Coop Leaders seek to reconnect with movement's social roots

Written by Steve Dubb

Nonprofit Quarterly

October 27, 2021

October is co-op month in the US, a time for co-op leaders to gather, even if gathering these days is hybrid or virtual. This year’s Co-op Impact conference, organized by the National Cooperative Business Association (NCBA), the US co-op trade association, centered on questions of co-op identity and meaning. Or, as Karen Zimbelman, a longtime food co-op trainer who was inducted this year into the national cooperative hall of fame, put it, “What are the times asking and demanding of us as co-ops today?”

The discussion around that question says a lot about the state of the co-op movement. Around the globe, as Anu Puusa, a Finnish co-op business scholar, noted in a virtual keynote session, co-ops are both ubiquitous and invisible. “Awareness of the model is at an alarmingly low level,” she noted, even in Finland, the “most cooperative country in the world.” Finnish co-ops have inspired US co-op advocates, but even in Finland co-ops are often “overshadowed by business forms that are capital-centric.” Puusa observes that while co-op numbers are impressive, co-op influence is harmed by a lack of member engagement. Many member-owners, she notes, “don’t feel an emotional bond or any connection, not to mention solidarity with other members.”

The United States is no exception to this dilemma. For example, 125.7 million Americans are credit union member-owners as of March 31, 2021. But how many of them know that they are member-owners of co-op businesses? One might make a similar observation about other co-ops—the more than 20 million owners of REI, for example, or the 42 million Americans who get their electricity from cooperatives.

How did this happen? Puusa, in conversation with US co-op scholar Jessica Gordon Nembhard, notes that co-ops have a “dual nature.” While credit unions and rural electric co-ops are nonprofits, most co-ops are for-profit businesses. Regardless of tax status, however, co-ops, like nonprofits, must balance margin and mission. “When times were better, cooperatives did learn to be efficient,” Puusa noted. “But I think that [profit-making] mode may have been left on a little too much,” leading to a decline in community engagement as a result.

For her part, Gordon Nembhard reflected that “some focus more on the business model and don’t focus on mutuality. Others focus more on the mutuality and democratic participation and don’t always have the business model strong enough.”

Both Gordon Nembhard and Puusa emphasized the vital role of education in stripping away narratives that naturalize capitalism as the only form of economic organization. As Gordon Nembhard put it, cooperatives are “strongest when people realize we don’t need capitalism. We don’t have to feel like only an exploitative system benefits—or can deliver—for us.”

A decade ago, it would have been unlikely to hear capitalism even mentioned at an NCBA conference. But the COVID economy and the growing movement against anti-Black racism have changed the tenor of the discussion significantly.

At another session, Esteban Kelly, director of the US Federation of Worker Cooperatives, interviewed Sara Horowitz, founder of the Freelancer Union. Horowitz noted, “So much has happened to the economy that is so punishing to workers … [We have to rebuild] civic infrastructure and start rebuilding it through unions, co-ops, and mutual aid.”

A Growing Black Cooperative Movement

If the national co-op conference touched on the relationship between co-ops and capitalism, a conference on the Black Cooperative Agenda, held one week earlier by the Network for Developing Conscious Communities, put that question front-and-center. On one panel, Dr. Henry Taylor, an urban studies professor at the University at Buffalo, remarked that, “We won’t confront capitalism without a cooperative movement.” He added, “We have to see cooperatives as an alternative to market capitalism…We are attempting to break the back of market-based capitalism.”

At another session of that conference, Kali Akuno of Cooperation Jackson—based in Jackson, Mississippi—offered a similar analysis:  “We are very clearly not trying to build cooperatives for cooperatives’ sake … [but to] build base foundations of anti-capitalist society.” The importance of cooperative and solidarity economy organizing, Akuno observes, is to inculcate ideas of transformation in practical, everyday activity. “Even with the most radical of ideas, it is easier to act your way into a new way of thinking than to think your way into a new way of acting,” Akuno contends.

Akuno acknowledges that there remains a long road ahead in this community-building work. “Our history is one of perpetual exploitation of our labor, bodies, mind, culture, and creativity,” he notes, and the threat of want “breeds a number of types of anti-social behaviors.” Akuno says he has often asked people, “Just because you have a Black-owned business, do you want to exploit your mother, your aunt?” As for the responses he gets, Akuno acknowledges that, “Some people will tell you straight up, ‘Yes.’ Akuno added that These are shallow notions,” of individual uplift that fail to get at the heart of undoing an extractive and exploitative economy and “create a living alternative we can all connect to.”

Achieving liberation, Akuno says, requires building an economy, where “we create our own value chains, our own supply chains, relationships of reciprocity and solidarity [and] not just financial exchange of goods. This is where we need to go to make this viable for millions of people.”

Pandemic Lessons: A Pivot to Social Justice?

At the NCBA conference, another panel focused on the theme of co-op responses to the pandemic. Among the speakers was Camille Kerr, a consultant who has supported the startup of ChiFresh Kitchen, a Chicago-based worker co-op founded by formerly incarcerated Black women.

Kerr noted that many worker co-ops, like the one that she helped start amid COVID, have thrived in the pandemic economy. “A lot of worker co-ops were able to pivot to serve their members and their communities …We’re small, nimble, and responsive to our communities …That’s what cooperatives do. You come together to meet needs.”

But Kerr also cautioned that for the co-op movement to be truly effective at promoting racial and economic justice requires more than good intentions. “People want to work at a social impact fund instead of building worker co-ops on the ground,” she noted. Not a lot of people with professional training like herself “want to be accountable to working class and poor folks.” Transformation, she notes, requires that “you center the decision-making of the folks who are directly affected; that’s how you cooperate. To recruit talent, we need an underlying shift—it is a generational task.”

Co-op Policy

Unsurprisingly, one area of focus for NCBA conference was on how public policy could support cooperatives. Discussion here centered in three areas: 1) state and local efforts, 2) implementing federal policy approved in the past year, 3) federal policy proposals contained within the pending infrastructure legislation. A few highlights:

State and local:  One growth area has been in nonprofit employee ownership technical assistance centers. The conference featured Guenevere Abernathy from the North Carolina Employee Ownership Center (NCEOC) and Jennifer Bryant, who leads the Greater Washington Center on Employee Ownership (GWCEO). Both centers are of recent origin. NCEOC launched in 2020 with support from national nonprofits and the city of Durham, which began to back employee ownership in 2018. GWCEO launched this summer, building on an existing employee ownership lending program of the Washington Area Community Investment Fund (WACIF), a local community development financial institution (CDFI). GWCEO serves not only the District of Columbia, but also northern Virginia and neighboring counties in Maryland.

New federal policy:  At the federal level, the conference highlighted two policies—a one-time $12 billion allocation for CDFIs made in the CARES 2 legislation of December 2020 and $5 billion approved in the March 2021 “American Rescue Plan” for Black farmers ($4 billion of which, however, is currently being held up by a set of lawsuits).

At the conference, Juan Fernandez of the Credit Union Association of New Mexico called the CDFI provision “a once in a lifetime opportunity” that opens the door for partnerships between loan funds and cooperatives. For her part, Dãnia Davy of the Federal of Southern Cooperatives/Land Assistance Fund detailed her organization’s efforts both to defend section 1005 (debt relief) against charges of discrimination and to ensure swift distribution of the $1 billion in technical assistance that is mandated by section 1006.

Pending federal policy:  Back in 2018, Congress passed the Main Street Employee Ownership Act, which was supposed to facilitate the use of US Small Business Administration (SBA) guaranteed loans to finance business conversions to employee ownership. However, this has been largely stymied by a lack of collateral; a $500 million provision contained within a $25 billion allocation to the SBA would help conversions access these funds and “level the playing field,” according to NCBA government relations director Kate LaTour.

Looking Backward to See Forward

The conference also recognized four longtime co-op leaders with induction into the US co-op hall of fame. This year’s class, included, in addition to Zimbleman, Vern Dosch, who for decades led a national rural utility support cooperative, the National Information Systems Cooperative; Andrew Reicher, executive director for the past 40 years of the Urban Homesteading Assistance Board (UHAB) in New York City, a group that helps create and sustain limited-equity housing co-ops; and Clark Arrington, a cooperative finance leader, who currents works for Seed Commons, a national network of community-based worker co-op loan funds.

In a panel held prior to their induction, the honorees offered remarks reflecting on both lessons learned and the state of the movement today. Dosch, for example, focused his remarks on the critical role that utility co-ops must play today to ensure universal broadband access throughout rural America. “If we don’t do it, no one else will,” he warned. Zimbleman emphasized the importance of developing vision by “leading while listening.” Reicher conceded that co-ops often fall short of their emancipatory goals but offered that he sees in the current moment “real interest in building and rebuilding and fixing what is wrong with the co-op model.”

For his part, Arrington called on conference participants to listen to young leaders and broaden their horizons. Social justice today, Arrington notes, “is much broader than co-ops.” It includes “gender, climate, sustainability, sexual preferences, solidarity economy, economic solidarity, social impact, and [narrowing] the wealth gap.” Co-op leaders today, he notes, are “looking at the economy more broadly … Cooperative is their business entity form, but it is also about these other issues.”