Why Choose a Cooperative as a
Business Model?
Study Group: Cooperatives
Session 2
Why Choose a Cooperative as a
Business Model?
• What are the business model choices?
• Two Domestic Cases:
– Latino Community Credit Union
– Evergreen Cooperatives
• Questions for Discussion
Business Models in the U.S.
• Individual
• Partnership
• Limited Liability Company
• Corporation
• Cooperative Corporation
Source: http://www.evergreencoop.com/
Video Link: http://www.youtube.com/watch?v=sGToM_Nhss4
Frames: 2:10 to 6:15
Case: Latino Community Credit Union,
Durham, NC
• Why choose a cooperative – Credit Union – as
a business model?
– Lack of Access to the Mainstream Banking System
Case: Latino Community Credit Union,
Durham, NC
• Digging Deeper
– Common Bond: Hispanic Immigrants
– Background & Challenges:
• Immigrant status considered high risk
• No or high-interest banking services provided
• Lack of municipal, state and federal support to solve banking issue
• Immigrants carried cash and stored it at home
• Immigrants were targeted for theft crime, including murder
• Community-based institutions helped immigrants organize to address banking issue
• Negotiations with banks for services failed through
• Solution: A Credit Union
Ted Howard: http://en.wikipedia.org/wiki/Ted_Howard
Source: http://latinoccu.org/en/community/who-do-we-serve
Video Link: http://vimeo.com/14387332
Frames: 2:45 to 5:35
Case: Evergreen Cooperatives,
Cleveland, OH
• Why choose a cooperative – worker
cooperative – as a business model?
– “building employee owned businesses that were
designed to target procurement needs of the
anchor institutions, thereby not only redirecting
the procurement resources into the local
economy, but also building wealth and productive
assets that would be owned by local residents and
anchored in their communities.” (Iuviene, 2010)
Case: Evergreen Cooperatives,
Cleveland, OH
• Digging Deeper
– Common Bond: Stakeholders on the Economic Prosperity of the
Greater University Circle
– Background & Challenges:
• Post-industrial decline
• University Circle Development: Socioeconomic contrast between multi-million
dollar infrastructure in the center and poverty stricken conditions at the
margins
• Looking beyond infrastructure development: Program For The People
• Ted Howard (Democracy Collaborative) and India Pierce (Cleveland
Foundation): creating community wealth
• Solution: Employee-Owned Businesses
Questions for Discussion
• (On LCCU Case) What would have happened if the immigrants had
access to the mainstream banking system? Would the cooperative
model still have been relevant?
• (On Evergreen Cooperative Case) Given the length of the effects of
post-industrialism, why has the cooperative model become an
alternative now, and not several years ago?
• (On Evergreen Cooperative Case) What is Evergreen's policy in
hiring formerly incarcerated people: do they ask for criminal
background info, how they consider it? Yes. Need to know the truth
behind their conviction history.
• (On Evergreen Cooperative Case) How many formerly incarcerated
people Evergreeen employs? ~25
• Other Questions…
Sources
• Kimberli A Zeuli and Robert Cropp. Cooperatives:
Principles and practices in the 21st Century
• Espinoza-Toro, Carlos. Can The LCCU and
1199SEIU be partners? June 2008
• Latino Community Credit Union Website
• Iuviene, Nicholas. Building A Platform for
Economic Democracy: A Cooperative
Development Strategy for the Bronx. June 2010
• Ted Howard