The Quest for Capital

The final goal for the Blueprint for a Co-operative Decade focused on capital (although in a lot of ways, the other goals also touched upon capital as well). The goal states, “Secure reliable co-operative capital while guaranteeing member control”.

Starting a business still tends to draw start-up capital from the the following: friends, family, and credit cards. Although there have been changes to the landscape over the last ten years, most notably investor co-ops, the means of getting start-up capital for co-op ventures remains difficult.

This isn’t to say that there aren’t options and plans for the future. Shared Capital does everything that it can to support the co-op movement and definitely assists in conversions and other co-op development projects. The National Co-op Bank continues its efforts at this as well. But, as with co-op development, the demand for capital far outpaces the supply of capital.

Some exciting projects in the works include Co-op Exchange in the UK that will allow anyone in the world to invest in cooperative projects. The exchange promises to allow microinvesting by people at any economic level and this, in turn, can create a huge fund for co-ops. If the 1.3 billion co-op members each contribute just 1 penny (US), that $130 million for co-op capitalization. has also created a business accelerator model. This takes a cohort of co-ops through a process and helps them message to and find social impact investors. It is still in its infancy with the first cohort, but offers an exciting opportunity.

I believe that there is also an investment co-op program being formed in California, but I cannot remember its name and my attempts at searching on-line have not yielded any information.

Ultimately, though, the existing co-ops need to find a way to divert some of their member equity to funding new co-ops and helping existing co-ops expand. This is difficult, but the infrastructure already exists through the NCB, Shared Capital, and CDFIs. As I mentioned a couple of days ago, the economic power of the existing co-ops could fundamentally change the local economies where they are concentrated and this, in turn, would change the policy maker discussion about sustainable economic development. It is a fundamental part of the value of solidarity and the 6th principle of cooperatives.

I am hopeful that as we turn the page on the Blueprint for a Co-op Decade, the formulating strategies will come to fruition, but we also need to the leadership of existing co-ops to commit to investing in the co-op economy through development and solidarity funds. As has been pointed out a couple of times this week, the aggregate economic power of co-ops and their members could really “move the needle” on co-op development in the US and world-wide.

About John McNamara

John spent 26 years with Union Cab of Madison Cooperative and currently helps develop co-ops in the Pacific Northwest. He holds a Ph.D. in Business Administration and Masters in Management: Co-operatives and Credit Unions from Saint Mary's University.
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