Is 2012 the Year of the Business Co-op?
Posted by Steve Dubb on July 4, 2012
Last October in New York City, United Nations Secretary General Ban Ki Moon officially designated 2012 as the “International Year of the Cooperative." This marks only the second time in United Nations history that a form of community economic development has been so honored with the only other similar instance coming in 2005 when the UN deemed that year the “International Year of Microcredit." That designation greatly raised the profile of Mohammed Yunus and the Grameen Bank, which were jointly awarded the Nobel Peace Prize a year later in 2006.
The cooperative idea that business should be governed by the principle of “one member, one vote” is hardly new. Antecedents exist across the world. The first modern cooperative opened in Rochdale, England (an industrial town near Manchester) in 1844. Founded by 28 “pioneers” who each bought a one-pound share (purchased over time by the majority of pioneers in weekly two-pence installments), that co-op has since expanded into what is known in England as The Cooperative Group, with 6 million member-owners and 108,000 employees.
Today’s cooperative sector in the United States is also not small. A 2009 study, funded by the U.S. Department of Agriculture and conducted by a team of researchers from the University of Wisconsin, found that the nation had 29,285 cooperatives and credit unions, with 856,310 employees, $514.6 billion in annual revenues, and $3.126 trillion in assets. It is estimated that roughly 40 percent of Americans are member-owners of at least one cooperative. Because many people are member-owners of more than one cooperative, the total number of cooperative ownership shares in the United States (350,872,000) exceeds the U.S. population.
For those of us working in low-income communities, however, cooperatives have often been under-appreciated. Increasingly though, there are signs that the cooperative is in the process of being “rediscovered” as a vitally important tool for building community wealth. Among the evidence of the renewed interest in cooperatives are first-time conferences dedicated to cooperative held over the past three months in Syracuse, Madison, and Philadelphia.
Co-op development was also on the table at a White House Summit in May, the first time such a high-level U.S. meeting had occurred. Additionally, Philadelphia congressional representative Chaka Fattah has introduced the National Cooperative Development Act (H.R. 3677), a bill that would provide limited dollars ($25 million a year) for technical assistance regional cooperative development centers and to seed a revolving loan fund to help finance start-up cooperatives in low-income communities.
The Web site of the Campaign for Cooperation, a group founded to support the National Cooperative Development Act, lists a few promising initiatives.
The Democracy Collaborative—where I work—is also using co-ops as a community development tool. The business initiative we work on, called the Evergreen Cooperatives, seeks to develop cooperative enterprises owned by residents in low-income neighborhoods that meet the business procurement needs of area hospitals, universities, and other place-based businesses. Led by the Cleveland Foundation, the Ohio Employee Ownership Center, the City of Cleveland, and the area's hospitals and universities are among the many partners.
Encouraging co-operative business models was also a central theme at last May’s annual meeting of NACEDA, the National Alliance of Community Economic Development Associations. As Bernie Mazyck, President of NACEDA noted in his introductory remarks at this year’s conference, “We must reinvent ourselves to create prosperity for the future.”
For more reading, see the Shelterforce summer 2010 article Green Jobs With Roots
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Steve Dubb is research director at the Democracy Collaborative at the University of Maryland.