Co-op Training Module II Co-operatives & the Community Development Process

1. Co-op Training Module II Co-operatives & the Community Development Process

2. Unit 1 Definition & Values

3. 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 jointly-owned 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, eco-tourism, etc)

4. Community Development Community Development “isthe 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

5. Community Economic Development Community Economic Development “is a process which focuses on wealth creation, job creation, value-added activities, business and co-operative 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 ,

6. Shared Principles & Values • Both co-operatives & community development agencies share the following principles & values: • A “bottom up” approach to development • Ensures community engagement in planning and implementation of initiatives • Encourages collective action • Community engagement and control • Elects local boards of directors to ensure democratic governance • Public consultation a norm • Building community capacity • Provides training & experiential learning activities for local volunteers • Creates networks of skilled and committed people

7. 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

8. Unit 2 Co-operative Development In Newfoundland & Labrador

9. Co-ops: Meeting Community Needs • 100 years of serving needs of Newfoundlanders & Labradoreans • Systemic poverty & lack of services precipitated formation of first co-ops • Hundreds of co-ops & credit unions formed in 1940’s • 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)

10. Co-ops & Community Development Today • Currently, over 80 co-ops & credit unions provide a variety of business and community services across the province • Changing demographics & society needs create new co-op opportunities (i.e. small-scale farming, ambulance services, etc) • Regional & community development groups use the co-op model to respond to needs (i.e. Tourism marketing, Municipal Servicing, etc)

11. 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 • Shorefast Foundation (Fogo) – Fogo Island – Change Islands Agricultural Co-op • Random North Development Association – Mink Pelting Co-op • Baie Verte Consumer’s Co-op – Advocate Youth Services Co-op • Humber Valley REDB & Model Forest NL – Forest Products Co-op

12. 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

13. Unit 3 What Makes Co-ops Unique?

14. 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

15. 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

16. 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

17. 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

18. 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

19. Unit 4 Steps in the Development Process

20. 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?

21. 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

22. 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

23. 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

24. 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

25. 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

26. Unit 5 Co-op Development Support Services

27. Training & Development Advice • Newfoundland-Labrador Federation of Co-operatives: • 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

28. 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.

29. Unit 6 Community Development Partner Support

30. 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

31. 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

32. 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

33. 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

34. 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 co-op activities as required

35. Co-op Development – The Future • The province’s network of community development & industry sector agencies can play a more pro-active 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.

36. 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