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Forum Post: Cooperatives & crowd funding

Posted 2 years ago on June 3, 2012, 1:26 p.m. EST by francismjenkins (3713)
This content is user submitted and not an official statement

Technology ventures now have the opportunity to be socially and environmentally responsible in their legal charter. Unlike corporations and other forms of business, cooperatives are legally allowed to address concerns for sustainable economic development--and not only be held to the standard of profit maximization for shareholders.

Lack of financing has previously been a barrier to forming technology ventures as cooperatives, but the recent emergence of crowdfunding sites and the passage of the JOBS Act changes this landscape significantly. Instead of conventional VC (venture capital), we may start to see the emergence of "CV (community venture)” funding?

Sessions will cover such topics as sustainability and large-scale growth. In the session "Crowd Funding, Technology Startups and Cooperatives: A New Era of Innovation?," participants will explore what’s happening with technology innovation and cooperatives around the world, focusing on crowdfunding as a potentially game-changing strategy for financing. Luan Cox will present GreenUnite.com’s crowd financing platform for socially and environmentally responsible projects; Michael Peck from Mondragon USA will explore how the world’s largest worker cooperative approaches technology and innovation; Jon Guice of Combined Power Cooperative will discuss their model for a cooperative renewable energy technology startup.

http://www.altaterra.net/events/event_details.asp?id=234755

21 Comments

21 Comments


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[-] 3 points by friendlyopposition (574) 2 years ago

We don't often agree - but I agree with you on this. I like the idea of getting together inside the community, and making something happen. It is very difficult for anyone to find fault with this plan since it basically self-contained. The community takes the risk, does the work and hopefully reaps the reward.

[-] 0 points by jph (2652) 2 years ago

yes, there is no need to 'get permission', or wait for the 1% to do what needs to be done,. we can get together and start working on these things now. Crowed-sourcing the funds is a new development made practical by our networks and communities.

[-] -2 points by AudacityOfDrones (-34) from Chicago, IL 2 years ago

So you think HR3606 was a good thing, then. Why?

[-] 1 points by jph (2652) 2 years ago

I don't see how it applies,. all the crowd funding I have seen is not 'investing' or gaining 'shares' it is gifting money, for the use of the project with the possible return of rewards or perks if all goes well,.

see; http://www.kickstarter.com/ or http://www.indiegogo.com/ or whatever,. . http://en.wikipedia.org/wiki/Crowd_funding

[-] 2 points by francismjenkins (3713) 2 years ago

Sales per employee was calculated for each EO firm, and for each matching KO firm (for multiple matches, an average sales per employee for the group of matching firms is used). Using a matched-pair differences test, sales per employee is substantially and significantly higher for the employee-owned group of firms. This “employee-owned advantage” is significantly greater among smaller firms, and (holding firm size constant) improves as the dollar value of the average employees’ ownership stake in firm stock goes up. Holding both firm size and employee stake constant, the employee-owned advantage is substantially (though not significantly) greater in the large group of firms which are 100% owned by their ESOP Trusts.

http://www.community-wealth.org/_pdfs/articles-publications/esops/paper-kramer.pdf

The above excerpt is from a doctoral thesis by Brent Kramer, CUNY graduate center, department of economics (2008). There's other studies as well (notably, an earlier study was done at Rutgers, which makes the same conclusions).

Kramer begins by making an important observation:

Many theorists have suggested that the rarity of employee ownership is prima facie evidence that such firms could not be as efficient as traditional firms, because otherwise they would be more common. But institutional and financing constraints may be a more realistic explanation for their rarity . . . .

Here's a Wiki article with a listing of major employee owned companies:

http://en.wikipedia.org/wiki/List_of_employee-owned_companies

Employee owned companies are becoming more commonplace among the Fortune 100:

http://www.esopassociation.org/media/media_fortune100_pressrelease.asp

There's even some tax advantages in the ESOP model (at least for closely held companies):

http://www.esopassociation.org/about/about_tax.asp

And this idea is catching on (and not just among activists like ourselves):

http://www.usnews.com/opinion/blogs/economic-intelligence/2012/05/31/why-we-need-more-employee-owned-businesses

Imagine a collection of companies that are not only employee owned, but also care about our world in a real way. Many manufacturing operations have a real problem complying with environmental regulations, and can't afford to implement best practices when it comes to mitigating pollution. I can envision collaboration between employee owned firms, where they cluster in close proximity to each other, so they can share pollution control technology (and share the expense of that technology).

There's numerous possibilities, and I think we're already seeing a slow movement towards the employee owned model, but I think the most profound need for this is in our poor communities (and this is the best opportunity for concerned activists to make a real difference).

For more info on employee owned companies:

http://www.nceo.org/

[-] 2 points by jph (2652) 2 years ago

This is something I have also been considering, crowd-funding is an interesting development,. people are now able to support projects that they want to see happen,. we see this for simple things like films, books, video-games, and on and on,. stuff people want,. it is working very well in many areas, so why not some alternative socioeconomic experiments?

Why not fund and build an eco-village, a green energy system, a worker owned and operated collective factory the builds new green tablet computers here in america?!? There is no reason to wait for the 1% to do what needs doing,. they will never anyway, as they have shown,. self interest in a bubble is all they know,. they are too self-absorbed to see that we need to change from this conspicuous over consumption and move forward to a new human community based way of life,. we can however just move forward without 1% support, or even in the face of their opposition. The future will happen as soon as we commit to it.

[-] 2 points by francismjenkins (3713) 2 years ago

That's an ambitious project (to manufacture tablets you're talking serious engineering, very expensive machinery, etc.). I would think to start out with, upstart clothing designers may want to start up a small manufacturing operation, grocery stores (and various types of retail stores), healthcare clinics or home healthcare, internet start ups, artistic endeavors, laundry mats, and the list goes on and on.

Something like a tablet manufacturing operation at least requires serious intellectual capital (electrical engineers, maybe a physicist, chemists, industrial engineers, people who already understand how to set up this sort of operation, etc.). Not saying it's out of reach, just much more challenging than the other stuff I mentioned.

The thing is, with any labor intensive manufacturing operation, you'd still face the same problems American manufacturers face in general (competition from low wage countries). With something like clothing, it's perfectly conceivable that domestic production can have a competitive advantage. They can get goods to market faster, they're closer to their market, so they can respond to changing demand much quicker, etc.

[-] 1 points by jph (2652) 2 years ago

Tablet computers may be 'high-tech', however they are by no means beyond our reach to produce. Any product we see now can be produced by a collective, just as easily as a hierarchical corporation. The skills and knowledge are the same, only the organizational structure changes. Look to the growing number of Hacker-Spaces to find a vast resource of engineering talent that is generally predisposed to collectivism and anti-capitalist ideals. [ http://hackerspaces.org/wiki/List_of_Hacker_Spaces ]

I see these types of crowed-funded initiatives as a step above standard capitalism. Look at something like Raspberry Pi [ http://www.raspberrypi.org ] Yes, the end product is a great one, An ARM GNU/Linux box (computer) for $25. But many people are also interested just for the 'business' model. Raspberry Pi Foundation is a UK registered charity. They have a program, when you do buy one, you can buy two and donate one to a kid that can not afford one on their own. The idea being that a cheap, tinny, low-energy use computer, is to encourage kids to learn about computer science, and experiment with programming software and even hacking the hardware itself. Many people support them for these reasons beyond just a cool product. Americans will support good products made by their neighbors, working in autonomous collective co-ops, that bring life back to the american economy, while expanding the democratic process. As the post here points out, current law creating 'corporations', requires profits over any other consideration,. this is what is really killing the planet,. greed with no bounds! New organisational structures are needed to start to reverse the terrible toll taken by the corporate-greed based system.

So yes any product, simple or complex, can be created, built, and sold by small or large groups of people organised in worker owned and operated democratic cooperatives. This is an important step to turn the tide of greed for greed's sake.

[-] 1 points by francismjenkins (3713) 2 years ago

I think I stand corrected ... you just reminded me of something I always wished for, an off the shelf computer with Linux preloaded (and the computer itself maximized to run Linux as its operating system). This would surely be marketable (I think most heavy computer users would like an alternative to Windows, without being forced to first buy a computer with Windows, for which we pay an extra $100 or $200 for, and then getting rid of the part of the computer we paid the most money for, Windows, in order to run Linux). There are platforms that allow us to run both Windows and Linux simultaneously (like Umbutu), but you basically just run Linux as an application (not really the same thing, and you don't get all the benefits of Linux).

[-] 1 points by jph (2652) 2 years ago
[-] 1 points by PeterKropotkin (1050) from Oakland, CA 2 years ago

Good post.

[-] 1 points by TitusMoans (2451) from Boulder City, NV 2 years ago

This is exactly what's needed. If workers own the businesses, they reap the profits benefitting all who work from janitors to top managers.

[-] 1 points by francismjenkins (3713) 2 years ago

Indeed, and not only that ... but employee owned companies can help us gain a competitive advantage over low wage countries (in the area of manufacturing), because the profit requirements are less, worker owned companies tend to be more productive, and they also tend to survive longer.

[-] 1 points by TitusMoans (2451) from Boulder City, NV 2 years ago

I saw a doctor, an activist, on one website actively promoting worker-owned businesses and trying to organize people into different ventures. I'll try to find that website again and post the link.

[-] 1 points by jph (2652) 2 years ago

So many benefits, it is crazy not to get this going stronger.

[-] 1 points by beautifulworld (20940) 2 years ago

This is great stuff. Thanks for posting it.

[-] 1 points by LeoYo (5767) 2 years ago

Sounds great.

[-] 1 points by francismjenkins (3713) 2 years ago

I imagine this concept could be used in a variety of applications. Food cooperatives, manufacturing, retail, healthcare, etc. The big problem I keep hearing from people who work in this area, is finding financing for these projects (and this seems like an interesting and innovative alternative).

[-] 2 points by LeoYo (5767) 2 years ago

CrowdFunding is a very old and successful idea. Without it, there would be no non-state supported religious institutions. Every church, every mosque, every synagogue, Buddhist temple, Hara Krishna temple, etc., is the product of community pooling of resources for a non-profit endeavor. As such, there's no reason that people can't do the same for a valued non-religious profit endeavor.

OWS is in a unique position to fund cooperative ventures through crowdfunding. If at least a million people were to be affiliated with OWS, a $1 contribution from each, held in a credit union, could go towards funding some cooperative project such as a discount variety store outlet in direct challenge to a local Wal-Mart outlet. Depending on the cost of funding an outlet, this process could be repeated on a regular basis until every Wal-Mart outlet is matched by a Consumer Value Cooperative (CVC) outlet that will enable CVC to challenge Wal-Mart as the #1 employer.

[-] 1 points by francismjenkins (3713) 2 years ago

Great idea, although I'm not sure OWS has the appropriate organizational structure to do something like this. What I think OWS could do (its working group on cooperatives) is serve as a clearing house of sorts. There's plenty of existing cooperatives (in not only retail, but various types of businesses). Promoting cooperation among cooperatives is a good place to start (e.g. cooperatives could make their purchases from other cooperatives wherever feasible, and this could be facilitated by developing an online platform and database). Then there could be an effort to connect these cooperatives with crowd funding (there's existing crowd funding cooperatives that specialize in helping other cooperatives), and it would also be important to connect cooperatives with consulting services (either existing consultants that specialize in cooperatives, or perhaps try to enlist a university, and develop a consulting organization within an OWS working group).

[-] 1 points by LeoYo (5767) 2 years ago

A Cooperative Party could even arise as the number of cooperatives grow and people recognize a need for a party that has their economic interests in mind.