Community Dividend Fraction

The Community Dividend Fraction is the % of capital investment (excluding loans) that has been provided from public and charitable funds. Unlike a conventional private company which might take grant funding and is under no obligation to return a share of the wealth created to public/charitable bodies, a FairShares Company or Co-operative keeps a record of grant income and treats it (for accounting purposes) as 'community equity'.

Upon dissolution, the Community Dividend Fraction is calculated by dividing total grant income by the same total plus shareholder funds.

[community and public funding] / ([community and public funding] + [shareholder funds])

This fraction is then used to calculate a Community Dividend - a payment to specified social / charitable / co-operative enterprises that will continue the work of the organisation.

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Return to the FairShares Glossary.