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Co-operatives _ the Community Development Process - Innovation


									    Co-op Training Module II
Co-operatives & the Community
     Development Process
       Unit 1
Definition & Values
         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)
          Community Development

Community Development “is 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 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
         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
       • 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
       • 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
   – A mechanism for generating community investment
           Unit 2
Co-operative Development In
  Newfoundland & Labrador
 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)
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)
   Engagement of CD Agencies in Co-op
• 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
   – 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
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
        Unit 3
What Makes Co-ops Unique?
Co-ops are Community Owned & Controlled
• 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
• 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
• 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
• The “Co-operatives Act” protects the unique aspects of the co-op
  business structure and operations & the rights of
• 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
              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
• 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-
 • 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
• 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
         Unit 5
Co-op Development Support
    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
 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
           Unit 6
Community Development Partner
                 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
   – 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
       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
   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 &
   – 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
•   Organic foods        •   Cranberry Production
•   Farmer’s markets     •   Fur Farming
•   Wind Energy          •   Beef processing
                         •   Food catering
•   Film production
                         •   Arts & Crafts
•   Community Theatre
                         •   Funeral Services
•   Car Sharing
                         •   Elder care
•   Forestry             •   Blueberry Production
•   Youth Advocacy       •   Health care
•   Micro-breweries      •   Outdoor Equipment
•   Broadband Services   •   Municipal services
•   Community Services

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