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Thirty-Five Years Growing Co-ops : River Valley edition : Sunday, 23 February 2020 13:54 EST : a service of The Public Press
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The Cooperative Fund of New England

     by Erbin Crowell

The recent crisis in the global financial system has contributed to a renewed search for economic alternatives that can better meet people's needs, build wealth and create a more sustainable, resilient communities. Severe unemployment, shuttered businesses, and millions in wealth lost on the stock market have caused quite a bit of soul-searching, especially among socially responsible investors. A host of new buzzwords have emerged in recent years, including green jobs, slow money, local investing, and social entrepreneurship.

Another buzzword, but one that has been around since the 1800s, has also been receiving a fresh look: the "co-operative". Centered on community ownership, democratic governance, and meeting human needs before profit, co-ops are well-suited to addressing modern challenges and opportunities, often in areas that have been ignored by mainstream businesses. They provide people with groceries, housing and healthcare, help farmers get their products to market and enable workers to preserve and expand employment opportunities. In communities with limited resources, credit unions (a form of financial co-op) provide loans, savings accounts and other services.

What makes co-operative enterprise unique is that they are owned and democratically controlled by the people who use them to obtain products, services or employment. In contrast to stock markets, which are based on the buying and selling of shares in corporations, co-ops root wealth, control and infrastructure in the communities they serve. In the search for business models that create lasting change, co-operatives are receiving renewed attention — as are organizations such as the Cooperative Fund of New England (CFNE) that for thirty-five years has been connecting social investors with co-operative enterprise.

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Funding Co-operation

Co-ops are more common in our region than you might think (see, for example, "The State of Co-ops", in Green Living Journal, December, 2008). And according to a recent study by the University of Wisconsin, there are nearly 30,000 co-operatives in the U.S., securing over 2 million jobs and generating almost $654 billion in revenue in 2008. And in contrast to the mainstream economy, co-ops have been remarkably stable over the past few years due in large part to their unique structure, which puts people before profit.

Despite their contribution to the economy, co-ops often face challenges in obtaining the capital they need to expand and serve their communities better. It was for this reason that a group of activists and social investors gathered thirty-five years ago to found the Cooperative Fund of New England (CFNE). Established as a non-profit 501(c)3, CFNE is a certified Community Development Financial Institution (CDFI) that takes the resources provided from social investors — including individuals, socially responsible investment firms, faith-based organizations, banks, foundations, and other co-operatives — and turns them into loans and other assistance to co-operative businesses, worker-owned enterprises, and community-based nonprofits.
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Launched with an initial $11,000, the Cooperative Fund has raised over $21 million in investment since its founding, making more than 500 loans and resulting in the creation or preservation of over 6,500 jobs, 3,600 units of housing, and thousands of business ownership opportunities — all without losing a penny of investor resources.

"Our thirty-five years of experience lending to co-operatives has demonstrated the contribution that they make to our communities," says Rebecca Dunn, CFNE's executive director and fund manager for the past 25 years. "But is has also revealed as a barrier to growth the lack of access to additional equity capital that fits the co-op model of member control."

"Investing in co-ops is a great way to create significant social impact as well as democratize participation for small investors," says Wes Selke, investment manager for Good Capital, LLC. A look at CFNE's list of borrowers over the years offers a glimpse of the ways that co-op enterprise can be used to address modern challenges and opportunities, particularly in the context of a difficult economy:

Growing Good, Green Jobs: There is a lot of talk these days about green jobs —creating employment in emerging industries that are focused on preserving or restoring environmental quality — and worker co-ops like Pioneer Valley PhotoVoltaics, or (PV)2, are leading the way. A designer and installer of renewable energy systems including solar, wind and small hydro projects, (PV)2 is committed to the highest quality service while creating jobs at fair wages. Their mission is "to increase the use of renewable energy, to reduce the region's dependence on fossil fuels, and to help communities reduce their environmental footprint." A line of credit from the Cooperative Fund has helped the co-op grow, serve its customers better, and create new ownership opportunities.


1. Expanding Home Ownership

In this economy, home ownership is at risk or out of reach for many people. For tenants in manufactured housing parks, the situation can be even more challenging as the land that your house sits on can be sold out from under you. Recently, the Cooperative Fund has helped communities such as the Evergreen Manufactured Housing Co-op in Warren, MA, gain more control over their lives. When the current owner decided to sell, residents organized and purchased the land themselves. A loan from CFNE supported the purchase and the renovation of long neglected facilities. "We had nowhere to turn," said Remo Pizzichemi, resident-owner of the Evergreen Realty Co-op. "CFNE helped clear the way for us to buy the land our homes were on."


2. Strengthening Local Food Systems

Food co-ops have been pioneers in building a more just, democratic and sustainable food system, from organic foods, to Fair Trade and local agriculture. Co-ops such as Rising Tide Community Market in Damariscotta, ME, are also examples of the power of community ownership. Rising Tide was the first recipient of resources from CFNE's Cooperative Capital Fund, which supported expansion of the co-op into a new location, a former car dealership "repurposed" as a community grocery store. "While sales drive all other numbers in the grocery business," write co-managers Scott Cooper and Maryanne Seredynski, "we recognize that it is the triple bottom line — Social, Economic and Environmental — that we are really working towards."

Since its first loan, to Buffalo Mountain Food Co-op in Hardwick, VT, CFNE has been investing in a sustainable, regional economy. Buffalo Mountain Food Co-op is now at the center of a town described by some as the "poster child" for the local food movement. More recently, the Cooperative Fund has supported the emergence of regional organizations involved in economic development. In western Massachusetts and southern Vermont, for example, the Valley Alliance of Worker Co-ops represents ten worker-owned enterprises employing more than 75 people engaged in everything from copying services and auto repair, to human powered delivery and internet services. Another partner, the Neighboring Food Co-op Association (NFCA), is comprised of 17 food co-ops in western New England. Organized around the vision of a "thriving regional economy", the co-ops of the NFCA are owned and democratically governed by over 64,000 member-owners. In 2008, the Association had $161 million in sales and — reflecting their shared commitment the regional economy — purchases of more than $33 million in local products.


Linking Investors with "Co-opreneurs"

Across our region, co-ops have helped people to help themselves, create new products and services, and strengthen their communities. As social entrepreneurship and green business become the catchwords of the day, this model is gaining renewed attention. Owned and controlled by the people they serve, co-ops are a proven model for lasting change. However; in order for them to grow and thrive, they need access to financial, technical, and other support that enhances the values and benefits of co-operation.

In this context, the Cooperative Fund of New England has for 35 years acted as a bridge between social investors who want their money to do more and "co-opreneurs" — creative co-operators that are using the co-op model to find common solutions to their collective challenges, to nurture local skills and abilities, and develop community assets and infrastructure.

"Why invest? I was looking for a way to support the co-ops I admire," says Cooperative Fund investor Harrison Drinkwater. "And the list of clients served by CFNE reads like a Who's Who of co-operatives in our region."


For more information about the Cooperative Fund of New England visit www.coopfund.coop or contact Rebecca Dunn at 800-818-7833, rdunn@coopfund.coop

Erbin Crowell serves as executive director of the Neighboring Food Co-op Association, and is a member of the board of trustees of the Cooperative Fund of New England and the board of directors of the National Cooperative Business Association. He may be contacted at erbin@nfca.coop.

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