Co-op Training Module IICo-operatives & the Community

Development Process

Unit 1

Definition & Values

Co-operative Development

A Co-operative “is an autonomous association of persons united voluntarily to meet their economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.”– Legally incorporated enterprise/business– Owned & democratically controlled by people seeking to

satisfy a common need for service

– Structure can address both social & economic goals to improve the quality of life for members and the community at large

– Co-op model can be applied to any community economic venture or social activity (i.e. fisheries, health care, eco-tourism, etc)

Community Development

Community Development “is the collective process by which residents and communities become responsible for, organize for, empower themselves, plan for and achieve sustainable social, economic, and environmental development and a substantially self-directed future.”– Focused on the sustainability of the cultural, economic

and social well being of rural communities

– Seeks to empower people to participate in the future of their community

– Encourages collective action to improve the quality of life for community residents

,

Community Economic Development

Community Economic Development “is a process which focuses on wealth creation, job creation, value-added activities, business and co-operative development, and enhanced viability for the community, the region and the province.”– Enables communities to improve and solidify local

economies– Based on collective action and integration social, cultural

& environmental aspects of community life– Primarily driven by economic goals– Seeks to build human resource capacity

Shared Principles & Values

• Both co-operatives & community development agencies share the following principles & values:– A “bottom up” approach to development

• Ensures community engagement in planning and implementation of initiatives

• Encourages collective action– Community engagement and control

• Elects local boards of directors to ensure democratic governance

• Public consultation a norm– Building community capacity

• Provides training & experiential learning activities for local volunteers

• Creates networks of skilled and committed people

What Co-ops Bring to the CD Process

• An alternative business model which is:– An extension of community development principles into

the business sector– A tool that can deliver community identified service

requirements– A model that facilitates community ownership of

business enterprises – A mechanism for generating community investment

Unit 2Co-operative Development In

Newfoundland & Labrador

Co-ops: Meeting Community Needs

• 100 years of serving needs of Newfoundlanders & Labradoreans

• Systemic poverty & lack of services precipitated formation of first co-ops

• Hundreds of co-ops & credit unions formed in 1940’s• 1950’s and ’60’s brings new era of community development

(i.e. MUN Extension, etc)• Smaller co-ops fade into history while new ones form to

meet changing economic & social conditions (i.e. Fogo)• 1970’s and ’80’s see resurgence of co-op development

(i.e. Petty Harbour Co-op, Eagle River Credit Union, etc)

Co-ops & Community Development Today

• Currently, over 80 co-ops & credit unions provide a variety of business and community services across the province

• Changing demographics & society needs create new co-op opportunities (i.e. small-scale farming, ambulance services, etc)

• Regional & community development groups use the co-op model to respond to needs (i.e. Tourism marketing, Municipal Servicing, etc)

Engagement of CD Agencies in Co-op Development

• CD Agencies that have assisted with co-op formation include:– Fishermen’s Union Shrimp Company – Eagle River Credit

Union– Gambo-Indian Bay Development Association – Blueberry

Industry Co-op– Shorefast Foundation (Fogo) – Fogo Island – Change Islands

Agricultural Co-op– Random North Development Association – Mink Pelting Co-

op– Baie Verte Consumer’s Co-op – Advocate Youth Services Co-

op– Humber Valley REDB & Model Forest NL – Forest Products

Co-op

Building Co-op Development Partnerships

• Co-op business model complements efforts of community development agencies

• CD agency support continues to be an important element of the co-op development process

• NLFC values its working relationships with;– Regional economic Development Boards– Regional Development Associations– Municipalities– Industry Associations

• Key CD agency roles include;– Enhancing public awareness of the co-op option – Identifying potential co-op development opportunities

Unit 3 What Makes Co-ops Unique?

Co-ops are Community Owned & Controlled Businesses

• Co-ops strive to provide high quality, cost effective services for member owners

• Private sector’s primary focus is to maximize profits• Co-operatives focus on the economic, social, and

environmental benefits to the local community• Co-operatives are not entirely creatures of the

business world, nor of the community, but rather a combination of the attributes and functioning of both

Co-ops Require Community Investment

• As a business, co-ops require capitalization from their members to ensure business success

• The mobilization of local capital is key to local ownership and control

• Member investments create long term stability is key to financing future development/expansion

• Members tend to re-invest co-op profits to enable leverage of funds from other agencies (i.e. banks, government, etc) for operation activities

Co-ops Generate Profits for the Community

• Co-ops distribute profits based on the members use of services, not on the amount of capital invested

• Co-ops often use part of their profits to support other community development projects

• Historically, profits generate by large private sector operations (i.e. fisheries, retail, etc) are not retained in the local economy/province

• Co-operative maximize retention of profits to the benefit of its members and the local economy

• Some co-ops (i.e. Fogo Co-op) direct funds from profitable activities to less profitable ones to maximize community employment opportunities

A Legislated Operational Framework

• Co-ops are legal corporate entities under provincial & federal legislation

• The “Co-operatives Act” protects the unique aspects of the co-op business structure and operations & the rights of member/owners

• Co-op legislation provides more safeguards to protect the interests of members and those who conduct business with a co-op than private sector legislation

Priority is on Member Services

• A co-op’s first priority is to serve the needs of its members by providing high quality, cost effective services

• The members always have direct control over what services are provided, how they are delivered and maintained

• The needs of the members and the community are always balanced against the fiscal sustainability of the co-op enterprise

Unit 4 Steps in the Development

Process

Opportunity Identification

• Key Questions – Would the recipients of the service, i.e. the potential co-

op members, be better served by being the owners and having control of the operations of the enterprise?

– Are there potential sources of technical assistance and advisory support to help with the co-op development process?

– Will the services provided by the co-op provide a clear and direct benefit for potential members that would justify their investment in the enterprise?

Initiating the Developing Process

• Initial meetings of co-op proponents• Formation of a Steering Committee• Proposed business services/products are identified• Development of a the co-op concept paper and initial

business viability assessment• Enlist the support and participation of the NLFC &

other key development stakeholders

Building the Co-op’s Structure

• Steering Committee (& RDN Member):– Identify/recruit potential members– Identify potential funding sources– Develop the co-op’s By-Laws– Draft operational Policy & Procedures Manual – Initiate the development of a Business Plan

Developing the Business Plan

• Steering Committee must be actively engaged in the process

• Seek advice on selecting the appropriate consultant• Set clear targets for equity investments by members• Consult with potential funding partners on their

information needs• Make sure plan is realistic and demonstrates that the

enterprise can be self-sustaining

Incorporating & Launching the Co-operative

• Early engagement & consultation with the Registrar of Co-operatives

• Advice & guidance of NLFC and RDN member will help ensure approval of incorporation

• Once incorporated, steering committee evolves into the co-ops Provisional Board

• Board ensure “doors” are ready to be opened (re: operations, administration, physical plant and equipment , etc)

• Board organizes the Co-op’s first annual meeting during the first year of operations

Ongoing Operations

• “New” Board is elected & meets regularly to address ongoing operational & administrative requirements

• Training needs of Board, Management & Staff are identified and addressed

• Board establishes committees to share workload (i.e. Executive, Finance, Member Relations, etc)

• Communications with members, partners and the local community becomes a priority

• Operational/Financial success requires full member participation and support

Unit 5 Co-op Development Support

Services

Training & Development Advice

• Newfoundland-Labrador Federation of Co-operatives: – Information, training and development advice for

existing co-ops and groups developing new co-op enterprises

• Regional Co-op Developers Network: – Eight (8) regionally based INTRD staff providing co-op

development support services at the community level

• Community Capacity Building Program: – INTRD program which delivers community workshops,

including 3 co-op development training modules

• Canada/Newfoundland Business Service Centres:– Business support services, including information about

the co-op business option

Co-op Enterprise Financing Support

• Programs & services available to private companies are generally available for co-ops. Programs specifically available to co-ops include:

– Co-operative Equity Investment Fund (CEIF): A provincial program which provides equity contribution to assist established and emerging co-ops to finance start-ups and expansions in the province.

– Co-operative Development Initiative (CDI): A national program which provides non-repayable contributions for groups engaged in the establishment of new co-ops.

– Regional Sectoral Diversification Fund (RSDF): A provincial program which provides non-repayable contributions to assist with development of not-for-profit community development co-ops.

Unit 6 Community Development

Partner Support

Public Awareness

• CD agencies and industry/sector agencies can be more involved in supporting co-op development by:– Ensuring that Boards, Staff and members become well

versed on the benefits of the co-op model through available training programs

– Developing partnerships with the Federation and the RDN who can advise and support regional and community efforts

– Ensuring that information on co-op are included in public consultations, web sites, business/economic workshops and newsletters

Opportunity Identification

• Ask the question “Can the co-op model benefit this social and/or economic opportunity which we have identified by…”– Reviewing community, municipal or strategic plans to

determine if there are activities, economic targets or social objectives that might utilize the co-op model

– Contacting the Federation or local RDN representative if your organization is uncertain if a co-op is a viable or realistic option

Leadership & Coordination

• Assist interested people to form steering committees to explore the co-op option

• Help these committees access necessary resource supports

• Help generate community interest and support as the committee moves forward

• Provide administrative and logistical support (i.e. meeting rooms, photo copying, etc)

• Become a member of the proposed co-op, or agree to provide ongoing support to their efforts

Public Confidence Building

• Encouraging fledging co-ops groups that need nurturing and “hand holding” to build confidence

• Help these groups access team building, enterprise development advice and other training supports to assist with the development process

• Facilitating increased public awareness of the co-op model and providing initial encouragement and support will help ensure a solid foundation for newly developing co-op enterprises

Ongoing Support & Aftercare

• Become knowledgeable about existing co-ops in your region or industry sector

• Consider how your CD agency might be of assistance in supporting ongoing co-op operations.

• Encourage co-ops to participate in your regional planning and development activities

• Make available your agency’s services to support co-op activities as required

Co-op Development – The Future

• The province’s network of community development & industry sector agencies can play a more pro-active role in supporting co-op development because it:– Fits well with community development principles &

values;– Is supported by both provincial & federal government

policies & programs– Has a demonstrated a capacity to help communities

achieve their development goals and

– Support services are available to assist agencies working

with groups engaged in the co-op development process.

Co-op Development - Some Active Industry Sectors

• Organic foods• Farmer’s markets• Wind Energy• Film production• Community Theatre• Car Sharing• Forestry• Youth Advocacy• Micro-breweries• Broadband Services• Community Services

• Cranberry Production• Fur Farming• Beef processing• Food catering• Arts & Crafts• Funeral Services• Elder care• Blueberry Production• Health care• Outdoor Equipment • Municipal services