srem group 10 28 10

NW Co-op Development Center

Seattle Renewable Energy Meet-up GroupOct. 28th, 2010

Eric Bowman, Cooperative Development Specialisteric@nwcdc.coop

Teresa Young, Organizational Development Specialistteresa@nwcdc.coop

1063 S Capitol Way # 211Olympia, WA 98501

360.943.4241

Presentation Overview

1. Intro

2. Co-ops 101 and Overview

3. Models– Consumer– Community Solar– Worker

1. Q&A

NWCDCThe Center

a 501(c)3 nonprofit which provides development services for new and existing co-ops

Our mission to foster community economic development through the co-op business model

We’rea team of co-op developers with skills specific to start-up and organizational business development

Co-op Role

U.S. Facts:– 3,000 farmer co-ops market 30% of farmers’ products– 6,400 housing co-ops provide 1.5m homes– 10,000 credit unions provide services to 84m

members– 1,000 rural electrics operate ½ the nation’s

distribution– 47,000 co-ops serve 43% of the population

Top 100 co-ops’ 2009 revenues = $176 Billion!

Co-ops 101

Investor owned:

Sole proprietor:

Co-ops are member:◦ Owned◦ Benefited◦ Controlled

Ownership

Member-Owners can be

– Consumers– Producers/Farmers– Workers– Other Businesses

Distributionism

Consumer◦ Credit Unions◦ Housing◦ Retail (e.g. food co-ops)◦ Farm Supply

Two Schools

Producer◦ Worker◦ Farmer◦ Artisan◦ Business

Why Cooperate?…to access resources not individually achievable

Marketable Co-op Benefits; “Goodwill”• Keep profits, ownership and control local • Accountable• Trusted

Relationships and Authority

Unique Characteristics of Co-ops

• Owned/controlled by members, not outside investors • Exist solely to serve members• Return surplus to members based on use, not

investment• Pay taxes on income kept for investment/reserves;

surplus revenue returned to members who pay taxes• Economy of scale = valued added

Consumer Models

Consumers aggregate to:• Bulk buy• Govern management• Keep margins low

Models:• Housing• Credit unions• Food co-ops

Flower Power – Salem, OR

• 60 Members• SeQuential B99 at cost plus:

– OR/Fed Road taxes – Delivery fee – $.05 co-op overhead

• Pringle Creek:– Waived rent/utilities– Building garage

Residents in Eliot, ME

• 65 homeowners and small businesses

• Co-op bulk purchase HHO, “bioheat”

• Average savings ~$300• locked-in price

– capped "downside protection"

– always pay the lowest price

Assn negotiates fuel for timber harvesters, haulers, etc.

Up to $.25 per gal savings!

Bulk buying Solar

One Block Off the Grid (not a co-op):• Lower costs• Less confusion• Trusted contractors

“Solar power meets consumer power:

Group discounts help you buy home solar power”

Co-op Owned InfrastructureBaywind Energy Co-op• 1,300 members• 2.5 MW farm

Westmill Wind Farm• 2,000 members• 6.5 MW farm

Characteristics:• One member = 1 vote• Shares and loans sold to community• U.K.

Community Solar

• Community ownership:– Might be a co-op, might not– Co-op pools project participants– Facilitated/managed by for profit developer– “condo” model– Joint venture

What is a Worker Cooperative?

•Worker Owned •Worker Controlled

Worker-Owned

• Investment buy-in• Worker-owner receives a portion of the

revenue after expenses• Conventional businesses refer to this as profit• Co-ops call it surplus

Arizmendi Bakery

Worker-Controlled

• Democratic decision– one worker-member = one vote

• Worker-Control takes many forms depending on the size and type of business

• Each business creates the structure best suited to their needs

Democratic Workplaces

• Cooperatives: “one member, one vote”• Collectives: democratic but not owned by• LLCs: shared ownership, protected debt• Democratic ESOPs: usually own stock and

share profits

Types of Worker Co-ops

• Service: housekeepers, taxis..• Retail: grocery, bakeries, bookstores…• Health Care: nursing, Clinics, bodywork..• Skilled trades: printing, plumbing…• Manufacturing & engineering: fabrication...• Technology: web hosting...• Education: Charter schools…• Media and the arts: designers, galleries…

Questions to ask yourselves

• What kind of business do you have in mind?• What are your goals?• Does the Co-op model fit those goals?• How many people are currently involved and

who else do you hope to involve?• Do you have the skills to do a feasibility study

or business plan?• What assistance are you going to need?

More Questions

• What kind of organizational/management structure?

• Do you have capitalization lined up?

Thank You!

Eric Bowman & Teresa Youngeric@nwcdc.coop | teresa@nwcdc.coop

Northwest Cooperative Development Center1063 Capitol Way S # 211 Olympia, WA 98501

360.943.4241 | www.nwcdc.coop

Fostering community economic development through the cooperative business model