Co-op Training Module II
Unit 1
Co-operatives & the Community
Development Process
Co-operative Development

A Co-operative
“is an autonomous association of persons united
voluntarily to meet their economic, social, and
cultural needs and aspirations through a jointlyowned and democratically-controlled enterprise.”




Legally incorporated enterprise/business
Owned & democratically controlled by people seeking to
satisfy a common need for service
Structure can address both social & economic goals to
improve the quality of life for members and the community at
large
Co-op model can be applied to any community economic
venture or social activity (i.e. fisheries, health care, ecotourism, etc)
Community Development

Community Development
“the collective process by which residents and
communities become responsible for, organize for,
empower themselves, plan for and achieve
sustainable social, economic, and environmental
development and a substantially self-directed
future.”
 Focused on the sustainability of the cultural, economic
and social well being of rural communities
 Seeks to empower people to participate in the future
of their community
 Encourages collective action to improve the quality of
life for community residents
Community Economic Development

Community Economic Development
“is a process which focuses on wealth creation, job
creation, value-added activities, business and cooperative development, and enhanced viability
for the community, the region and the province.”
 Enables communities to improve and solidify local
economies
 Based on collective action and integration social,
cultural & environmental aspects of community life
 Primarily driven by economic goals
 Seeks to build human resource capacity
Shared Principles & Values
Both co-operatives & community development
agencies share the following principles & values:
o A “bottom up” approach to development
o
o
o
Community engagement and control
o
o
o
Ensures community engagement in planning and
implementation of initiatives
Encourages collective action
Elects local boards of directors to ensure democratic
governance
Public consultation a norm
Building community capacity
o
o
Provides training & experiential learning activities for
local volunteers
Creates networks of skilled and committed people
What Co-ops Bring to the CD Process

An alternative business model which is:




An extension of community development
principles into the business sector
A tool that can deliver community identified
service requirements
A model that facilitates community ownership of
business enterprises
A mechanism for generating community
investment
Co-op Training Module II
Unit 2
Co-operative Development
In Newfoundland & Labrador
Co-ops: Meeting Community Needs






100 years of serving needs of Newfoundlanders &
Labradorians
Systemic poverty & lack of services precipitated
formation of first co-ops
Hundreds of co-ops & credit unions formed in 1940s
1950’s and ’60’s brings new era of community
development (i.e. MUN Extension, etc)
Smaller co-ops fade into history while new ones
form to meet changing economic & social conditions
(i.e. Fogo)
1970’s and ’80’s see resurgence of co-op
development (i.e. Petty Harbour Co-op, Eagle River
Credit Union, etc)
Co-ops & Community Development
Today



Currently, over 100 co-op provide a variety of
business and community services across the
province
Changing demographics & society needs create new
co-op opportunities (i.e. fur farming, blueberry
production, etc)
Regional & community development groups use the
co-op model to respond to needs (i.e. Tourism
marketing, Municipal Servicing, etc)
Engagement of CD Agencies in
Co-op Development

CD Agencies that have assisted with
co-op formation include:





Fishermen’s Union Shrimp Company – Eagle River
Credit Union
Gambo-Indian Bay Development Association –
Blueberry Industry Co-op
Town of Tilting – Women’s Food Catering (Workers)
Co-op
Random North Development Association – Mink Pelting
Co-op
Baie Verte Consumer’s Co-op – Advocate Youth
Services Co-op
Building Co-op Development
Partnerships



Co-op business model complements efforts of
community development agencies
CD agency support continues to be an important
element of the co-op development process
NLFC values its working relationships with;





Regional economic Development Boards
Regional Development Associations
Municipalities
Industry Associations
Key CD agency roles include;


Enhancing public awareness of the co-op option
Identifying potential co-op development opportunities
Co-op Training Module II
Unit 3
What Makes Co-ops Unique?
Co-ops are Community Owned &
Controlled Businesses




Co-ops strive to provide high quality, cost effective
services for member owners
Private sector’s primary focus is to maximize profits
Co-operatives focus on the economic, social and
environmental benefits to the local community
Co-operatives are not entirely creatures of the
business world, nor of the community, but rather a
combination of the attributes and functioning of both
Co-ops Require Community Investment




As a business, co-ops require capitalization from
their members to ensure business success
The mobilization of local capital is key to local
ownership and control
Member investments create long term stability is
key to financing future development/expansion
Members tend to re-invest co-op profits to enable
leverage of funds from other agencies (i.e. banks,
government, etc) for operation activities
Co-ops Generate Profits for the
Community





Co-ops distribute profits based on the members use of
services, not on the amount of capital invested
Co-ops often use part of their profits to support other
community development projects
Historically, profits generate by large private sector
operations (i.e. fisheries, retail, etc) are not retained in
the local economy/province
Co-operative maximize retention of profits to the benefit
of its members and the local economy
Some co-ops (i.e. Fogo Co-op) direct funds from profitable
activities to less profitable ones to maximize community
employment opportunities
A Legislated Operational Framework



Co-ops are legal corporate entities under provincial
& federal legislation
The “Co-operatives Act” protects the unique aspects
of the co-op business structure and operations & the
rights of member/owners
Co-op legislation provides more safeguards to
protect the interests of members and those who
conduct business with a co-op than private sector
legislation
Priority is on Member Services



A co-op’s first priority is to serve the needs of its
members by providing high quality, cost effective
services
The members always have direct control over what
services are provided, how they are delivered and
maintained
The needs of the members and the community are
always balanced against the fiscal sustainability of
the co-op enterprise
Co-op Training Module II
Unit 4
Steps in the Development Process
Opportunity Identification

Key Questions



Would the recipients of the service, i.e. the
potential co-op members, be better served by
being the owners and having control of the
operations of the enterprise?
Are there potential sources of technical
assistance and advisory support to help with the
co-op development process?
Will the services provided by the co-op provide a
clear and direct benefit for potential members
that would justify their investment in the
enterprise?
Initiating the Developing Process





Initial meetings of co-op proponents
Formation of a Steering Committee
Proposed business services /products are identified
Development of a the co-op concept paper and
initial business viability assessment
Enlist the support and participation of the NLFC &
other key development stakeholders
Building the Co-op’s Structure

Steering Committee (& RDN Member):
 Identify/recruit potential members
 Identify potential funding sources
 Develop the co-op’s By-Laws
 Draft operational Policy & Procedures Manual
 Initiate the development of a Business Plan
Developing the Business Plan





Steering Committee must be actively engaged in the
process
Seek advice on selecting the appropriate consultant
Set clear targets for equity investments by members
Consult with potential funding partners on their
information needs
Make sure plan is realistic and demonstrates that
the enterprise can be self-sustaining
Incorporating & Launching the Co-operative





Early engagement & consultation with the Registrar
of Co-operatives
Advice & guidance of NLFC and RDN member will
help ensure approval of incorporation
Once incorporated, steering committee evolves into
the co-ops Provisional Board
Board ensure “doors” are ready to be opened (re:
operations, administration, physical plant and
equipment , etc)
Board organizes the Co-op’s first annual meeting
during the first year of operations
Ongoing Operations





“New” Board is elected & meets regularly to address
ongoing operational & administrative requirements
Training needs of Board, Management & Staff are
identified and addressed
Board establishes committees to share workload
(i.e. Executive, Finance, Member Relations, etc)
Communications with members, partners and the
local community becomes a priority
Operational/Financial success requires full member
participation and support
Co-op Training Module II
Unit 5
Co-op Development Support
Services
Training & Development Advice




Newfoundland-Labrador Federation of Cooperatives:
 information, training and development advice for
existing co-ops and groups developing new co-op
enterprises
Regional Co-op Developers Network:
 eight (8) regionally based INTRD staff providing co-op
development support services at the community level
Community Capacity Building Program:
 INTRD program which delivers community workshops,
including 3 co-op development training modules
Canada/Newfoundland Business Service Centres:
 Business support services, including information about
the co-op business option
Co-op Enterprise Financing Support

Programs & services available to private companies
are generally available for co-ops. Programs
specifically available to co-ops include:



Co-operative Equity Investment Fund (CEIF): A
provincial program which provides equity contribution to
assist established and emerging co-ops to finance start-ups
and expansions in the province.
Co-operative Development Initiative (CDI): A national
program which provides non-repayable contributions for
groups engaged in the establishment of new co-ops.
Regional Sectoral Diversification Fund (RSDF): A
provincial program which provides non-repayable
contributions to assist with development of not-for-profit
community development co-ops.
Co-op Training Module II
Unit 6
Community Development Partner
Support
Public Awareness

CD agencies and industry/sector agencies can
be more involved in supporting co-op
development by:
 Ensuring that Boards, Staff and members
become well versed on the benefits of the co-op
model through available training programs
 Developing partnerships with the Federation and
the RDN who can advise and support regional
and community efforts
 Ensuring that information on co-op are included
in public consultations, web sites,
business/economic workshops and newsletters
Opportunity Identification

Ask the question “Can the co-op model benefit
this social and/or economic opportunity which
we have identified by…
 Reviewing community, municipal or strategic
plans to determine if there are activities,
economic targets or social objectives that might
utilize the co-op model
 Contacting the Federation or local RDN
representative if your organization is uncertain if
a co-op is a viable or realistic option
Leadership & Coordination





Assist interested people to form steering committees
to explore the co-op option
Help these committees access necessary resource
supports
Help generate community interest and support as
the committee moves forward
Provide administrative and logistical support (i.e.
meeting rooms, photo copying, etc)
Become a member of the proposed co-op, or agree
to provide ongoing support to their efforts
Public Confidence Building



Encouraging fledging co-ops groups that need
nurturing and “hand holding” to build confidence
Help these groups access team building, enterprise
development advice and other training supports to
assist with the development process
Facilitating increased public awareness of the co-op
model and providing initial encouragement and
support will help ensure a solid foundation for newly
developing co-op enterprises
Ongoing Support & Aftercare




Become knowledgeable about existing co-ops in
your region or industry sector
Consider how your CD agency might be of
assistance in supporting ongoing co-op operations.
Encourage co-ops to participate in your regional
planning and development activities
Make available your agency’s services to support coop activities as required
Co-op Development – The Future

The province’s network of community development
& industry sector agencies can play a more proactive role in supporting co-op development because
it:




Fits well with community development principles &
values;
Is supported by both provincial & federal government
policies & programs
Has a demonstrated a capacity to help communities
achieve their development goals and
Support services are available to assist agencies
working with groups engaged in the co-op
development process.
Co-op Development - Some Active
Industry Sectors











Organic foods
Farmer’s markets
Wind Energy
Film production
Community Theatre
Car Sharing
Forestry
Youth Advocacy
Micro-breweries
Broadband Services
Community Services











Cranberry Production
Fur Farming
Beef processing
Food catering
Arts & Crafts
Funeral Services
Elder care
Blueberry Production
Health care
Outdoor Equipment
Municipal services