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The Co-operative Development Institute

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.

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The Co-operative Development Institute

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  1. 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.

  2. CDI’s 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.

  3. 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.”

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

  5. Who gets the benefit?

  6. Resident-Owned Communities (ROCs) The Board Votes on: Policies Contracts for: -Maintenance -Staff, lawyer, accountant -Capital Improvements Members Vote on: The budget The Bylaws The Community Rules The Election of the board

  7. 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.

  8. 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. Who’s the BOS!?!?

  9. 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

  10. 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

  11. Why BOS? Well planned employee buyouts succeed about 80% of the time.

  12. 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 nation’s 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.

  13. 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.

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

  15. (Very) Basic Worker Co-op Structure

  16. 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.

  17. Island Employee CooperativeDeer Isle, Maine

  18. 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 Step 3: Organize the Worker Cooperative Steering Committee

  19. 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

  20. After the Conversion Consideration Process Step 8: Employees vote to incorporate, adopt by-laws and agreements Step 9: Finalize Cooperative Plans Step 10: Finalize Cooperative Conversion Financing Step 11: Training and technical support Step 12: Business knowledge transferred effectively

  21. 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.

  22. 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.

  23. 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

  24. Cooperative Development Institute www.cdi.coop Matt Meyer, Housing Program Organizer New England Resident Owned Communities 617-875-7694 mmeyer@cdi.coop Rob Brown, Program Director Business Ownership Solutions 207-233-2987 rbrown@cdi.coop

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