Posted by Sarah Brown on 30 Nov '17
New opportunities - the first charity raises money from a share issue
When Hastings Pier was first launched almost a 150 years ago in 1872 I don’t suppose that anyone could have guessed it would be winning the Stirling Prize for architecture in 2017 as the best building in the UK.
But more interesting to me is the way the community has helped fund the restoration. The Pier had an exciting history but by the 1980’s was in a poor state and finally close in 2008. Local people campaigned to save the pier but everything was put on hold when it was almost totally destroyed by fire in 2010.
The Hastings Pier Charity was set up and bought the Pier for £1 in 2013 from the council who had compulsorily purchased it. However, the plans for redevelopment, which have now won the award, had a total cost of £14.2 million. Heritage Lottery provided the bulk with £11.4 million and other grants and donors raised enough to get the project to within £500K of the total needed but that last bit was critical.
They could, of course, have borrowed it from a bank or social investor but instead they convinced the Charity Commission to let them run a community share scheme where share holders get a very low level of dividend, much less than they would have paid in interest for borrowings.
They are the first charity to do such a thing and over 3,000 people has invested raising £590,000 in six months to finish the pier renovation.
There is a difference between donating and share holding as it means 3000+ local people feel they own the pier and consequently have an active interest in making it a success. It will need continued income and support to pay for maintenance and it needs local people to use it. Using community shares has helped achieve both of these elements and given it the title the people’s pier.
I find this project inspirational because a determined set of local people moved from their £1 purchase to creating a structure which has beaten many contenders to be the best building of the year and raising over £14 million to do it.
What happened next
However the follow on from this illustrates the importance of realism in business planning and the need to think beyond the end of the pier (building) to being sustainable.
Sadly on the 24th November the charity went into administration. It had developed a new three-year business plan based on its experience since opening which it recently showed to key stakeholders: the Heritage Lottery Fund, Hastings Borough Council and East Sussex County Council but this needed an additional grant funding of £800,000 over the next three years to build the Piers capacity as a venue, a visitor attraction and a place where Hastings residents would regularly visit. The charity didn't want to ask the local community for more money and the key stakeholders didn't like the 3 year plan so the charity has been forced to close and adminstrators brought in. I don't know the details but this is a sad ending for such an inspirational project and hopefully will not undermine other charities wanting to go the community share route.
If you want to know more about community shares you can look at these or ring us to chat through your idea to see if it is viable and sustainable. NB they were written before the Hastings Pier Charity broke the mould and showed how charities can use share offerings