Features: Electric Co-ops Look at Alternatives, Leader Profile: Brian Henehan,
Cornell's Co-op Mentor
NE News: NH Food Co-op Joins Fund; MA Laid Off Workers Speak Up
Legal Matters: Co-ops Prepare for White House Conference
Outside the Region: Trade Publishers Cooperate
Bulletin Board: Great Events and CO-OP MONTH TOOL KITS for October!
Values in Action: (9) Social Responsibility and (10) Caring for Others
CDI Services: Contact us FMI at info@cdi.coop
Co-op Quiz: The closest numbers win!
Photo: The Hardy family joined the Organic Valley Family of Farms in 2003 (See Co-op Values in Action, below). They milk 55 Holsteins, Jersey Cross and other types of dairy cows on their farm in Mohawk, New York. Photo copyrighted by Organic Valley Family of Farms.
Cooperative Development Institute (CDI) 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@cdi.coop
FEATURES
Rural Energy Co-ops Look At Renewables
On July 29th the CEO of the National Rural Electric Cooperatives Association (NRECA) voiced approval of the passage of the Energy Policy Act of 2005. Addressing both houses of Congress, Glenn English asserted the Act "will help provide a more secure future for all Americans by bringing policy into alignment with the economic, environmental and technical realities of the 21st century." English commended the legislators for "making the tough decisions, reaching consensus, and ultimately recognizing and protecting the right of consumers to own and operate their independent electric cooperatives."
So where does NRECA stand on renewable energy generation? Among other things, the new policy will enable co-ops to secure bonds for building the renewable energy infrastructure. Until now, rural electric cooperatives (RECs) have had to borrow from Washington or Wall Street; now, they will be on a more level field with investor-owned utilities and their tax credit advantages, and municipal utilities which have had the ability to secure bonds.
How much energy for renewables is there?
In its 2004 policy document 'Electric Cooperatives and Alternative Energy, a Snapshot' the Association stated that nearly 250 of the nation's 865 RECs offered renewable energy options allowing consumers to buy 'green power' from solar, wind, low-impact hydro and biomass generation. In 2004, electric co-ops expanded their non-hydroelectric generation capacity to more than 60,000 kilowatts, a figure that has surely increased in the past year.
Trying to discern how much activity is happening highlights the autonomous nature of cooperative enterprise. As NRECA spokesman Patrick Lavigne points out, "Every co-op is responding to what its members want. They're all different." And he notes that each region of the country tends toward some strategies and away from others. Wind generation is big in the Midwest, not so much in the Southeast.
Lavigne says that RECs are generating and consuming more renewable energy than at any time in the past. How much of this is due to new, less costly, more reliable technology and how much is due to members' commitment to cleaner energy is hard to say. Lavigne explains that in some cases, states are mandating a percentage of renewables in a company's portfolio. In other cases, such as using farm manure to produce methane, an available resource is being utilized.
Vermont REC leads the way
Of the various biomass technologies-landfill methane gas, woodwaste, farm by-products and corn-based ethanol, methane is one that has been working well for one Northeastern REC. In 2002, when Washington Electric Co-op ended its contract with Vermont Yankee for nuclear energy, the Montpelier-based cooperative decided to invest in building its own methane plant at a local landfill.
The co-op's longstanding commitment to clean energy has resulted in their leading the nation's RECs in supplying 40 percent of the co-op's energy mix from renewables: landfill methane, woodchips and small-scale hydropower. Since 2001 the co-op has traded renewable energy credits based on its purchase of methane from a Connecticut landfill; the revenues have been used to keep co-op rates low. In June, 2005, the co-op announced that it has joined with UPC Vermont Wind LLC to study the feasibility of an in-state wind generation project.
Clean energy bond 'changes everything'
Aaron Jones is General Manager of Clean Power Co-op in California, and has been committed to renewable generation for at least 10 years. In the rural electric co-op industry, 90 percent of the power is still generated by coal, but Jones expects to see a significant shift in interest now that the Clean Energy bond issue has been passed.
"The Clean Energy bond takes away the advantage municipal and investor-owned utilities have had, with tax credits and municipal bonds," Jones explains. "Before, it was easier and cheaper to let someone else build and buy power. Now, we can build wind farms and other renewable systems at the same cost as the other guy's. This changes everything."
Since the bond passed as part of the 2005 Energy Policy Act at the end of July, we are still in the 90-day period for writing the regulations. The first applications for using the bond option are expected by the end of the year. Jones says his co-op plans to apply for $25 million to build a wind farm. Look for periodic updates on this program in future Co-op Leaders, and send us news about your co-op's renewables projects! FMI: www.nreca.coop or contact Patrick Lavigne at (703) 907-5500.
CL PROFILE
Brian Henehan, on the Contervailing of Cooperatives
Cooperative Leader had a chance recently to interview Brian Henehan, long-time Senior Extension Associate in the Department of Applied Economics and Management at Cornell University's College of Agriculture and Life Sciences. Brian was a founder of the Cooperative Development Institute and on its first board of 'pragmatic visionary' directors. He is also secretary of the Northeast Cooperative Council, a non-profit organization comprised of 20 cooperative businesses.
CL: How did you end up in the co-op world?
BH: I became familiar with co-ops when I moved to Vermont in the early 1970's . I was a member of an electric co-op, and lived neat Cabot Creamery, and I was aware that both of those were member-owned cooperatives. I was also involved in consumer natural food cooperatives. In 1978, I became a VISTA volunteer and that led to my organizing a vegetable growers cooperative. I later became manager of that produce marketing cooperative, Vermont Northern Growers. I walked up a pretty steep learning curve on cooperative marketing and finance, then realized I needed to go back to school to sharpen my skills as a manager. The Extension Associate position at Cornell was just being created as I completed my Masters in Agricultural Economics at University of Vermont in 1985. (His thesis was "An Economic Study of the Organization, Financial Performance, and Operation of Emerging Farmer's Cooperatives in Vermont".)
CL: What have you learned about what makes a successful cooperative?
BH: Having been a manager of a co-op and serving on several co-op boards, I learned early that having leaders who can accomplish the vision are key components. That's where I've tried to focus most of my concentration: What makes a board of directors tick, what are common pitfalls for senior managers?
CL: Is it cultural: are groups with similar heritage more likely to work well together? Is it a social thing, an attribute of someone's personality?
BH: You can probably say some of all of the above. But that catalyst group also has to have the vision and energy to make things happen, to get advice, to find the specialists. And they have to identify what the problem is. What's wrong with the status quo that drives them to make this move? I'm a pragmatist and an economist. If a co-op can't (won't) deliver tangible economic benefits, the group should realize that forming a cooperative might not be the best solution for that group.
CL: Are you implying that the co-op model may be becoming obsolete?
BH: Is it still a relevant model? Yes! Does it have to change and grow and evolve? Yes! But in today's world, with ongoing consolidation and concentration in almost every industry, there has to be what economist John Kenneth Galbraith termed 'countervailing power' for the consumer, the farmer, and the worker. If government isn't available to do that-and it seems to be less and less so-then individuals have to figure out ways to create countervailing power in order to protect and serve their interests.
The co-op model is an impressive one in that it allows an individual to make the choice to collaborate rather than try to go it alone--or not go at all, if the resources aren't there. The model is very flexible and can be executed in all kinds of ways. I'm struck by how creative and innovative people are, once they understand the potential benefits.
NORTHEAST NEWS
Laid Off Workers Raise Their Collective Voice
Last November, national phone fundraisers Share Group, Inc. closed its Amherst, MA office and 100 employees found themselves without jobs. A group of the most experienced workers did some research and became interested in the cooperative model. They met with worker co-op Collective Copies in Amherst, a successful 25-year old company with a history of supporting cooperative development, and they decided to try starting a worker-owned business.
"We loved the idea of a cooperative," says Linda Harke, the president of Collective Voice. "We were sick of a top-down hierarchy that could shut us down like that, literally overnight."
Earlier this year, nine former SGI employees put up $1,000 each for a member share and incorporated under chapter 156D of the general laws of the Commonwealth of Massachusetts, electing to be governed as a worker cooperative under general laws chapter 157A. The company specializes in telephone and other types of fundraising for progressive non-profits and political candidates, areas in which they have considerable expertise.
Co-op members have between three and one-half and 14 years of experience. They are registered to do fund-raising in Massachusetts already and are in the process of registering in Vermont, with plans to register throughout New England in 2006.
From holding benefits to giving them
"We're generating income now and expect to turn the corner in 2006," says Harke. "Right now we're operating on sweat equity; it takes time to build a client base." Also, registration, bonding and backroom administrative expenses mount up. Members donate equipment, people pitch in and chip in. They hold fundraising benefits for the co-op. Someday soon, they plan to offer full-time living wage jobs, with healthcare and other benefits, to a growing co-op membership.
Meanwhile, the group is branching out to do more than just phone fundraising. They offer telephone number look-up and correction services, assistance with state reporting forms and general assistance with year-end tax reporting, and will sponsor fundraising events. They even offer a complimentary initial consultation to determine exactly what the client's needs are.
Support for the Collective Voice co-op has come from Cooperative Fund of New England and Franklin County Community Development Corporation, which has a mandate to create employment opportunities. CDI's Jennifer Gutshall will be working with the group to clarify Board and Member roles and responsibilities and to learn how and why to 'market the co-op difference.'
Linda Harke is looking forward to it. "It's all been very exciting," she says. "We're meeting such interesting people and organizations who are doing so many wonderful things. It's very rewarding work." Welcome to the co-op community! FMI: www.collectivevoiceinc.com
NH FOOD CO-OP JOINES NATIONAL FUND
Last winter, the board of directors of Hanover Consumers Cooperative in New Hampshire established a local charitable foundation that is part of a national network of cooperative community funds, or CCFs. The Hanover CCF is linked with 18 others around the country; they are connected by the Twin Pines Cooperative Foundation (TPCF) based in Davis, California.
Each CCF is established by local co-op sponsors-mostly food co-ops so far--and is housed within TPCF. Annual income from the endowments is used to make donations to nonprofits and cooperatives within the communities the co-ops serve. The food co-ops participating in the CCF network at present serve more than 10 million customers per year, operate at least 25 store locations, do more than $150 million in sales, and include more than 100,000 member households.
One attractive feature of the initiative is that a super-lean one percent of the fund's annual budget is spent on administering the program; operating costs are split between TPCF and participating co-ops. This means that 99 percent of donated funds go directly to the recipient organizations. By the end of TPCF's fiscal year in October, they project the combined assets of the CCF endowment will be about $600,000 with the combined TPCF/CCF investments in cooperative development totaling roughly $1.2 million.
Hanover's history of giving
Charitable giving is certainly not new to Hanover Consumers Co-op. It has a long history of involvement in the welfare of the New Hampshire and Vermont communities it serves. In 2001, it was one of the first food co-ops in the country to create a cooperative community fund and today, with more than $150,000 in endowed assets projected for year's end, it is the largest CCF in the nation. Now, the combined power of the TPCF network will enable more cooperative development resources to be channeled to the region.
Anyone may donate to the fund, regardless of whether they are affiliated with Hanover Consumers Co-op, or even patronize the store. Twin Pines Co-op Fund's President David Thompson, author of the excellent chronicle of the Rochdale Pioneers, Weavers of Dreams, can be found at (530) 757-2233 or dthompcoop@aol.com.
LEGAL MATTERS
Co-op Policy for Seniors
September 8, 2005, marks an important date in the co-op world. "Cooperative Solutions for Seniors" is scheduled to take place at the National Press Club in Washington, DC. This public forum is focused on the role co-ops have to play in senior home care, senior housing, and senior health care, and how to support this work through co-op friendly policy.
The forum has been designated as an "Independent Aging Agenda Event" by the White House Conference on Aging, which will take place in December. Forum sponsors include the Mutual Service Cooperative Fund of the Cooperative Development Foundation (CDF), Amalgamated Bank, National Cooperative Bank, and NCB Development Corporation.
After providing a look at the challenges and an overview of co-op solutions, forum leaders will help generate public policy recommendations. These will be submitted to the Policy Committee and Delegates to the 2005 White House Conference on Aging.
CDF's Liz Bailey comments
Liz Bailey, CDF's executive director, was looking forward to the forum in late August when Co-op Leader caught up with her. "What we're primarily showcasing to Hill staff, Governors' DC staff, and others are success stories, to demonstrate to people who have never explored or been exposed to the co-op option that it's viable as a solution to many needs of seniors in rural America."
One of the challenges to this is legislation at the federal or state level that restricts, and in some cases threatens, the ability of people to organize cooperative businesses to meet society's needs. These and other barriers to cooperative development will be discussed.
The day after the co-op forum, the CDF board will meet to allocate $130,000 in grants for precisely this important work with rural seniors. Look for news on the CDF grant program and the White House conference in future Cooperative Leaders.
OUTSIDE THE REGION
Integrated Media
Bill Walker is at the other end of the phone at his Chicago trade magazine publishing company. The story he's telling isn't uncommon. His trade association tends to be dominated by the larger publishers. So some of the small publishers formed a sub-group to discuss their unique issues and needs.
From this increased networking came the suggestion to form a buying organization of small publishers that would enable them to benefit from a better economy of scale. A few phone calls and discussions later, several members of the group found themselves at the 2004 National Cooperative Business Association's annual purchasing co-op conference in Chicago (see calendar below for this year's conference).
Up and running
Between last October and March, 2005, Walker and others attracted ten members willing to put up the $10,000 membership equity. Included are publishers from San Francisco to New York, with names like Northstar Travel Media, LLC; Meister Media Worldwide; Douglas Publications, LLC, and Farm Journal Media. The group hired well-known co-op attorney Gary McDavid to help draft the membership agreements. They also hired another co-op, Main Street Business Services, to provide business services.
Integrated Media Cooperative held its first meeting on March 16, 2005. The co-op buys paper together-a major benefit, as the price of paper has skyrocketed in recent years-as well as telemarketing and business services. They look forward to sharing printing, outsource fulfillment, shipping and other functions.
"It seems to be working," Walker says. "All the members are behind it, they're using the services we provide. I'm still believing."
BULLETIN BOARD
Calendar
Sept. 14, Chicago, IL: 'Capital without Compromise' seminar will focus on how both large and small co-ops can raise capital while maintaining member control. Teleconference link available. Held in conjunction with NCBA's annual Conference for Purchasing Co-ops Sept. 15-16. Register online at http://www.ncba.coop/conferences/conf3/conf_register.cfm.
Sept 14-17, Kansas City, MO: National Association of Housing Cooperatives 2005 Annual Conference. (202) 737-0797 x323 to register or print forms downloadable from: www.coophousing.org.
Sept 18-23, Cartagena, Colombia: International Co-operative Alliance biennial General Assembly. FMI: www.icacartagena.coop
Sept. 21, Bangor, ME: Cooperative Business Development Conference, with keynoter Bill Patrie, value-added agricultural co-op guru; also Margaret Bau on home care worker co-ops, Patrick Deluhery on legal aspects, Terry Lewis of National Co-op Bank and Ray Nowak of Maine Farm Credit, plus more. FMI contact Valarie Flanders: valarie.flanders@me.usda.gov.
Sept. 24-27, San Francisco, CA: Credit Unions National Association's CUNA 'Future Forum', with seven workshop tracks (security/risk mgmt, volunteer/governance, community charter, sales/marketing, etc.) and keynote speakers author and former Naval Commander Mike Abrashoff; Carolyn Kepcher, Executive VP of the Trump Organization; and Mike Eruzione, Captain of the 1980 U.S. Olympic Hockey Team. FMI: http://training.cuna.org/.
Sept. 28-30, Burlington, VT: The Future of Rural Entrepreneurship & Community Development in the Northeast. Ensuring the presence of co-op entrepreneurship on the agenda are Don Jamison, ED of Vermont Employee Ownership Center and Lynda Brushett of CDI, who will conduct a workshop on 'Building an Economic Base through Alternative Ownership Models'. FMI: www.regonline.com/whatworks.
Oct. 6-9, Plainfield, VT: Action in Place Conference: Promoting Community and Environmental Sustainability. Goddard College hosts 50-plus community leaders, activists, educators, artists, and scholars who will present initiatives for community, economic, and environmental sustainability. Reduced registration fee until September. 16. FMI: http://www.goddard.edu/academic/actioninplace.html.
Oct. 19-22, Los Angeles, CA: National Community Capital Association expects 600-plus community development finance institutions to attend its 21st annual bash 'On the Road to Scale: What's Now? What's New? What's Next?' for CDFI directors, bankers, foundation staff, investors, government officials, journalists, etc. FMI: www.communitycapital.org.
Oct. 21-23, Burlington, VT: Women in Sustainable Agriculture 2005 conference 'A Celebration of Hope and Opportunity' is a collaboration of the Women's Agricultural Networks (WAgN) and sister organizations around the country. Each year an increasing number of U.S. farms are owned and/or operated by women. FMI: www.uvm.edu/wagn.
Nov. 1-3, Manchester, NH: Advancing Sectoral Strategies in Manufactured Housing, offered by NH Community Loan Fund and SNHU School of Community Economic Development. "New Hampshire is 20 years ahead of the rest of country with respect to manufactured housing," Dr. George McCarthy, Program Officer, Ford Foundation. "You saved us two years in two days," Tom Guettler, Northcountry Cooperative Development Fund, Minnesota. FMI: Deb Wyman at dwyman@nhclf.org or www.theloanfund.org.
Nov. 4-5, Woodstock, VT: Vermont Credit Union League's 2005 Volunteer Leadership Conference featuring Mark Lynch, one of the most sought after speakers in the credit union movement. FMI: www.vermontcreditunions.com/support/education/leadership.htm.
Nov. 4-5, Durham, NH: New England Farmers' Market Coalition in partnership with the NH Association of Farmers' Markets, UNH Office of Sustainability Programs and USDA invites current and prospective members of the coalition to its 2005 meeting and workshop, a great learning and networking opportunity. FMI: www.farmersmarketcoalition.com
Nov. 11-13, Ann Arbor, MI: North American Students of Cooperatives (NASCO) will hold its annual Institute, a three-day cornucopia of workshops, discussions, networking, and solidarity building presented by the nation's number one developer of on- and off-campus student-controlled housing cooperatives that afford their residents life-altering opportunities to hone their democratic decision-making skills and cooperative communications capabilities. FMI: www.nasco.coop.
Announcements
CHECK THIS OUT! The official National Co-op Month web site contains updated print ads highlighting cooperatives' (including credit unions) commitment to their communities, which is this year's theme. Ads come in 4-color or B/W in various sizes. They allow insertion of a logo, and can be downloaded in PDF or Quark format.
The online 'Co-op Month Toolkit' features a downloadable Co-op Month logo, the print ads, draft news releases and opinion articles, plus examples that illustrate ways co-ops benefit their communities. And, it includes dozens of practical and creative ideas about how to celebrate national Co-op Month this October in your community! FMI: www.coopmonth.coop
Plainfield Co-op, a small food cooperative near Montpelier, VT, has an immediate opening for a general manager. Experience in finances, retail sales, management and cooperative organizations desired. FMI contact Lee Light at (802) 454-7725.
Community Development Credit Union Report compares the performance of CDCUs to that of Federally Insured Credit Unions and found that in 2004, CDCUs experienced higher growth in assets, loans, shares, and net worth than FICUs in the same period. The report also found that CDCUs were merged or liquidated at a higher rate than FICUs in 2004, although the rate was similar to that of small mainstream credit unions. The report, Financial Trends in Community Development Credit Unions: A Statistical Analysis (January 1 - December 31, 2004) is available at www.natfed.org or contact Rafael Morales at (212) 809-1850, Ext. 206 or rmorales@cdcu.coop.
Vermont Credit Union League's great online newsletter NewsLine Express is now archived at www.vermontcreditunions.com/news. For nearly three years the weekly e-letter has kept readers informed about the struggle of credit unions against members of the banking industry who've mounted a national, well-funded, ironically misinformed campaign trying to paint credit unions as not contributing their fair share to the well-being of their communities.
CO-OP VALUES IN ACTION
(9) Social Responsibility and (10) Caring for Others: Organic Valley
Organic Valley Family of Farms, the nation's leading farmer-owned organic cooperative, made the headlines of the National Cooperative Business Journal recently when the farmer-owners decided to pull out of a deal with Wal-Mart to sell their organic milk.
CB Journal picked the story up from Gourmet magazine, which reported that when the world's wealthiest company asked the co-op to lower its milk prices, Organic Valley CEO George Siemon honored his promise to the member-owners not to do that. (He had also promised not to offer Wal-Mart a discount, or let the account grow so large that it made the co-op dependent on the investor-owned retail giant.)
"The Wal-Mart buyer was absolutely stunned," the article quotes an Organic Valley executive as saying. "No one had ever called him up to say ['No']."
Consumers are less familiar with the Organic Valley beef line, which is growing as people become more concerned over health hazards of non-organic food. Earlier this summer, Michael Levine, president of Organic Prairie Family of Farms, issued a position statement on Mad Cow disease or bovine spongiform encephalopathy (BSE). Organic Prairie is a wholly owned subsidiary of Organic Valley Family of Farms.
Levine's statement emphasized the weaknesses of current standards, testing and regulations. The best solution for the public at present, he said, is to "use the precautionary principle and purchase certified organic meat. Organic certification standards strictly prohibit feeding any rendered animal by-products to any other animals.
"Also, because of the strict documentation process required in organic production, all animals are traceable throughout their life cycle (from before birth). Records are kept on feeding practices, and all records are inspected by an independent third party as part of the organic certification process," the statement continues.
"Organic production also emphasizes humane treatment as well as the ability for animals to engage in natural behaviors, including grazing on pasture when seasonally available...and it translates into safer, high quality meat." FMI: www.organicvalley.coop.
Values in Action Update
In late August, South Mountain Company (see Values in Action, CL 35) was selected by Business Ethics magazine to receive this year's Employee Ownership Award. FMI: http://flaminggrasshopper.com/archives/001447.html.
Each month we tell stories that embody one of the Seven Co-op Principles or two of the Ten Co-op Values approved by the International Cooperative Alliance www.ica.coop/ica/. We are eager to hear YOUR suggestions!
CDI SERVICES
FMI: (413) 774-7599 or info@cdi.coop.
The Cooperative Leader is produced as a service to the regional community by the Cooperative Development Institute, which is dedicated to developing and strengthening cooperative enterprise in the Northeast. CDI staff and consultants provide comprehensive support services, including the following:
* Customer service training
* Annual evaluations (manager, board, co-op)
* Business and strategic planning
* Executive search
* Board and management development
* Membership development
* Cooperative start-ups
* Fundraising
* Legal and personnel issues
* Public policy advocacy
CO-OP QUIZ 036: As of December 2004, how many credit unions were there in New England and New York State, and how many member-owners did they have, all together?
Anwer to Q035: The Farm Credit Act of 1933 'helped institute Production Credit associations that provided farmers with reasonable operating loans and established thirteen Banks for Cooperatives (now merged into one called CoBank)..." (fr. revised version of Cooperative Principles and Practices in the 21st Century, pub. 2004 by Univ. of Wisconsin-Cooperative Extension: cecommerce.uwex.edu)?
TO CONTACT COOPERATIVE LEADER
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Cooperative Leader Staff
Lynda Brushett, Senior Editor, brushett@metrocast.net
Jane Livingston, Principal Writer and Editor, mejane@gwi.net
Laurie Siggillino Broussard, Production Manager, lbroussard@cooplife.coop