Answers to your most frequently asked questions

The Citizenfund is an investment cooperative. We operate like an investment fund: several individuals and legal entities invest a certain amount of money in the Citizenfund. The Citizenfund then uses the envelope to invest this money in companies that have a positive impact on society. These companies will then generate income (dividends or interests), which will be paid back to the Citizenfund and then to the Citizenfund’s investors (as dividend).

Putting money into the Citizenfund is therefore an investment and not a philanthropic act.

At Citizenfund, it is our cooperators-investors who choose the companies that the fund finances.

The triple-checking process that we have put in place allows us to rely entirely on collective intelligence to make funding decisions.

How does it work?

1° After an initial meeting, the Selection Committee verifies that the entrepreneur and his project correspond to the values of the Citizenfund by evaluating it on 5 criteria :

Purpose: Does the project meet at least one of the United Nations’ sustainable development objectives?

Operation: Is the way in which the project leader and his team wish to achieve their objective compatible with the Citizenfund’s values (governance, profit distribution, etc.)?

The team’s investment: Do the project leader and his team seem sufficiently invested in their project?

Implementation capacity: Do the project leader and his team have the capacity to bring the project to a successful conclusion?

The financial plan: Is the project’s business model self-supporting or at least will it be self-supporting?

2° Our cooperators-investors meet the entrepreneur and his project and challenge them in a friendly manner. They then vote during 10 days on our site for or against the financing of the social enterprise by the Citizenfund. If the majority is in favour of the project, it will be financed. The majority wins.

3° An elected cooperator-investor then takes over by becoming an observer. His role is to monitor a financed project, hand in hand with the entrepreneur and the Citizenfund’s operational team.

For each share/share purchased, the Citizenfund charges a one-off fixed fee of 4% (€10 for B shares at €250, €2 for C shares at €50).

We are currently considering other forms of income.

By investing your money in the Citizenfund, you become a real actor of change. Indeed, you finance positive companies that contribute to a better world. The 6 main benefits we see are :

• You choose the companies in which the fund invests, thanks to an online voting system.

• You support social entrepreneurs and enable the evolution of their projects.

• You get a guaranteed social return and a potential financial return of a maximum of 6%.

• Cooperative governance 1 person = 1 vote ensures greater democracy in decision-making.

• Your risk is mitigated thanks to the diversity of the companies financed by the Citizenfund.

• You are part of a network of people who are passionate about entrepreneurship, impact… or both!

Do you see others? Let us know ?

50 € if you are under 26, 250 € if you are older. You can take as many shares as you wish. Your investment is, therefore, a multiple of €50 (if you are under 26) or €250.

The Citizenfund can provide loans or capital, depending on the needs of the social enterprise. The amounts invested or loaned are currently in the region of 10,000 euros. The objective is to gradually increase the average investment ticket while remaining within the limit of 10-15% of our investment capacity.

Generally, the Citizenfund co-invests with other players in ethical and sustainable finance, in particular with members of Solifin.

The investment horizon of the Citizenfund is a long-term one: 7-10 years.

Your investment will potentially have a double return: a guaranteed societal return (due to the impact of the companies financed), and a potential financial return of 6% of the nominal value of the shares. This financial return is by no means guaranteed.

The 6% limit is imposed on us by our CNC approval, following the article 31 of the Articles of Association and the Royal Decree of 8 January 1962 setting the conditions for the approval of groups of cooperative companies and cooperative societies. The withholding tax will be withheld at the percentage imposed by the legal requirements. The surplus (above 6%) will be retained, in particular to ensure a dividend in the coming years or to absorb any losses relating to a specific investment. Dividends are payable at the places and times determined by the Board of Directors.

Yes! Members wishing to leave the fund will be able to recover the maximum nominal value of their shares. Following Article 15 of the Articles of Association, the resigning or excluded Member is entitled to the repayment of the nominal value of his shares provided that the book value is higher than the nominal value. If the book value is lower than the nominal value, the resigning or excluded Shareholder shall only be entitled to the book value of his shares. In addition, the Member shall be entitled to the reimbursement of his shares if the total reimbursements do not exceed annually one-tenth of the net assets, as shown in the previous balance sheet approved by the General Meeting. If this were the case, the redemption would be postponed until conditions permit. Reimbursement to the resigning or excluded Member shall be made in the order of arrival of the simple letter or e-mail.

We believe that the most important risks for the investor are the following:

Issuer-specific risks – operational and commercial: The main risk associated with the activity of Citizenfund SCRL is that the companies invested by Citizenfund SCRL may go bankrupt and that Citizenfund SCRL may lose its investment. To mitigate this risk, Citizenfund SCRL seeks expert advice before investing in companies. In addition, Citizenfund SCRL diversifies the business sectors from which the financed companies originate to reduce market risks. Finally, Citizenfund SCRL never invests more than 15% of its investment capacity in a single company. The cooperator is also subject to the risk that Citizenfund SCRL may have to stop its activity and thus lose its own invested capital. In the event of liquidation, the cooperator takes second place to the other creditors in the distribution of the asset sale project. In other words, most of the time, he cannot recover anything.

In the start-up phase of Citizenfund SCRL, ICECO SA will pay the management and promotion costs of Citizenfund SCRL free of charge as long as the income of the latter does not allow it to cover these costs. This is an opportunity for Citizenfund SCRL to reduce its expenses during its first years. It is also a risk since the cooperative is dependent on a third-party organisation and the default of the latter would force Citizenfund SCRL to internalise its management and promotion more quickly, which would inevitably weigh on its financial balance.

Risks specific to the issuer – linked to subsidies: Citizenfund SCRL has called on subsidies as part of its development. Nevertheless, the non-obtaining of these subsidies does not jeopardise the activity of CITIZENFUND SCRL, since ICECO SA bears the costs of the Citizenfund.

Risks specific to the issuer – governance : The persons in charge of the daily management have sufficient financial and management knowledge for the proper management of Citizenfund SCRL. CITIZENFUND has set up a highly transparent, cooperative and rigorous governance system that calls on collective intelligence in the selection of projects to be supported and in investment decisions. Citizenfund operates according to the principle of cooperative governance “1 person = 1 vote”. Each cooperator has the same voting power (whether a Category A or a Category B cooperator), regardless of the amounts invested, for both investment decisions and internal governance. The Citizenfund also has a board of directors, made up of A and B cooperators. In addition, the Citizenfund has put in place a series of processes and tools that facilitate its governance and its handling if necessary.

Unfortunately, an investment in the Citizenfund is currently not eligible for the Tax Shelter.

In Belgium, income from movable property, i.e. income from shares (dividends), is subject to tax. This is called withholding tax. In the case of Citizenfund cooperative shares, this tax is collected by withholding the withholding tax (30%). Citizenfund will automatically withhold this withholding tax (30%) due by the members and pay it to the tax authorities. For natural persons, there is an exemption from withholding tax on dividends. Since 2018, it is 640€ per year. It is up to the taxpayer to apply for this exemption through his tax return.

A cooperative is a type of enterprise. This legal status promotes internal democracy (with the principle of one man, one vote) and the redistribution of profits according to the activity carried out with the cooperative (rather than according to the capital invested).

Cooperative entrepreneurship is appropriate for building joint projects when a number of customers, suppliers or employees have a common will to undertake outside a purely speculative purpose.

The Citizenfund has taken the form of a cooperative for several reasons.

Firstly, as the aim of the Citizenfund is to enable everyone to become an actor of change by financing transition projects, the cooperative model is the legal form that best suited our mission. As the process to become a cooperator is very simple (public offering) and very affordable (cooperative shares are very accessible), citizens can easily take action. Thanks to the cooperative model, the transition is thus within the reach of citizens.

We have obviously chosen the cooperative model for the philosophy and spirit it represents. The cooperators have a real say in the selection of the companies that the Citizenfund finances, and this participatory democracy on the principle of 1 person = 1 vote is very important to us. The fact that citizens can express themselves and use collective intelligence to speed up the transition is part of the very DNA of the Citizenfund.

The cooperative model, and particularly the CNC approval, allows to limit and control the risks of drifts that an investment fund could experience, such as a shorter-term vision that would not (or less well) serve the Transition. The policy for allocating earnings and distributing dividends (maximum 6%) favours reinvestment in the project to the detriment of excessive shareholder remuneration.

Finally, the cooperative model is a model that can be much more resilient than other business models. By involving a large number of people in its operation, we create a healthy environment for the development of the Citizenfund and its objectives.

In a company, governance is the set of decision-making, information (transparency) and monitoring bodies and rules enabling the stakeholders and partners of an institution to see their interests respected and their voices heard in the running of the institution.

Participatory governance “1 person = 1 vote” is specific to cooperatives: the same weight being given to each member, regardless of the number of shares he holds, opens the way to democratic decisions and fairer practices.

Collective intelligence designates the capacity of a community to make intelligence and knowledge converge in order to advance towards a common goal. It results from the quality of interactions between its members.

At the Citizenfund, we use collective intelligence to select the projects to be financed by the fund. In concrete terms, collective intelligence materializes during our validation sessions (meeting with social entrepreneurs) and during online votes for or against project funding.

Class A, B and C shares offer the same rights and obligations to their holders:

Voting rights: Each member has one vote, regardless of the number of shares held. With the exception of the cases provided for by law and in Article 25, decisions will be taken by a simple majority of votes, regardless of the number of shares represented.

A social enterprise is an economic entity whose aim is to generate a social or environmental benefit in order to finance all or part of its action. It differs from a traditional business in that it reinvests its profits to pursue its social or environmental “mission” while ensuring its financial viability.

Social impact investing is defined as an investment that explicitly combines a social return with a financial return on investment. Social impact investing therefore involves the establishment of priority and specific social objectives whose impact is measurable through a continuous process of evaluation. These investments can be made in all legal types of organisations with a sustainable business model, and target remuneration levels ranging from no remuneration to near-market returns. (Wikipedia)

The name Sustainable Development Goals (SDGs) is commonly used to refer to the 17 goals established by the UN Member States and which are brought together in Agenda 2030. This agenda was adopted by the UN in September 2015 after two years of negotiations involving both governments and civil society. It defines targets to be achieved by 2030, defined ODD by ODD. There are 1691 targets and they are common to all the countries involved. They respond to the general objectives of eradicating poverty in all its forms and in all countries, protecting the planet and ensuring prosperity for all (see: three pillars of sustainable development). (Wikipedia)