Good returns: your savings can help homeless people – and earn you 5%

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Gerry McFarlane lived on the streets of Portsmouth, Glasgow and Edinburgh for years, sleeping rough because his alcohol addiction meant night shelters often wouldn’t accommodate him.

He was typical of a section of the street homeless population sometimes designated as “unsuitable” or too challenging – but help provided by a charity has transformed his fortunes. McFarlane is now living in supported accommodation, enjoys good mental and physical health, is drinking less and finally has a place he knows is his home for life.

The Edinburgh property where he lives is home to 12 men aged 50-plus who had previously been on the street or at risk of homelessness. A scheme has been launched that aims to replicate this successful housing model and individuals across the UK are being invited to become part of the solution to tackling homelessness by investing in the project.

Those who invest in the project could earn 5% interest a year, which far exceeds what a typical savings account pays

“It’s win-win,” says Helen Carlin, who is the founder of Common Ground Against Homelessness (CGAH), the not-for-profit organisation behind the scheme, and the chief executive of the homelessness charity Rowan Alba, which runs the original property where McFarlane lives.

Those who invest their money in the project could earn 5% interest a year, which far exceeds what a typical savings account currently pays.

The CGAH share offer – available via the ethical investment platform Ethex – involves putting your money into so-called withdrawable shares, which are mostly offered by cooperatives and community benefit societies.

They are not traded on the stock market and typically do not increase in value but will often pay interest. Their sale is not regulated by the Financial Conduct Authority because investors are deemed to be investing for “social returns”, not financial gain.

This scheme aims to raise £650,000 by the end of this year. The money will help finance the purchase of a property in Edinburgh that will be converted into supported accommodation for nine people living with addiction problems who are currently – or are in danger of – rough sleeping.

Carlin, 58, is putting her money where her mouth is: she is investing £30,000, a third of her retirement savings, in the scheme.

“I believe that those of us who have enough should be able to help those who need it the most,” she says. “We want to establish a long-term, sustainable solution to homelessness in Scotland, and a model that can be replicated across the UK.”

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View image in fullscreenHelen Carlin is the founder of Common Ground Against Homelessness and the chief executive of the homelessness charity Rowan Alba. Photograph: Co-operatives UK

Solutions are certainly needed: Carlin says that in Edinburgh alone there are currently about 70 people sleeping rough as we head towards winter.

The minimum investment in this scheme is £500 and the deadline for investing is 28 December. It is important to be aware that there are risks attached to this type of investment. In this case the shares cannot be sold or transferred to someone else but you can withdraw your funds. However, you may have to wait a while – withdrawal of capital will be possible “from no later than” March 2024.

These are tough times for savers, with rates being slashed as low as 0.01% in some cases, but if you are prepared to take some risk with your cash, there are growing numbers of businesses, charities and social enterprises across the UK that are looking for financial support, and offering investors what are often quite impressive returns.

Lisa Ashford at Ethex, an ethical investment platform, says: “Since the beginning of the coronavirus lockdown, with more people spending time at home and in their community, we’ve seen more people contact us because they want their savings and investments to benefit the local area.” Ashford says many are keen to be part of an effort to “build back better”.

Also seeking funding is Nottinghamshire YMCA. It is looking to raise £3m to help finance the completion of a community and activity village designed to empower young people and families in Newark-on-Trent, the first phase of which is already finished.

View image in fullscreenNottinghamshire YMCA offers community activities. Photograph: Lee Ballard/Anwick Photography

Todd Cauthorn, the executive director of YMCA Newark and Sherwood, says the investment will help to “start building a brighter future” for a district that in 2017 was officially ranked 323rd out of 324 local authority areas for social mobility.

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Many young people in and around Newark and Sherwood “don’t feel they have aspirations – they don’t feel like there are things there for them or being created for them,” he adds. On top of that, the impact of Covid-19 has pushed up demand for the YMCA’s services. With the new venture, the 149-year-old charity hopes to create more opportunities and better outcomes across everything from youth development and healthy living to education and employment.

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There must be many people of our age and background, especially during the Covid pandemic, with more disposable incomeSybil and Allan Reed

Among those who have already invested in the Nottinghamshire YMCA project are Sybil and Allan Reed, who are in their 80s and live in North Yorkshire. They have also invested in other projects via Triodos Bank’s ethical investment platform, and put money into the YMCA one “because it is community-based and provides opportunity and resources for the young and less privileged”.

They say: “There must be many people of our age and background, especially during the Covid pandemic, with more disposable income, more time to manage that money in a responsible and informed way, more opportunity to follow its progress and outcome, and more certainty (being good Yorkshire folk) of getting a good return.”

To support this project, investors put money into unsecured bonds available via This is a six-year product and when the bond matures in February 2027 your capital is returned to you. The scheme is targeting 6% gross interest a year, the minimum investment is £50 and the offer is due to close on 21 December.

The bonds are transferable but are not listed on any investment exchange, so bondholders wanting to bail out would have to find a willing buyer.

There are lots of other schemes looking for backing – Ethex and Triodos Crowdfunding are good places to find ones near you. Some of the other currently live include:

Bristol Energy Cooperative wants to raise £2m via a withdrawable shares offer to help finance a range of renewable energy projects in the region and is targeting a 3.5%-a-year investment return.

Among the planned projects is what would be Bristol’s first hydroelectric generator, which will use the natural force of the water falling across Netham weir to spin twin turbines, producing enough energy to power 250 homes.

View image in fullscreenNetham Weir will be used to produce energy. Photograph: Bristol Energy Cooperative

The share offer is open until 31 December and the minimum investment is £100. To find out more, go to the Ethex website.

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In London, North Kensington Community Energy is running a withdrawable shares offer to raise £107,000.

It has already installed solar panels on two local schools and a community centre, and for its second project has fitted 138kWp of panels (enough to power 44 homes) at the Westway Sports & Fitness Centre. The electricity generated will be sold to the sports centre at a discounted rate, with any surplus sold back to the grid. By investing you become a co-owner of the panels.

The project will provide an expected return of 3% annual interest to shareholders, with the offer due to close on 31 December. Minimum investment is £100 – or £50 if you live in north Kensington and are either 24 and under or receive benefits. To find out more, visit the website of the south London-based organisation Repowering.

Risks and rewards

A “remarkable” 92% of businesses that have raised finance via withdrawable shares (also known as community shares) are still trading, according to a recent report from Co-operatives UK, the network for the country’s thousands of cooperatives.

However, this type of investment is a lot riskier than putting your money into a savings account – it is possible that you could lose everything. Withdrawable shares and unsecured bonds are not covered by the Financial Services Compensation Scheme, your money is at risk and returns are not guaranteed.

Also, sometimes you have to wait several years before you are entitled to withdraw the cash you have invested.

In June, the City watchdog the Financial Conduct Authority announced a permanent ban on the promotion of “speculative mini-bonds” to small investors. The term mini-bond refers to a range of investments, and the ban applies to “the most complex and opaque” bonds – for example, where the money raised is lent to a third party or used to buy investments.

Triodos Bank’s crowdfunding platform offers several bonds but says the ones on its website do not fall into the category identified by the FCA and so are unaffected by the ban.