Webinar: Poverty Alleviation and Systems Change with Worker Cooperatives

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A time-tested approach to community economic development internationally, worker cooperative businesses are making inroads in the United States with regional initiatives in New York City, Madison, the Bay Area, and rural areas in the South. In this webinar, we aim to introduce worker-cooperative development as an innovative approach to poverty alleviation in U.S. communities through its focus on community wealth-building through worker-ownership and democratic decision-making. We'll explore case studies to explore how funders and citizens can learn from what has been done and take advantage of new opportunities to support real change.
  • 1. POVERTY ALLEVIATION AND SYSTEMS CHANGE WITH WORKER COOPERATIVES EPIP Webinar May 25, 2016 EPIP Host: Biz Ghormley Presenters: Anh-Thu Nguyen, Brendan Martin, Emma Yorra, Melissa Hoover, Omar Freilla and Wayne Ho
  • 2. 2 Emerging Practitioners in Philanthropy (EPIP) is a national network of foundation professionals, social entrepreneurs and other change makers who strive for excellence in the practice of philanthropy.
  • 3. 3 We provide a platform for our community to: Connect with others Learn & practice leadership skills Inspire emerging ideas in the social sector
  • 4. Get in touch! Please reach out with any questions or to learn more about membership! Biz Ghormley biz@epip.org Director of Operations & Member Services
  • 5. What’s Next? • Next EPIP Webinar! • Leveraging Service Providers and Vendor Relationships for Social Impact – June 8, 3pm • All Events • epip.org/events • EPIP Annual Conference •  September 13-15, 2016 in Baltimore, MD •  http://www.epip.org/2016_national_conference
  • 6. Housekeeping •  Use the question box for •  Technical difficulties •  Comments •  Content questions for Q&A •  Polls and questions are anonymous •  Use #EPIPwebinar to join the conversation on social media •  This webinar will be recorded •  Complete the post-webinar survey, please!
  • 7. Speakers Anh-Thu Nguyen, We See Beauty Foundation Brendan Martin, The Working World Emma Yorra, Center for Family Life (CFL) Melissa Hoover, Democracy at Work Institute Omar Freilla, Green Worker Cooperatives Wayne Ho, FPWA
  • 8. A Strategy for Inclusive Economic Development WORKER COOPERATIVES
  • 9. Our mission: Expand the promise of worker ownership to communities most directly affected by social and economic inequality Focused on STRATEGY, SCALE and EQUITY
  • 10. WHAT IS A WORKER COOPERATIVE? A worker cooperative is a values-based business that is owned and controlled by its members, who work in it. •  Members invest and share profits •  Democratic decision-making Impacts of worker-ownership •  Workers have more say in their working life, creating higher-quality jobs •  Workers build wealth through business ownership in addition to wages •  Retained profits keep more dollars within the community
  • 11. Labor-intensive industries People locked out of the job market First-time entrepreneurs Contractors and contingent workers Values-based businesses GROWING INTEREST IN WORKER OWNERSHIP Grow & retain local business
  • 12. Cooperative Capacity 1 Business Development 2 Ecosystem Development 3 Inside the business The business Outside the business WHAT IS COOPERATIVE DEVELOPMENT?
  • 13. Invests Time Invests Capital LOW TOUCH HIGH TOUCH COOPERATIVE DEVELOPMENT SPECTRUM Coop developer as coach Training & coaching “Who comes in the door” Entrepreneur-centered Broad impact: stability Coop developer as entrepreneur Management expertise “Build and recruit” Industry/market-centered Deep impact: mobility
  • 14. Arizmendi Association: Incubated industry franchise model DEVELOPMENT MODELS for worker cooperatives Investment in Enterprise $850,000 Training labor $150,000 Management labor $100,000 Buildout/equipmt $550,000 Working capital (equity) $50,000 Sources Member fees $150,000 Business loan $700,000 Timeline: 24-36 months overall, 18 months to maturity Impact 15-25 living wage jobs, with member capital accts $2M revenue by Year 5 % of surplus back to the system
  • 15. GROWING INTEREST IN CITIES •  New York City Council: $2.1M for worker cooperative development 2015-16, up from $1.2M in 2014-15 •  Madison, WI: $1M/year for next 5 years for cooperative development •  Cleveland government agencies, foundations, and anchor institutions •  Minneapolis, Austin, Rochester and Reading are in pilots •  Vermont and Ohio: state-funded employee ownership centers •  EDOs and SBDCs in Washington, Oregon, Pennsylvania, Kentucky, and New York offer info about employee ownership
  • 16. OVERVIEW Growth of worker cooperatives
  • 17. Some examples of worker cooperatives in the US Namaste Solar, Boulder, CO Isthmus Engineering, Madison, WI Weaver Street Market, Chapel Hill, NC Coop Home Care Associates, Bronx, NY
  • 18. Q&A Melissa Hoover, Executive Director Democracy at Work Institute www.institute.coop mhoover@institute.coop (415) 379-9201 ext. 1
  • 19. COOPERATIVE DEVELOPMENT PROGRAM Center for Family Life Cooperative Development Program Emma Yorra May 25 2016
  • 20. Center for Family Life | Cooperative Development Program Center for Family Life’s Cooperative Development Program •  In the Sunset Park community for 38 years •  Currently Supporting 8 existing & 2 new coops in development, and a network of cooperatives with 260 worker owners •  CBO training program: 21 organizations trained, 15 coops developed/ in process •  New projects: political education fellowship, replication, tech platform
  • 21. Center for Family Life | Cooperative Development Program What are the successes? •  Provide an alternative in workforce development for community members •  Empower workers to take ownership over their business and their lives – Dignified, stable and secure work – Higher wages – Workers have a voice that counts
  • 22. Center for Family Life | Cooperative Development Program CFL’s Cooperative Development Program
  • 23. Center for Family Life | Cooperative Development Program CFL Coop Member Demographics 5 of women are the sole contributors to their households 22% 23-58 years Age Range: Average age: 37 years Range of number of children: 1-4 children Average number of children: 2 children
  • 24. Center for Family Life | Cooperative Development Program Safe working environment with 100% of payment going directly to member providing the service PotenLal for exploitaLon and only a small percentage of the income going to the person providing the service Leadership opportunity and voice to make decisions within the coopera>ve Low-skilled posiLons 6 Prior to Coopera>ve ABer Joining Coopera>ve Business Owner who provides services to clients Paid employee who works for a boss Average hourly wage: $20.78 Average hourly wage prior to coop: $10.76 Environmentally Conscious Cleaning, Child Care, or Elder Care Most common jobs/sectors prior to coop: Factory work, Cleaning, Sewing
  • 25. Center for Family Life | Cooperative Development Program
  • 26. Center for Family Life | Cooperative Development Program “When I worked alone as a house cleaner, I was oBen scared about safety or not gePng paid my full wage. Then, I earned $8 per hour, but now I average about $20 and feel safe and supported by all the women in the coop.” – Luz, Member Si Se Puede / We Can Do It! Housecleaning Coopera@ve
  • 27. Financing & Training! For Worker-Ownership!
  • 28. Why Worker Ownership Now!
  • 29. •  Crisis of inequality! Why Worker Ownership Now!
  • 30. •  Crisis of inequality! •  Crisis of exclusion! Why Worker Ownership Now!
  • 31. •  Crisis of inequality! •  Crisis of exclusion! •  Crisis of “Silver Tsunami"! Why Worker Ownership Now!
  • 32. TWW Presentation!
  • 33. TWW Presentation! •  Cooperative Financing! $$
  • 34. •  Cooperative Conversion! TWW Presentation! ! ! ! ! ! ! ! •  Cooperative Financing! $$
  • 35. The Working World! •  Over 1,000 investments!
  • 36. The Working World! •  Over 1,000 investments! •  250 Worker-owned businesses!
  • 37. The Working World! •  Over 1,000 investments! •  250 Worker-owned businesses! •  98% Success Rate!
  • 38. Cooperative Finance Mondragon!
  • 39. Cooperative Finance !
  • 40. Cooperative Finance ! •  Key to coop development!
  • 41. Cooperative Finance ! •  Key to coop development! •  Community Benefit!
  • 42. Cooperative Finance ! •  Key to coop development! •  Community Benefit! •  Active business assistance!
  • 43. Cooperative Finance ! & Philanthropy!
  • 44. Cooperative Finance ! & Philanthropy! •  Grants for business assistance!
  • 45. Cooperative Finance ! & Philanthropy! •  Grants for business assistance! •  Capital to benefit community!
  • 46. Cooperative Conversions! ! ! ! ! ! ! !
  • 47. Cooperative Conversions! •  1M small business closing!
  • 48. Cooperative Conversions! •  1M small business closing! •  Major creator of good jobs!
  • 49. Cooperative Conversions! •  1M small business closing! •  Major creator of good jobs! •  Workers are pathway out!
  • 50. Cooperative Conversions! •  Billions of dollars in ! capital is needed!
  • 51. Cooperative Conversions! ! The economic crisis of our generation! or ! the opportunity of our future!
  • 52. Since 2003 Building a green and democratic economy in the Bronx
  • 53. Evolution of a Co-op Development Strategy Create Model Co-ops A Co-op On Every Block Raising Awareness; Co-op Academy & Post- Academy Support GWC as Entrepreneur GWC Grows Co-op Entrepreneurs Coming up with idea; Planning; Fundraising; Recruitment & Training; Management 2012 to Present2003 to 2010
  • 54. Accomplishments 21 worker cooperatives through the Co-op Academy Food: B Blossom (catering) * Chilerox (mfg) * Ginger Moon (personal chefs) * White Pine Community Farm (production) Health: Uptown Village (doulas) * Elevate NYC (massage) Arts: Ometeotl (crafts) * The House of Spoof Collective (graphic design & photo)* Revolutionary Seeds (crafts) * Cultural Workers Cooperative (arts educators) Education: The Bronx Unschool School (K-3rd grade) * Over & Above (nursery school) Technology: Bits & Bites Tech Cafe (adult computer skills training & cafe) * Technum (air conditioning & refrigeration repair) * HTINK (tech ed.) Personal Services: Bio-Classic Cleaning (residential/commercial cleaning) * Caracol Interpreters Cooperative (interpretation/translation) * Diaspora Destinations (travel) * Victory Bus Project (transportation) Manufacturing/Design: POLIDO (skateboard design) * Syllable (screenprinting)
  • 55. Accomplishments ● Co-op Academy replicated in seven U.S. cities ○ Cooperative Business Institute - Cooperation Texas (Austin, TX) ○ Worker COOP Academy - Sustainable Economies Law Center (Oakland, CA) ○ Co-op Academy - Worcester Roots Project (Worcester, MA) ○ COLORS Co-op Academy - Restaurant Opportunities Center (Detroit, MI) ○ Cooperative Business Academy - Cooperative Dev. Institute (Willimantic, CT) ○ Cooperative Design Lab - Cooperative Fermentation (New Gloucester, ME) ○ Cooperative Business Academy - Center for Workplace Democracy (Chicago, IL) ● Created 1st ever student-owned cooperative based in a high school ○ Syllable - silkscreening business at Bronx Compass High School.
  • 56. What’s Working ● Lean Startup for the Co-op Academy ● Raising public awareness of worker cooperatives ● Partnerships that expand our ability to provide support ● A growing network of older co-ops supporting newer co- ops
  • 57. Abandon the idea that low-income people of color don’t have what it takes to start a business and need someone white, wealthy, and well connected to do it for them. How Can Philanthropy Help? Fund Co-op Academies & Post-Academy Support Then...
  • 58. Federa&on of Protestant Welfare Agencies Worker Coopera&ves: Policy and Advocacy Landscape
  • 59. Building a City of Equal Opportunity •  Strategic Direc+on •  Worker Coop Report •  New Mayoral Administra+on and City Council •  Innova+ve solu+ons to address poverty and income inequality
  • 60. Promo&ng Collec&ve Impact •  Coali&on of 29 organiza&ons: worker coop developers, public policy, and community- based organiza+ons •  Backbone support: energize the coali+on, create shared vision/outcomes, and navigate government
  • 61. Advoca&ng for City Council Funding •  Year 1 (FY14-15): $1.2 million (11 partners) •  Year 2 (FY15-16): $2.1 million (14 partners) •  Year 3 (FY16-17): $3.8 million (22 partners)?
  • 62. Working with Government •  Administering Agency: – NYC Department of Small Business Services •  Interest from: – NYC Housing Authority – Department of Consumer Affairs – Mayor’s Office of Immigrant Affairs – Mayor’s Office of Contract Services – NYC Economic Development Corpora+on
  • 63. Advoca&ng for Policy Changes •  Victory: – Intro 423 (2015) – repor+ng bill to track city contracts and TA services for worker coops •  Sample Policy Changes: – MWBE status vs. Worker Coop status – Public procurement and contracts – Capital gains exemp+on and guaranteed public loan fund for coop conversions
  • 64. Challenges with Public Funding •  Strict Guidelines: – Direct services only – Low overhead •  Procurement Process: – Slow contrac+ng and reimbursements •  Funding Gaps: – Coali+on coordina+on, administra+on, research, and policy advocacy
  • 65. How Funders Can Help •  Make connec&ons: Help bring worker coopera+ves into dialogue with economic, community and workforce development •  Invest in capacity building: Offer stronger technical assistance to unlock greater capital investment •  Invest in the ecosystem: Support ins+tu+ons that are cri+cal to the growth of this young field •  Align investment and impact: Define the impact you seek, and invest strategically for the long term
  • 66. Funder Perspec,ve | Learnings + Takeaways Lessons learned as a funder working with worker coops •  No such thing as a silver bullet. •  Worker coopera,ve development and funding is an extended process. Pa,ent capital and a tailored, context-specific approach are essen,al. •  You’re helping develop (sustainable) businesses. Treat them like one. Opportuni,es + Challenges •  Suppor,ng cultures of entrepreneurship •  Facilita,ng sustainable business development in low-resource communi,es •  Access to investment capital, customized technical assistance, business exper,se and mentorship •  Mission + market-oriented approach to coopera,ve development. •  Engaging stakeholders and allies to nurture coopera,ve businesses •  Anchor ins,tu,ons, ecosystem development •  Community engagement with coopera,ve businesses—connec,ng to aligned networks
  • 67. •  Leveraging procurement/purchasing power •  Low/no-interest loans to worker-coops and support ins,tu,ons •  Technical assistance, organiza,onal advising and leadership development •  Access to networks and leveraging social capital •  Educa,on on worker-coopera,ve businesses within communi,es, movements, industries and entrepreneurial networks. Engaging and suppor,ng coopera,ve development: More than just grant $$$
  • 68. What’s Next | Philanthropic Engagement with Worker Coopera,ves Inquire | Ask ques,ons about con,nuing needs and gaps within the worker-coopera,ve space, as well as failures and room for improvement both for funders (in measuring impact) and with worker-coopera,ve developers (in mee,ng objec,ves.) Connect | Engage and facilitate dialogue between worker-coopera,ves and poten,al allies/stakeholders in public, private, and philanthropic sectors. Educate yourself, your communi,es and economic development ini,a,ves on worker coopera,ves and how they can be a good fit for mission. Align | Make sure mission, impact, and investment are in-sync: If worker-coopera,ve support is an effec,ve strategy for your organiza,onal mission and goals. Consider challenges and opportuni,es to more deeply engage with worker-coopera,ves. Define the impact you seek and invest strategically for the long term. Invest | Not just directly with worker-coopera,ves, and not just with money! Consider mentorship and leadership development, crea,ng awareness, building networks and ecosystems, suppor,ng growth-oriented ini,a,ves to nurture this emerging field.
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