Issue #32 - April 2005 A publication of Cooperative Development Institute www.cooplife.coop
Cooperative Development Institute is the Northeast's non-profit center for cooperative development. Contact us if you'd like assistance starting up a new cooperative or strengthening an existing one: info@cooplife.coop
Features: Public Policy Summit in NYC on May 2nd, CLL Profile: Noemi Giszpenc
NE News: VT's Web Design Co-op, Student Food Co-op
Legal Matters: Worker Co-op Boards
Outside the Region: Islamic Co-op Grows
Bulletin Board: Opportunities Knock!
Values in Action: (1) Self-help and (2) Self-responsibility: The Rappaports
CDI Services: Contact us FMI at info@cooplife.coop or (413) 774-7599
Co-op Quiz: 'Fess up! How many of you knew Mondragon's other name?
Photo: Charles and Eva Rappaport were dedicated pioneers in the growth of housing cooperatives in their hometown of New York City, and beyond. This month, they will be posthumously inducted into the Cooperative Hall of Fame, where they will be remembered with great affection and eternal gratitude. For more, see Co-op Values in Actions and the Bulletin Board, below. Our thanks to Art Jaeger and the National Cooperative Business Association for the photo.
FEATURES
Co-op Policy Summit 2005: Forging Policies that Sustain Communities
What can we do together as cooperators in New York and New England to protect and strengthen our region? What are the burning legislative issues needed to sustain local communities? Where can cross-sector cooperative support push ahead key policy initiatives? How can cooperators work together better to build support for local communities and for co-ops, so they can thrive in a tough global market? How can co-ops develop the support of public institutions to help them harness their powerful positive energies?
Cooperative Life, The Northeast Federation of Cooperatives, is developing a Public Policy Platform that cooperatives across New England and New York can jointly support. Members are currently developing proposals they have classified into a dozen categories, including Agriculture, Food Security and Rural Affairs; Environment, Energy and Land Use; Telecommunications and Technology; Education and Youth Development; Security, Justice and Public Safety, and Community Asset and Economic Development.
The initial proposals will be considered for action at the Cooperative Life 2005 Public Policy Leadership Summit that will take place May 2nd in New York City. The setting for this auspicious gathering is Amalgamated Cooperative Housing in the Bronx.
The Policy Summit will bring together cooperative leaders and other key stakeholders in the region who are concerned about sustainable communities in order to review and prioritize policy proposals for joint action in the coming year.
The policy summit is open to all interested parties on a first come, first-served basis. Pre-registration (required) is $45 including lunch and refreshments. FMI: info@cooplife.coop or (413) 774-7599.
Public Policy Proposals Due April 15th
Members of Cooperative Life are eligible to submit proposals for inclusion in the 2005-2006 Cooperative Life Public Policy Platform, to be adopted by the members. An online form for proposals is at www.cooplife.coop/events/index2.htm. If received by April 15th they will be included in conference materials, or Members may bring to the summit 50 copies of a proposal they wish to submit there.
Proposals might identify key legislation pending, or upcoming legislation that the cooperative community could support. Or they could identify new legislative initiatives that would strengthen the cooperatives in a particular sector, or contribute to building sustainable communities. Such legislative initiatives might include allocations of funding or tax incentives; removing regulatory restrictions, or building in regulatory supports
Cooperative Life Members can also submit policy briefs that take a broader perspective, outlining a key issue and public policy initiatives that could address it. Policy Briefs can be brought to the Cooperative Life board of directors for adoption at any time during the year.
For more on how your co-op, credit union or other organization dedicated to building the region's cooperative economy can become a Member of Cooperative Life (it's free!) go to www.cooplife.coop/join.htm.
CL LEADER PROFILE
Noemi Giszpenc
Making Cooperation Easier
CLL: How did you get interested in cooperatives?
NG: I wanted to 'save the world'! So I started studying economics [at the Massachusetts Institute of Technology] and ended up with a degree. That helped me get a job at the World Bank as a research assistant in the Office of the Chief Economist, Joseph Stiglitz, a well-known maverick. In two years there, I learned more economics than I did in four years as an undergrad. Not only from Stiglitz, but also from his staff of brilliant economists such as David Ellerman, a great scholar in the field of worker ownership and workplace democracy...I learned that ownership, especially by workers, was more than a good idea, it was a basic human right. I also learned how organizations and projects achieve better results when they're run with democratic participation.
CLL: How did you come to be on the Cooperative Life board of directors?
NG: As a member of Ownership Associates [a worker-owned consulting firm that helps employee-owned companies build an ownership culture], I presented at a worker-co-op seminar at the University of Connecticut and met Christina Clamp, who was talking about the [distance learning] Community Economic Development program at Southern New Hampshire University. A year later I applied. The program requires students to do a project, so I needed an organization to work with. Then in the fall of 2003, Jane Livingston called asking me if I would be interested in running for the board of Cooperative Life. I proposed that part of my work as director, if elected, would be my CED project. Everyone seemed to think that was a good idea.
CLL: What was your project?
NG: My goal was to help cooperatives in the Northeast strengthen their relations to each other. After some initial exploration of a 'co-op currency' didn't take off, we conducted a survey of Cooperative Life members. Eighty-five percent of the respondents liked the idea of a Northeast Co-op Directory. I saw myself spending a lot of time making phone calls... But my fiancé Paul, a 'techie', introduced me to 'wikis'--web sites where viewers can edit and add to the online content. Paul set up a prototype online directory, and along with a few other people working on another technology project for Cooperative Life, we refined the features and I presented the test site to the Board last fall.
REGINA, the Regional Index of Cooperation, will make cooperation among cooperative organizations easier. It's not just a co-op directory. As features are added, it'll be a place where you can find many different ways to cooperate and build the cooperative economy.
One thing that makes this directory different is that Paul added an amazing geographic component. You can see a map showing other organizations in your area. This is key, because in all of this cooperative and community development work, I have learned the importance of place. The mega-economy [chain stores, big banks, multinational corporations] erases the sense of place. But when people are connected to a place, they care for it, and cared-for places thrive.
Ed. Note: REGINA has been public since late January. 'People are adding or editing organizations every day' all over the Northeast and beyond. Cooperative Life is grateful to Noemi Giszpenc, Paul Fitzpatrick, and volunteer design guru Jason Lemieux of Eggplant Active Media Workers' Collective who appeared from cyberspace to help re-design the site (see Northeast News below). Come participate in this truly Cooperative Directory! http://regina.csail.mit.edu (A .coop domain name is coming soon!)
NORTHEAST NEWS
Web Design Co-op
Eggplant Active Media Workers’ Collective began in November, 1999, when a group of independent media activists came together in Seattle at the huge anti-globalization rally that awoke many Americans to the depth of resistance toward economic models that exploit workers and the environment. The worker-owned collective is committed to promoting democratic processes and ecological sustainability in its work as "tasteful designers" of web sites and "object oriented coders" ("We are serious about writing applications that are both powerful and flexible... from the start.") Eggplant's seven technology and media activists operate out of offices in Brattleboro, Montpelier, and White River Junction, Vermont, with additional staff located in Brooklyn, New York, and Urbana and Chicago, Illinois.
As part of Eggplant Active Media's commitment to making substantive social change, they contribute to and support grassroots organizations, social and political movements, and individuals working for social change through donations of time, money, and services. For example, they offer a free usability analysis of existing web sites to non-profit organizations and grassroots groups. Founding member Jason Lemiuex is helping to re-design the web site for Cooperative Life's online interactive co-op directory, REGINA (see Profile of Noemi Giszpenc, above).
In the long version of the group's history on their web site, they explain how Eggplant came to be. "Initial visions were hashed out in conversations…Here, notions about what kinds of work the Eggplant would take on, political and community responsibility, structural arrangement of the Eggplant, pay scales, revolutionary politics, capitalism, and many other weighty subjects carried a mad band of visionary activists through many a round of late night typing sessions, fueled by a burning desire for a new world built on ecology, democracy, and ethics, and a slight addiction to coffee and caffeinated mints." They also operate a successful business: their client list numbers 69 social justice, environmental and other organizations. Still, they struggle to reconcile their ideals with the need to earn an income. "While we may not always work for the most revolutionary or progressive of clients," they acknowledge, "We believe that the Eggplant internally must reflect the kind of society we believe we can create. Therefore our structure embraces participation in decision making processes, equitable pay scales, rotating duties, non-hierarchical structure, supporting the needs of members, and donating our time, energy, and support to organizations working for the same ends we are." FMI: www.eggplant.org
NEW FOOD CO-OP FOR AN ORGANIC BIG APPLE
Columbia Food Co-op opened in early February on Manhattan's Upper West Side, a small store run out of the back of a friendly, more conventional snack joint. Members are drawn from students, staff and faculty of Columbia College and neighboring Barnard, as well as local residents. They are putting the emphasis on organic and whole foods. The store is stocked with dried and canned goods, nuts, fruits, cereals, grains, soy products and healthy snacks. Look for produce in the warmer months. The co-op is open Sunday through Thursday from 9 p.m. to midnight. These are hours when members want to eat fast and cheap--saving themselves for the New York weekends--but they increasingly also want to eat smart, and healthy.
Membership costs $5, waived if you sign up for a monthly work shift. Founded by members of Students for Economic and Environmental Justice with $2,660 in start-up funding from Columbia College and other small grants, there were 80 members (13 signed up to work) as of opening day. While they don't own the co-op legally since the College owns the building and operates the campus food service, co-op members make all the decisions about its operation. The school's food service administrators and staff have let the co-op use their cash register system to buy food with cash, dining dollars and points and they have been allowed to purchase inventory from a vendor already selling to the school. Co-op members are making plans that include supporting area farms by selling their products in the store, and developing educational activities around nutrition and environmental awareness.
OUTSIDE THE REGION
Co-op Islami Adds Value
The biennial Gulf Food trade show is the fastest growing exhibition of its kind in the Middle East. At the February, 2005 event held at the Dubai World Trade Centre, Co-op Islami launched its new line of frozen seafood for the first time in the region. The co-op specializes in foods that are 'halal' or totally compliant with the standards and principles of Islamic Shariah law.
In 1981 the Dubai Co-operative Society established Co-op Islami to import 'Real Halal' food to consumers in the United Arab Emirates. First up in the product line was frozen chicken, which was a big hit. This success was repeated with a variety of halal meat products such as mutton and beef, followed by burger patties, sausages, kebabs, minced meat and many more. In 1991, Dubai Co-operative Society reached another landmark with the opening of its own Co-op Islami meat processing plant. Since then, the state-of-the-art plant has continually increased its output and added new products to satisfy the growing needs and sophistication of consumers' tastes.
But Co-op Islami did not limit itself to meat production. It expanded to produce other foods whose true halal quality might be harder to verify. Cheese, for instance, might be made using rennet from animals not slaughtered according to halal law. Co-op Islami cheese is made with vegetable rennet. The cooperative's brand has become one of the most popular in the UAE and Gulf states, winning numerous awards. With a current product line of 150 items, ranging from fresh and frozen meat products to cheeses and vegetables, it aims to become the lead halal food producer in the region.
Further, its web site proclaims, "Co-op Islami is a successful organization, respected in the communities in which we live and the industries of which we are a part. Our dedicated team of caring individuals treats all persons with absolute respect and integrity. People in our organization are devoted to the success of their associates in fulfilling their chosen potential in all aspects of life. It, takes many fine individuals working in many disciplines, areas and locations, using all their skill, knowledge and abilities to grow, process, transport, sell and support our Co-op Islami operations." FMI: www.co-opislami.com
ANNOUNCEMENTS
April 31st deadline to apply for full scholarship to St. Mary's Co-op Management program from National Co-op Bank is being offered to a highly motivated co-op manager seeking a Master of Management specializing in cooperatives. NCB is awarding the scholarship, worth more than $20,000, for the web-based Master's program offered through Saint Mary's University in Halifax, Nova Scotia. Preferred applicants will be from an NCB customer organization. Program participants attend a one-week orientation in Nova Scotia in August. The three and one-half year 'cyber curriculum' includes summers off. A study tour will go to Mondragon Co-op in Spain. Applicants should hold a middle management position in a cooperative business, show a sustained interest in cooperatives, and want to learn new approaches to weaving together business skills and cooperative values. FMI: Heather Wyatt (202) 682-7341. (See also June 2-4 Symposium, below)
May 2nd Cooperative Life Public Policy Summit in New York City is open to all interested parties on a first come, first-served basis. See Feature story, above. Pre-registration (required) is $45 including lunch and refreshments. Help discuss, decide and enact public policies that promote cooperative enterprise! FMI: info@cooplife.coop or (413) 774-7599.
May 4th -6th - Mid-Atlantic Alliance of Cooperatives' will hold its annual Eastern Member Relations Conference in Pittsburgh, PA. Seldom have cooperatives faced an era of such rapid and unpredictable changes--in business climate, government policies, the economy, and the workplace. This timely program covers issues that cooperatives must consider, from 'New Cooperatives: Challenges and Successes' to 'What Happens After Bankruptcy?' For those who deal each day with co-op communications, member relations and board responsibilities, this event is a great opportunity to learn, share best practices, and increase the value of cooperatives through networking. FMI: www.maacooperatives.org/ or call 814-238-2401.
May-November 2005 CooperationWorks! Professional Development Training for current and prospective cooperative development practitioners has been redesigned. Since 1999, CooperationWorks! has delivered the only public training program in the country designed for cooperative business development practitioners. The new program will take place in two five-day sessions in order to reduce travel expenses and to create a richer classroom experience as well as more time for networking and informal discussion. The venue is Madison, Wisconsin. FMI: CW Executive Director Audrey Malan at (307) 655-9162 or cw@vcn.com.
June 2nd - 4th 'Symposium on Co-op Accounting' is being held at St. Mary's University in Halifax, Nova Scotia June 2-4, 2005. Scholars and practitioners will present papers from the United Kingdom, Spain, the USA, Canada and New Zealand. Registration is $125C (includes opening reception, lunches, Friday dinner) and ends May 15th; FMI: tom.webb@smu.ca or (902) 496-8170. (See also item on scholarship for St. Mary's degree program in co-op management, above.)
June 9th -11th, Ann Hoyt, longtime cooperative scholar and educator, board member of National Cooperative Business Association, and a professor in the Urban Cooperative Institute at University of Wisconsin-Madison, reminds us of the annual CCMA (Consumer Cooperative Managers' Association) conference; consult the university's Center for Cooperatives' web site FMI: www.cals.wisc.edu/ccs.
The National Society of Accountants for Cooperatives has produced a new, 32-page booklet called Welcome to Cooperatives. It's aimed at new co-op employees and members, and explains the responsibilities of managers, directors, members and employees as well as how cooperatives differ from other types of businesses. Bulk copies are available from NSAC, 136 S. Keowee St., Dayton, OH 45402. The Society also publishes the regularly updated loose-leaf primer Financial Reporting by Cooperatives, a technical quarterly The Cooperative Accountant, the newsletter News & Views and an annual membership directory. FMI: www.nsacoop.org or Tel. (937) 222-6707.
The National Federation of Community Development Credit Unions--220 credit unions serving urban and rural low-income communities across the United States--has launched the CDCU Mortgage CenterT, a Limited Liability Corporation, to expand credit unions' options for financing mortgages. They are teaming up with CU Partners and PHH Mortgage Services, two of the industry's leading mortgage service providers, to bring leading edge technologies and secondary market investors to the Federation's member CDCUs. "The Federation's goal," explained Executive Director Clifford Rosenthal, "is to bring a platform of mortgage services and products even closer to the smallest community development credit unions and help the staff to feel comfortable offering housing finance assistance to their low-income communities." In the fourth quarter of 2005, the Federation will launch its own secondary market operation, to purchase nonconforming mortgage loans in low-income communities for eventual re-sale to investors. FMI: www.cdcu.coop
Ownership Associates' Chris Mackin wrote us about the Burlington City Market story in CLL 31: "I am familiar with the early days of this effort. The comment about 'There's Coco Puffs in the cereal aisle!' almost made me fall out of my chair laughing. Nice touch. That quote says it all. [But what] really disappointed me was making the democratic decision of workers at City Market to be represented collectively by a union sound like it was a 'glitch'. Why is this framed negatively? Unions aren’t perfect and they need to learn about some of the distinctive characteristics of cooperatives. But in my opinion cooperatives of any real organizational scale, say over 50 workers, need unions to provide a check and balance on the power of the Board and Management. I believe this to be the case with worker cooperatives. The case is even stronger with consumer cooperatives...And the cooperative movement needs external allies, such as the labor movement, to help get them out of their 'island of virtue' mentality. We need to link what few islands of virtue we have in society, not pit them against one another." Thank you Chris for this important feedback.
NCBA can put your Co-op's name in lights! Want to see your co-op's profile in a future issue of the online bulletin e-Link, published by the National Cooperative Business Association? Contact Alicia Valencia at (202) 383-5440 or avalencia@ncba.coop for more information.
LEGAL MATTERS
Worker Cooperative Boards by Patrick J. Deluhery
Is there a difference between a worker cooperative and other types of cooperatives in how their boards of directors function? Basically, the answer is no. While a worker-owned cooperative's board may be composed of co-op employees, the board’s job is still to govern the cooperative for the best interests of the members under the bylaws. Some worker cooperative bylaws may require worker–member approval or concurrence with the board’s action in certain areas, and there is often a process for member input at a worker co-op board meeting; otherwise, board activity is the same. (In my experience, worker co-ops differ from consumer, producer and purchasing co-ops largely at the management level in that all worker-owners are more actively involved in the management of their cooperative business.)
How does the fact that a worker co-op director is also an employee affect the ability of either the board or the members to remove or discipline a director? It really has no effect. Cooperative governance is on a voluntary basis for all members, and this governance includes director duties. Since directors are all volunteers, any employment law issues would not apply to director conduct.
That said, it is important that co-op bylaws provide for reasonable prior notice to a director before any discipline or removal process begins. The director also deserves an opportunity to be heard, at a hearing with either the board or the members. Such a process will help ensure an open and fair decision on the matter at hand. Even if your co-op’s bylaws do not provide for notice and a hearing, this is now considered basic fairness.
This also ensures members that directors they elected will have a strong voice even if other directors oppose them. Any process aimed at disciplining or removing a controversial director will not be because of his/her ideas but for good reason.
At its most basic level, employment law guarantees all employees the right to be notified of performance problems, to be given a fair opportunity to correct those problems, and to be evaluated, disciplined and terminated in a fair process based on job performance and/or other relevant matters. By following the process mentioned here for directors, co-ops will in fact be complying with employment law even though it does not technically apply.
Ed. note: Patrick J. Deluhery is a Massachusetts-based attorney serving the legal needs of cooperative businesses in the Northeast. FMI:pdeluhery@aol.com. This article is intended to provide information and is not legal advice.
CO-OP VALUES IN ACTION
(1) Self-help and (2) Self-responsibility
No sector more clearly demonstrates these values than housing cooperatives, where residents assume the individual responsibilities of owning their home as part of a group. For more than 30 years, Charles and Eva Rappaport were tireless volunteers and influential leaders of the New York City and national housing cooperative community. Charlie served as president of the Federation of New York Housing Cooperatives, founded in the 1950s by 100 moderate-income co-ops. Eva served as the organization’s executive director, working as editor, writer, conference coordinator and membership director from the Rappaports' home office. In a city where one-third of all housing is cooperatively owned, they were strong advocates and made sure the interests of housing co-ops were heard.
While much of their focus was on New York City, the effects of their work have been felt throughout the country. Charlie directed his attention to the national level, where he led the Federation’s successful campaign to create the Cooperative Management Housing Insurance Fund. Forty years later, the Fund is still returning patronage dividends to Section 213 cooperative housing corporations. Influenced by the Federation’s advocacy and the example of New York City’s successful 213 program, Congress passed legislation in the late 1950s that allowed use of market rate Section 213 insured mortgages to convert rental properties to cooperative home ownership. Several years later, Congress further expanded the co-op housing program and enabled the construction of another 150,000 units of affordable housing for low- and moderate-income families.
Firm believers in the power of an educated cooperative board, the Rappaports made training of housing cooperative boards one of their top priorities and for years conducted training through the National Association of Housing Cooperatives. Both Charlie and Eva served on the NAHC board until their deaths in 1997 and 2000, respectively. They will receive the cooperative community's highest award later this month when they are inducted into the Cooperative Hall of Fame established by the National Cooperative Business Association, now administered by the Cooperative Development Foundation. Other 2005 Hall of Fame inductees include Credit Union National Association's Pete Crear and Robert Kabat, formerly with the National Rural Electric Cooperative Association. FMI: www.heroes.coop
Thanks to the Cooperative Development Foundation public relations staff for the information in this section. FMI: www.cdf.coop
CO-OP QUIZ Q32: What was the name of the first insurance cooperative in the country, and who started it? (Bonus point: Name an insurance co-op in business today. Extra point if it's in this region.)
A31: The Mondragon Cooperative Corporation, as it is called today, was formed in 1956 when five young engineers were encouraged by their parish priest, radical visionary Father Jose Maria Arizmediarrieta, to set up a worker-owned cooperative to manufacture paraffin cookstoves. Fifty years later, MCC consists of three sectors (financial, industrial and distribution) each with several divisions, and is governed by the 650-member Cooperative Congress' steering committee. A total of 218 companies and entities employ 68,260 people. Most of them are based in the Basque region of Spain where the co-op began, and headquarters are still in the town of Mondragon. If you look on a map, you may not find it since the Basque name, Arrasate, is often used instead. Many towns in this region have two names, in Spanish and the Basque tongue called Euskera, a pre-Indo-European language of mysterious origin. FMI: http://www.mondragon.mcc.es/ing/index.asp (and a good Basque culture blog is www.buber.net/Basque)
CONTACT COOPERATIVE LIFE LEADER
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Cooperative Life Leader Staff
Lynda Brushett, Senior Editor
Jane Livingston, Editor
Laurie Siggillino Broussard, Production Manager