The Co-operative Development Institute

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The Co-operative Development Institute

• Northeast Co-operative Development Center founded
  in 1994 by co-op leaders.
• A 501c3 Non-Profit Organization.
• Working across all sectors and industries in New
  England and New York.
• Technical assistance, training education.
• Assembling the resources necessary to develop
  successful co-operative businesses.

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CDIs Mission

• is to build a cooperative economy through the
  creation and development of successful
  cooperative enterprises and networks in diverse
  communities in Massachusetts, New Hampshire,
  Vermont, Connecticut, Maine, Rhode Island and New
  York.

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What makes it a Cooperative?

• A cooperative is an autonomous association of
  persons united voluntarily to meet their common
  economic, social and cultural needs and
  aspirations through a jointly owned
  democratically controlled enterprise.

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Cooperative Principles

• Voluntary Open Membership
• Democratic Member Control
• Member Economic Participation
• Autonomy Independence
• Education, Training Information
• Cooperation Among Co-operatives
• Concern for Community

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Who gets the benefit?
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Resident-Owned Communities (ROCs)

• Members Vote on
• The budget
• The Bylaws
• The Community Rules
• The Election of the board

The Board Votes on Policies Contracts
for -Maintenance -Staff, lawyer,
accountant -Capital Improvements
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ROC USA and CDI

• We partner with residents to purchase their land
  cooperatively
• We engage in a traditional market-purchase of the
  community.
• We contract to provide
• assistance for the life of
• the loan.

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Business Ownership Solutions

• BOS works with business owners to think through
  whether conversion to a cooperative could meet
  their needs, and with employees or community
  members to execute the co-op conversion.
• Whos the BOS!?!?

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Why BOS?

• 97 of Maine businesses are small independents
• Nearly half of those business owners expect to
  retire within a decade
• Fewer than half of those who expect to retire
  within 5 years have a succession plan for their
  business

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Why BOS?

• 88 of current family business owners believe
  someone in the family will continue to run the
  business when they retire, but
• Only about 30 survive into the second
  generation, and only12 survive into the third
  generation
• Businesses sold to an outside investor have about
  a 50-50 chance of success

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Why BOS?

• Well planned employee buyouts succeed about 80
  of the time.

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Why Worker Co-ops?

• Top 10 percent of Americans take more than half
  of all income earned in this country and own 75
  percent of the nations wealth.
• Last year, income of the top 1 percent rose by
  11.2 percent, while the income of the bottom 99
  declined by 0.4 percent.
• Over the past 20 years, the top 1 percent's
  incomes surged nearly 60 percent, while the
  incomes of the bottom 99 percent grew just 5.8
  percent.

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In Other Words

• The top 25 hedge fund managers make TWICE as much
  as all kindergarten teachers in America combined.
• The 26.7 billion in bonuses handed out to Wall
  St. bank executives is enough to more than double
  the pay of every single minimum wage worker in
  America.
• Handful of Walton Family members own more wealth
  than the bottom 40 of all Americans combined.

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• Raising Wages is good and important, but
• Democratizing the ownership of wealth will
  accomplish much more!

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(Very) Basic Worker Co-op Structure
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Organizing a Cooperative Steering CommitteeFor
Considering a Business Conversion

• The role of the Steering Committee is to
  coordinate the learning process for all employees
  as they develop and consider a transition from
  private to employee ownership.

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Island Employee CooperativeDeer Isle, Maine
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Beginning the Conversion Consideration Process

• Step 1 Organize an All-Employee Meeting to
  introduce the idea
• Step 2 Employees sign a Commitment of Interest,
  choose Steering Committee
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• Step 3 Organize the Worker Cooperative Steering
  Committee

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During the Conversion Consideration Process

• Step 4 Worker Co-ops 201
• Step 5 SWOT Analysis, Planning, Articles and
  Bylaws, Un-official Valuation
• Step 6 Present to employees for feedback
• Step 7 Negotiate terms for buying the business

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After the Conversion Consideration Process

• Step 8 Employees vote to incorporate, adopt
  by-laws and agreements
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• Step 9 Finalize Cooperative Plans
• Step 10 Finalize Cooperative Conversion
  Financing
• Step 11 Training and technical support
• Step 12 Business knowledge transferred
  effectively

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Some Challenges

• Access to capital
• Cost of member and public education
• Investment in democratic process
• Co-ops are only as good as their members ask them
  to be.

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Some Advantages

• Exist to meet their members needs. Focus is on
  service not financial return.
• Local control keeps the business in the
  community.
• Money is recirculated in the community.
• Build skills and infrastructure in local
  communities.
• Consumers like co-ops.

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Policies to Grow the Cooperative Economy

• Fund an Employee Ownership Center or Cooperative
  Development Center
• Pre-Development Grants
• Loan Guarantees
• Tax Incentives
• Resident Notification for Park Sales
• Update Incorporation Laws

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Cooperative Development Institute

• www.cdi.coop
• Matt Meyer, Housing Program Organizer
• New England Resident Owned Communities
• 617-875-7694 mmeyer_at_cdi.coop
• Rob Brown, Program Director
• Business Ownership Solutions
• 207-233-2987 rbrown_at_cdi.coop