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www.cdi.coop
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.
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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.
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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.”
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Cooperative Principles Voluntary & Open Membership
Democratic Member Control
Member Economic Participation
Autonomy & Independence
Education, Training & Information
Cooperation Among Co-operatives
Concern for Community
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Who gets the benefit?
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Resident-Owned Communities (ROCs)
Members Vote on:The budgetThe BylawsThe Community RulesThe Election of the board
The Board Votes on:Policies Contracts for:-Maintenance-Staff, lawyer, accountant-Capital Improvements
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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 provideassistance for the life of the loan.
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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!?!?
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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
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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 generationBusinesses sold to an outside investor have about a 50-50 chance of success
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Why BOS?
Well planned employee buyouts succeed about 80% of the time.
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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.
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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.
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Raising Wages is good and important, but…
Democratizing the ownership of wealth will accomplish much more!
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(Very) Basic Worker Co-op Structure
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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.
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Island Employee CooperativeDeer Isle, Maine
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Beginning the Conversion Consideration ProcessStep 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
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During the Conversion Consideration ProcessStep 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
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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
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Some Challenges
Access to capitalCost of member and public
educationInvestment in democratic processCo-ops are only as good as their
members ask them to be.
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Some AdvantagesExist 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.
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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
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Cooperative Development Institute
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Matt Meyer, Housing Program Organizer New England Resident Owned Communities617-875-7694 [email protected]
Rob Brown, Program DirectorBusiness Ownership Solutions 207-233-2987 [email protected]
