GEO 15 (II)

ADWD, ECWD 2013 Issue

Grassroots Economic Organizing (GEO), The Eastern Conference for Workplace Democracy and Mariposa Food Co-op are pleased to announce the Advancing the Development of Worker Cooperatives (ADWC) 2013 pre-conference, which will focus on successful inter-cooperative approaches to self-financing and financing within the co-op movement.
 

by Jessica Gordon Nembhard

In 2011 GEO called together worker cooperative developers and supporters to discuss “Advancing the Development of Worker Cooperatives” (ADWC). We conducted an online forum through our website, and organized a one-day conference to kick off the 2011 Eastern Conference For workplace Democracy (ECWD) in Baltimore. Sojourner-Douglass College hosted our pre-conference on July 7, 2011.

In the past year, over a dozen investors made an amazing commitment to the future of worker cooperation and worker-controlled enterprise by investing in Workers Diner. These investments signaled the potential for a new method of raising startup capital for worker cooperative businesses. On the basis of decades-old securities rules, Workers Diner conducted a direct public offering (DPO) in New York, New Jersey, and Connecticut.

Regions: 
Visions & Models: 
Movements & Struggles: 
Practices, Tools & Strategies: 

(Editor’s Note: The Valley Aliance of Worker Co-ops (VAWC) received the 2013 Eastern Conference for Workplace Democracy's Award for Co-operative Advocacy and Development. The award specified not only VAWC’s commitment to co-op led development, but their numerous successful worker co-op conversions, the many presentations of their model of development, and the high level of their co-op leadership in the movement.

Summary:

This article provides an overview of various financing models used in the Province of Quebec and in other parts of Canada.   My experience primarily comes from the worker/employee owned co-operatives, but as a co-op developer I also draw on inspiring stories from various forms of co-operatives. 

The Arizmendi Association model of financing draws on elements of successful European cooperative networks we have studied (specifically the Mondragon and Italian models) as well as a business model native to the United States, such as franchising (for more information about the Arizmendi Association of Cooperatives see here). 

Mariposa Food Co-op is a consumer owned and member-worker run food co-op operating in the West Philadelphia neighborhood since 1971. After 41 years of being a members-only space, we opened our doors to the community in 2012, in a space five times that of our historic location. In total, our expansion effort racked up over $2.5 million in debt.

In 1975, leaders of New England’s food co-op community joined with socially-oriented investors affiliated with the Haymarket People’s Fund to unlock access to debt capital for the many food co-ops that were starting and expanding.

There are limited options when looking to finance a co-op, especially a worker co-op. Aside from co-operative loan funds (like the Cooperative Fund of New England {see article by Micha Josephy in this issue}, Workers Revolving Loan Fund and Northcountry Co-operative Fund) and the rare credit union that lends to businesses, financial institutions do not understand co-operatives. Most lenders are completely unfamiliar with the Co-operative Principles and how they influence our business practices.

Building a Solidarity Financial System for co-operatives and democratic work places through a culture of belief

This is Part I of the SolidarityNYC (SolNYC) interview with The Working World (TWW). It is an alternative loan fund that supports worker run co-operatives and other democratic workplaces with micro-credit loans and technical support.

In 2012, the Democracy at Work Network (DAWN) was approached by Kiva Zip about being a pilot trustee for its direct micro-lending program. Kiva Microfinance began in 2005, a non-profit that collects funds online from individual lenders and offers loans to individual entrepreneurs abroad. Since inception, it has made more than 1,000,000 loans. These loans rely on in-country field partners to administer the funds. Kiva launched its newer Zip program in order to loan directly to individuals, asking only that a “trustee” vet applicants and vouch for their credibility.

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