Building Community Wealth Through Cooperative Ownership Ted Howard - - PowerPoint PPT Presentation

Building Community Wealth Through Cooperative Ownership

Ted Howard 28 January 2013 Cardiff, Wales

BUILDING COMMUNITY WEALTH TO TRANSFORM CLEVELAND AND CHANGE LIVES

EVERGREEN COOPERATIVE INITIATIVE

Create Jobs Generate Wealth for Residents Stabilize Neighborhoods

Evergreen Design Elements

Community Wealth Building that:

• promotes broader ownership of productive assets
• anchors capital and jobs locally
• stops the leakage of dollars from communities
• supports individual and family wealth building
• reinforces local resilience
• generates revenues to finance public services
• leverages anchor institutions for community benefit
• contributes to local economic stability

Continuum of Wealth-Building Strategies

BROADENING OWNERSHIP OVER ASSETS AND CAPITAL

COMMUNITY INDIVIDUAL GOVERNMENT

Family Wealth Building Shared Equity Community/Worker Ownership Public Ownership

• r Investment

–Individual Development Accounts –Microenterprise –Family Self-Sufficiency Program –“Baby Bonds” & child savings accounts –Earned Income Tax Credit volunteer assistance programs –Alternatives to predatory lending –Nonprofit financial education programs –Community Land Trusts –Limited Equity Cooperatives –Deed restriction (inclusionary zoning) –Mixed ownership (Market Creek) –Program-Related Investments –CDC/CDFI equity investments or joint ventures –Community benefits agreements –Anchor institutions (eds, meds, churches, museums, libraries) –ESOPs or worker cooperatives –Credit unions –Community corporations –CDC or CDFI direct

• wnership

–Social enterprises –Commons-based enterprises (e.g., Wikipedia, Creative Commons licenses) –Municipal enterprise –State & local venture investments –Public pension fund ETIs (economically targeted investments) –Public leases: land & transit development –Stock warrants in exchange for granting tax breaks (fair exchange) –Trustee ownership (e.g., Alaska Permanent Fund)

The Democracy Collaborative www.Community-Wealth.org

Community Wealth Building Knowledge/Action Hub

Integrated CWB Programs, Research & Advisory, Metrics

What is an Anchor Institution?

• “Sticky capital” that doesn’t get up and leave
• Typically among the largest employers in most

major metropolitan areas

• Local economic engines: employ large numbers of

people; purchase large amounts of goods & services

• Vested interest in surrounding communities
• Typically non-profit
• Largely untapped potential

Types of Anchor Institutions

• Universities
• Hospitals
• Local Governments
• Museums
• Performing Art Centers
• Sports teams
• Other Cultural Institutions (theaters, zoos, etc.)
• Churches/Mosques/Temples/Synagogues

Economic Dimension

• f “Eds & Meds”
• Annual Procurement:
• Hospitals: annual procurement $750 billion
• Universities: $373 billion
• More than $1 trillion; 6% of GDP
• Endowments:
• Hospitals: $500 billion
• Universities: $300 billion

Benefits of Local Procurement

Local Procurement benefit to anchors:

Better vendor servicing/better access to critical goods and services in crisis situation/decrease carbon footprint/lower costs

Local Procurement benefit to community:

Increasing local employment/ stabilizing neighbor- hoods Building a network of inter- connected vendors, purchasers, financial institutions, training and higher education

Leveraging University Resources for Community Economic Benefit

• University of Pennsylvania: procurement, community

school, community health program

• University of Cincinnati: $100 million in mixed use

development

• Duke: housing land trust, Latino credit union

financing

• University of Illinois: CDC, $24 million mixed-use

project

• Trinity College: endowment investment
• Portland State: training for community-based
• rganizations, neighborhood redevelopment

Leveraging Hospitals for Community Economic Benefit

Henry Ford Hospital (Detroit)

• Incentivized local hiring (7% of exec bonuses linked to these goals)
• Pays local vendors a month in advance to provide working capital
• "Live Local, Buy Local, Hire Local" initiative

Sinai Health System (Chicago)

• Incubated North Lawndale Employment Network, owner of Sweet Beginnings, a

social enterprise employing 74 people

• Renovated Hollenbach Sausage Factory brownfield site ($7M project). 12K sq ft.

building now houses Center for Families and Neighbors Health Alliance (Cincinnati, OH):

• Set and exceeded a $23 million target for purchasing from local minority

suppliers. Catholic Healthcare West (San Francisco)

• Community Investment Program provides low-interest loans: Since 1992, $49

million loaned out to 88 different nonprofit organizations

University Hospitals (Cleveland) Vision 2010

Construction of major new facilities = $1.2 Billion

93% local

contractors

17% MBE 7% FBE

18% of workers

local residents Enduring results: worked with 110 small companies,

now work with 30

• n routine spend

Results exceeded goals:

BUILDING COMMUNITY WEALTH TO TRANSFORM CLEVELAND AND CHANGE LIVES

EVERGREEN COOPERATIVE INITIATIVE

Create Jobs Generate Wealth for Residents Stabilize Neighborhoods

Cleveland Clinic

• 4. Cleveland Museum of Art

Veteran’s Affairs Medical Center University Hospitals

ANCHOR & CULTURAL INSTITUTION PROCUREMENT $3 Billion Annually

Neighborhood Challenges Neighborhood Challenges and Indicators

NEIGHBORHOOD CHALLENGES

VACANT LAND

POOR & UNSOUND BUILDING CONDITIONS

WATER SHUT OFFS / TAX DELIQUENCIES / FORECLOSURES

NEIGHBORHOODS AT RISK

STRATEGY

1. Focus anchor institution purchasing locally 2. Create new community-based, co-op businesses

• 3. Green

4. Link to expanding sectors of the economy (e.g., health, aging, energy, food, waste & green technologies) 5. Ensure financing and management to move to scale

OUR PRINCIPLES

• Co-ownership by co-op workers and other important

“stakeholders”

• Triple bottom line: community, environment, profit
• Great majority of our workforce hired from GUC

neighborhoods

• Linked to the supply chain of area anchor institutions
• Family supporting living wage & no-cost health care benefits
• Distribution of earnings into capital accounts (wealth building)
• Career ladders for workers
• Corporate culture of ownership, participation, transparency

and accountability

• Individual co-ops are part of a larger structure that ties them

together into a coordinated and integrated network (ECC)

• Create new jobs for neighborhood residents
• Anchor capital so it doesn’t get up and leave
• Promote asset accumulation
• Stop $$ from leaking out of NE Ohio
• Stabilize and revitalize neighborhoods
• Develop a replicable model for national impact

GOALS

Evergreen Cooperative Development Fund Evergreen Cooperative Corporation (ECC)

Cooperative Businesses

Evergreen Real Estate Evergreen Business Services

GUC Initiative

Transit-Oriented Development Education Housing Engagement

EVERGREEN COOPERATIVE CORPORATION

• Ohio nonprofit corporation awaiting 501(c)(3) status

from IRS

• Board includes anchors, funders, coops and

Cleveland-area businesses

• Provides overall strategic direction for Evergreen

system

• Keeper of the mission
• Owns 20% of each coop
• Based at NDC
• ECC has contracted with NDC’s

affiliate CCAC to manage ECDF

• Future: ECDF will exit NDC and

become a CDFI within ECC

• For-profit coops incorporated in State of Ohio
• Currently 3 businesses
• 80% owned by workers; 20% owned by ECC
• % of annual earnings contributed to ECC
• Board: 40% worker-owners; 40% ECC appointed;

20% other

• For-profit LLC owned by

ECC

• Provides shared services

(audit, HR, fin mgmt., etc.)

• Houses entrepreneurs and

CEOs

• Will have business

advisory council

• Holds GCG land
• May later control
• ther land in GUC
• May spawn nonprofit

land trust as needed

Explanation of Acronyms

CCAC Cleveland Cooperative Assistance Fund CDFI Community Development Financial Institution ECC Evergreen Cooperative Corporation ECDF Evergreen Cooperative Development Fund (non profit revolving loan fund) GUC Greater University Circle NDC National Development Council

Questions & Discussion

For more information: www.Community-Wealth.org www.Evergreencooperatives.com