Download - 2012 05 18 osb - co-ops 101
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NW Co-op Development Center
Co-ops 101Oregon State Bar
May 18th, 2012
Eric Bowman, Cooperative Development [email protected]
1063 S Capitol Way # 211Olympia, WA 98501
360.943.4241
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Presentation: Co-ops 1011. Intro
2. Overview and History
3. Co-op Economy and Models
4. Ag Examples
5. Examples of NWCDC Work
6. Legal Resources
7. Q&A
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NWCDCThe Center
a 501(c)3 nonprofit which provides development services for new and existing co-ops
Our mission to foster community economic development through the co-op business model
We’rea team of co-op developers with skills specific to start-up and organizational business development
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Co-ops 101
Investor owned:
Sole proprietor:
Co-ops are member:◦ Owned◦ Controlled◦ Benefited
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Corporate Structure
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Co-op Role
U.S. Facts:– 250 purchasing co-ops procure for 50,000 businesses– 3,000 farmer co-ops market 30% of farmers’ products– 8,000 housing co-ops provide 1 m homes– 7,500 credit unions provide services to 90 m members– 1,000 rural electrics operate ½ the nation’s distribution– 29,000 co-ops serve 43% of the population
Top 100 co-ops’ 2010 revenues = $194 Billion!
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Internationally Recognized Principles
1. Voluntary and Open Membership
2. Democratic Member Control
3. Member Economic Participation
4. Autonomy and Independence
5. Education, Training and Information
6. Co-operation among Co-operatives
7. Concern for Community
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Ownership
Member-Owners can be
– Consumers– Producers/Farmers– Workers– Other Businesses
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Distributionism
Consumer◦ Credit Unions◦ Housing◦ Retail (e.g. food co-ops)◦ Farm Supply
Two Schools
Producer◦ Worker◦ Farmer◦ Artisan
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Distributionism cont.
Another School…
Solidarity or Multi-Stakeholder◦ Weaver Street Market owners:◦ Workers◦ Consumers
◦ Idaho’s Bounty Co-op owners:◦ Producers◦ Consumers
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Co-op to Co-op Supply Chain
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Why Cooperate?
…to access resources not individually achievable
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Unique Characteristics of Co-ops
• Owned/controlled by members, not outside investors • Exist solely to serve members• Return surplus to members based on use, not
investment• Pay taxes on income kept for investment/reserves;
surplus revenue returned to members who pay taxes• Economy of scale = valued added
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Co-op Development Stages
• Identify a need a co-op could meet
• Form Steering Committee• Research Feasibility • Review Findings (Go/No Go)• Membership Drive• Planning and Financing• Begin Operations (Go/No Go)
Project LifecycleProject Lifecycle
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Co-op Development Stages
• Identify a need a co-op could meet
• Form Steering Committee• Research Feasibility • Review Findings (Go/No Go)• Membership Drive• Planning and Financing• Begin Operations (Go/No Go)
How We Assist
• Facilitate identifying mission and goals
• Train founding Board members• Market and feasibility research• Assist with organizing• Professional, 3rd party perspective• General business consulting
Project LifecycleProject Lifecycle
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“The Un-Corporation”o 1,723 members (64 in NW)o ~ 10% of organic farm communityo Largest organic co-opo Founded in collective bargaining
Philosophy:o “Crafting new vision of foods/farms”o “More than delicious”o Adding value thru values
CROPP Cooperative
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Jon Bansen - Monmouth, OR
This is as big as I ever want to be. Working with a co-op has allowed me to produce good milk that receives a premium price, giving me a great livelihood, so I don't have any reason to want more…
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14 farmers in Brothers, OR
“we were going broke” (1986)o Economics: increasing interest rates, land
priceso Social: cholesterol fears, “enviros”
Product is more than beef…
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…it’s about the people• Selling direct = value added• Shinrai• Consensus
Business Philosophy
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• 20 cattle ranches offering varied agri-tourism
• Co-op:– Matchmaker– Co-marketing– “geo-tourism”– Point of contact– Commission-based
Travelers come to the ranches as guests… but they go home as advocates for family ranching – Karen Searle, founder
Montana Bunkhouse Working Ranch Vacations
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Case Studies Review
Key Points:
1. Born out of need/adversity
2. Meeting members economic needs
3. Members are invested in success of co-op
4. Marketing values and philosophy
5. Successful innovation/reinvention
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Sample NWCDC’s Clients
• Manufactured Home• Shared services• Small ag• Rural food
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Manufactured Home ConversionT.A. provider and broker• Makes an offer to investor owner• Organizes community corporation• Drives debt financing• Trains founding board
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“A co-op is a business model that allows a group of people (in this case guides) to combine their resources to achieve their goals”
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Mountain Community Co-op
• 2.7k population of Eatonville, WA• 264 Members• $170k Gross • 6 years old• 2 loans paid off• 2 buildings owned• 1 buying club• 0 paid employees
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General Resources1. How to Start a Food Co-op; CGIN
2. How to Start a Cooperative; USDA
3. The Worker Cooperative Toolbox; NCDF
• Resources/toolboxes– Food Co-op Initiative (e.g. legal primer)– US Federation of Worker Co-ops
• Magazines– Cooperative Grocer– The Cooperator; Co-op and Condo monthly
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Legal & Technical Resources1. “Sample Legal Documents for Cooperatives”
and “Cooperative Marketing Agreements”• USDA
1. “The Law of Cooperatives”• ABA Business Law Section
1. “The Cooperative Accountant” journal• National Society of Accountants for Cooperatives
1. Electric Co-op Bar Assn.• A Professional Network within NRECA
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Thank You!
Eric [email protected]
Northwest Cooperative Development Center1063 Capitol Way S # 211 Olympia, WA 98501
360.943.4241 | www.nwcdc.coop
Fostering community economic development through the cooperative business model