Worker Cooperative Development Models
.
.
This is an exciting time to be engaged with worker cooperatives. The worker cooperative model has stood the test of time; its foundations have been in place since 1844, when the Rochdale Pioneers developed their creative response to the suffering of displaced workers during the Industrial Revolution. Since 2008, the Great Recession has inspired more and more workers, advocates, and community developers to bring their creativity and energy to the next generation of the cooperative movement, fueling an explosion of co-op-related discussion and initiatives.
This pro forma template is intended to aid cooperative entrepreneurs (and the developers who serve them) in making a preliminary financial assessment of their worker cooperative startup. Many worker cooperative startups are learning business finances for the first time. This tool offers a framework to think about their business and some labor-saving, pre-built Excel formulas.
This resource uses diagrams to depict how the different forms of employee ownership are structured. It focuses on the two primary vehicles for broad-based employee ownership in the United States: worker cooperatives and employee stock ownership plans.
For financial institutions looking to create deep and lasting impact, worker cooperatives are a powerful tool for economic and community development. They reduce inequality by allowing a greater segment of the population to build assets through business ownership. They combat poverty by providing access to employment for marginalized populations. And they strengthen local economies by rooting businesses in their communities.
The idea of selling a business to its employees and converting it to a worker owned cooperative is gaining traction as a viable succession strategy. It is a strategy that saves jobs, builds community wealth, and empowers workers to own and manage their own business. Worker cooperatives differ from other business entity types in that they are owned and democratically controlled by their workers, and workers share in the risk and reward of operating the business.
This resource is intended to give small business support organizations a background on how the worker cooperative model can help entrepreneurs reach their dreams.
Worker cooperatives have increasingly drawn attention from the media, policy makers and academics in recent years. Individual cooperatives across the country have been highlighted, and substantive studies have been conducted of the worker cooperative experience in other countries, including Spain, Italy, France, Canada and Argentina. But what do we know about worker cooperatives in the US as a whole?
After working with professionals to determine which entity type is right for your worker cooperative, the next step is to work with professionals to develop your governing documents. Bylaws and operating agreements should include high-level information about the governance of the organization. They clarify and codify the democratic governance and ownership of your cooperative, help provide a structure through which the cooperative can grow, and provide a last resort for conflict resolution if relationships break down.