Resources and guidance for community wealth-building: Co-ops, Social Enterprise, and so much more
By Shawn Stone
Progressive business comes in many forms, but you'll inevitably find yourself drawn to some ideas more than others. You don't have to create a utopia; you can start with the few ideas that grab you. Community wealth is only one such idea. Take a look below to see if aspects of community wealth speak to you...
First, what is community wealth?
"A (community) wealth strategy aims at improving the ability of communities and individuals to increase asset ownership, anchor jobs locally, expand the provision of public services, and ensure local economic stability."
Community-Wealth.org is a website that offers resources and guidance for all shapes and sizes of community wealth strategies. On a large scale, community wealth strategies combine the efforts and resources of many different organizations, as with The Cleveland Model and The Mondragon Cooperative. Unless you're a city planner, a politician, or exorbitantly wealthy, that's aiming a little high.
Name one problem a community yacht and a rum ham can't solve.
Let's start small. Here are three ways you can create community wealth:
Co-ops are businesses that are owned and governed by their workers or patrons. Rather than existing to create wealth for investors, co-ops exist to improve the lives of their workers and patrons. They tend to create ethical, long-lasting businesses while encouraging a devoted and happy workforce.
Worker co-ops are democratically governed, with each member holding one vote. Members elect a board responsible for establishing policy and selecting management. From this point, managers handle the day-to-day needs as with a traditional business. Structures vary widely depending on business size and culture, but often share profits based on a formula that takes W-2 wages, working hours, and seniority into account. These structures can be really simple, or get highly intricate and creative.
Cabot Creamery is a pretty famous co-op brand in the U.S. you may have seen at your grocery store. And speaking of grocery stores, an example of a patron-owned co-op is a food cooperative, in which member patrons band together to create a socially conscious alternative to corporate grocery stores. They are also democratically governed with each member voting on a board.
2. Employee Stock Ownership Plans
ESOPs are a common alternative to co-ops that often emphasize worker-ownership over worker-governance. They are commonly used as a means for larger business owners to "cash out" by selling their business to their employees. I stress larger businesses because it can be a fairly expensive model to start and maintain, but pays off in excellent tax benefits for the exiting owner and employees.
Since owners are only required to sell at least 30% of their company to create an ESOP, they or other investors can often retain control of the company. Despite this limited governance, employees still benefit from shared profits and typically earn more than in competing corporate businesses. Creation of an ESOP is often reflective of a strong, employee-centered culture.
My first encounter with an ESOP was when I interviewed the leadership of PadillaCRT, the largest employee-owned PR firm in the U.S. I was floored by their thoughtful dedication to their culture and employees. Those conversations were a huge inspiration as I drafted my own business ideas that eventually led to creating the Money Earned community.
You mean I don't have to work solely to make someone else rich every day?
3. Social Enterprise
Social enterprises are businesses (either non-profit or for-profit) that work to create positive change in some fashion. Rather than relying on donations like a standard non-profit, they sell a good or service to earn their funding. Social enterprises represent a wide range of businesses, but typically focus on producing a positive good/service or raising money through their business to contribute to a positive cause. See my article on Certified Benefit Corporations for more info on the social enterprise movement.
What does Community-Wealth.org offer?
Calling Community-Wealth.org a robust resource for community wealth strategies would be an understatement. They've incorporated ideas and platforms I'd never even heard of, and done so in a thoughtful and helpful format. For whichever strategy you're interested in pursuing, they've laid out everything they could find:
Toolkits - These are designed to aid you with step-by-step guidance as you work to build your own unique vision for the strategy you choose. They're often a compilation of resources and guidebooks meant to give you a holistic understanding of the work ahead.
Best Practices - Case studies! All the case studies! See detailed examples of effective organizations using the strategies you hope to pursue.
Policy Guides - Each strategy has its own challenges with laws and regulations. Use these guides to connect you to the government agencies and resources you need to navigate rough legal seas.
Support Organizations - Some strategies have entire websites and organizations devoted to their specific needs. Find them all compiled together so you can soak up every bit of help available.
Research - Government or private, local or international, research can be key to unlocking the full potential for your strategy and promoting your idea to key stakeholders and influencers. People love to see the numbers.
Articles and Publications - You could and should use Google to read up on your strategy, but you can save a lot of time because they've already found a lot of the good content. Read up.
So does any of that sound good to you?
If so, go! On with you! Work with your friends and neighbors to make something special that stands the tests of time and leaves a legacy like no other. Don't just make money...Better the lives of your community, their children, and their grandchildren.
What strategy stood out to you? I'd love to hear from you in the comments.