ownership of important community assets and run successful, democratic, community-controlled businesses.
We believe the key to this is supporting community led organisations to access a more diverse range of local sources of money – what we have termed ‘democratic finance’. Whether is it community shares, community bonds, one-off lotteries, local legacies, or the many financial opportunities from the renewables transition – democratic finance allows them to move away from piecemeal grant funding towards more sustainable economic resilience rooted in local control and democratic accountability.”
Pauline Hinchion, Director, Democratic Finance at Scottish Communities Finance Ltd commented; “The Democratic Finance Scotland programme is rooted in the principle that communities can act independently on their own behalf as ‘Agents of Change’, to build local economies that work for everyone”. It’s about securing local investment from within a community, that can be invested into democratically controlled organisations. It’s about encouraging people to be ‘citizen investors’, moving some of their money from a passive state in the bank to a proactive source of local investment”
Democratic finance models in Scotland have raised over £20million from 18,000 citizen investors over the last 10years by using community shares and community bonds. These funds have been used to finance a host of community and social enterprises including shops, pubs, community hubs, community renewable energy, arts, tourism and sports initiatives.
The 3-year £1.34million Democratic Finance Scotland Programme will expand the range of tools and sources of local finance, supporting more communities to understand and utilise all the available democratic finance methods to realise their community aspirations.
Further information about Democratic Finance Scotland can be found at Democratic Finance Scotland.