Co-op Cincy looks to sustain local businesses and jobs

By Karen Kahn

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According to Roy Messing at the Ohio Employee Ownership Center at Kent State, even before the pandemic, “5500 Southwest Ohio businesses were at risk of closing due to a lack of a viable succession plan.” With COVID-19 having pushed the U.S. economy into recession, many more small businesses are at risk of closure. That could lead to a significant loss of jobs that would further undermine the region’s economy.

In the face of these pressures, the nonprofit cooperative incubator Co-op Cincy is partnering with SEED Commons, a national financial cooperative, to create the Business Legacy Fund, a multimillion dollar continuity fund that will finance employee ownership transitions. …


New report calls for broadening employee ownership, among other recommendations

By Karen Kahn

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The American Sustainable Business Council (ASBC) has released a comprehensive set of recommendations for creating an economy that works for all. As Jeffrey Hollender, CEO of ASBC, and Maya Fano-Caroti, ASBC policy assistant, write in the preface of the new report, the COVID-19 crisis has laid bare the truth: “our current system of capitalism does not work for most Americans.”

A May 2020 JUST Capital/Harris Poll confirmed that the vast majority of Americans agree: 75 percent of respondents indicated they believe “our current form of capitalism doesn’t ensure the greater good of society.”

Among the key recommendations is the expansion of employee ownership, through Employee Ownership Stock Plans (ESOPs) as well as worker cooperatives and other less well-known ownership structures.


The International Center for Employee Ownership will provide a base for more effective education and advocacy

by Karen Kahn

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Artist’s rendering of rooftop space at the new International Center for Employee Ownership.

The ESOP Association (TEA) and the Employee Ownership Foundation announced plans to open the International Center for Employee Ownership, a new headquarters on Capitol Hill that will support a robust program of advocacy and education. In addition to housing offices for TEA and foundation staff, the new space includes a conference facility, meeting rooms, and training spaces as well as a digital studio to produce broadcast quality audio-visual content for online sharing. With a rooftop deck overlooking the Capitol, it’s clear that TEA is making a move to increase its influence among the nation’s lawmakers.

TEA is in the process of launching an Employee Owners Action Network to lead its constituency advocacy on Capitol Hill.


A COVID-19 recovery strategy that puts workers first

by Karen Kahn

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Tijuana Flats closed this Richmond, VA, location as a result of the pandemic.

As the country moved to shutdown the economy in mid-March, Jason Wiener, a Colorado attorney whose legal firm is committed to building a values-driven, sustainable economy, had an idea: “Let’s make restaurants work for workers rather workers working for restaurants.” Wiener was already thinking ahead. Concerned about the fate of local businesses and the millions of workers who were losing jobs, he also saw an opportunity for “a phoenix to rise from the ashes.”

Wiener has spent years supporting the conversion of businesses to employee ownership. But as he told me in a recent interview, conversions are slow and resource intensive. Converting one business at a time, the regenerative economy will be a long time coming. As he took in the economic devastation about to unfold in the wake of COVID-19, he realized that Main Street businesses like restaurants would be the hardest hit — they couldn’t go remote — and the most marginalized workers (women, people of color, and undocumented workers) would suffer the consequences. …


Dr. Christopher Marquis discusses stakeholder-driven business, employee ownership, and the future of capitalism

by Karen Kahn

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In his new book, Better Business: How the B Corp Movement is Remaking Capitalism, Christopher Marquis tells the story of the non-profit B Lab and how it has spurred a movement for accountable capitalism worldwide. B Lab created a process for evaluating and certifying a range of company practices, holding mission-driven businesses accountable for their environmental and social impacts. Firms that engage in this process and are certified by B Lab are called certified B Corporations.

Among the areas where B Corps tend to do better than their traditional counterparts is in how they value and treat their employees. B Corps see their workers as assets and invest in their performance rather than seeing the workforce as an expense to be contained. Though employee ownership is not required, B Corps earn extra points in their B Impact Assessment for employee ownership. Moreover, many employee-owned companies have chosen to become certified B Corps to strengthen their commitment to, and protect, their social mission. …


New publication outlines best practices for investors, asset managers and others

by Karen Kahn

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Harpoon Brewery became employee owned in 2014.

The novel coronavirus has permanently shuttered tens of thousands of businesses, leaving millions of employees jobless in a perilous economy. The pandemic has had a particularly devasting impact on Black- and Latinx-owned businesses, with one study estimating that the number of Black business owners has been reduced by 40 percent and Latinx, by 32 percent, since February 2020.

In traversing these turbulent waters, thousands of business owners will need to reassess their operations and finances and consider whether they can rebuild. To temper the crisis and build a more equitable and resilient economy in the process, impact investors — individual and institutional — are looking to take employee ownership to scale, a trend we wholeheartedly endorse at Fifty by Fifty. …


100 firms became employee owned in the last year, an increase of 28 percent

by Karen Kahn

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The UK is making a concerted effort to grow its employee ownership sector-and it appears to be working. A recent survey by the White Rose Centre for Employee Ownership, published by the Employee Ownership Association, the UK’s employee ownership trade association, identified 470 employee-owned businesses, an increase of 28 percent in 2019. According to the researchers, there are likely an additional 300-plus very small worker cooperatives that are not included in the survey results.

Over half of conversions from traditional ownership to broad-based employee ownership — defined as at least 25 percent of ownership shares held by employees — have occurred since 2017, according to the Employee Ownership Association. …


The latest stories from Employee Ownership News highlight how cooperatives and democratically run ESOPs offer people of color better jobs and expanded opportunities for building assets. Among ESOP participants, people of color have significantly more savings than their non-owner counterparts. People of color are also leading in launching new worker cooperatives that give members more control over their work lives.

Race, Equity and the Transformative Power of Employee Ownership

Todd Leverette, co-director of Legacy Business Initiatives for the Democracy at Work Institute, appeals to impact investors to provide the financing to scale employee ownership.

Formerly Incarcerated Women Launch Chicago Worker Cooperative

ChiFresh Kitchen is preparing healthy meals and delivering them to Chicago residents facing food insecurity as a result of the pandemic. …


Debating the risks and rewards of ESOP participation

by Martin Staubus

In June, Employee Ownership News published a commentary from Bret Keisling, It’s Time to Reconsider Bankruptcy Protections for ESOP Participants. In the face of an unprecedented economic recession, Keisling, host of the ESOP Podcast, raised crucial questions regarding the risk bankruptcy poses for Employee Stock Ownership Plan (ESOP) participants. In the following article, Martin Staubus, former executive director of the Beyster Institute, offers a counterargument, suggesting that a certain degree of risk is inescapable when investing in equity and can’t be structured away through new bankruptcy rules. And, he says, that may not be entirely a bad thing.

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In June, Fifty by Fifty’s Employee Ownership News laid out some thoughtful new ideas for advancing the practice of employee ownership. It’s encouraging and inspiring to see all these creative juices flowing. We certainly need new ideas in our field. …


Using business and finance tools to build community wealth

by Karen Kahn

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The vision for Obran began with Core Staffing, a business founded by returning citizens unable to find work in Baltimore City.

“Our core mission is member empowerment and education,” says Joseph Cureton, chief coordinating officer at Obran Cooperative. “We want our members — i.e., individual worker owners — to feel empowered to use the co-op for their benefit. It is, therefore, incumbent on us to educate them on how to do that.”

From Co-op to Conglomerate
Obran is a cooperative conglomerate. Incorporated in Colorado as a Limited Cooperative Association (LCA), the cooperative is a holding company that is using a mergers-and-acquisitions approach — typically the tools of the traditional business world — to acquire firms; improve their operations through cooperative principles, participatory management, and centralized back-office functions; and create profits for its individual members to build better lives. …

About

Fifty by Fifty: Employee Ownership News

Working to grow employee ownership in the U.S. to 50 million by 2050. Learn more at http://fiftybyfifty.org and http://medium.com/fifty-by-fifty

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