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A presentation providing an overview of the Ontario Co-operative Association and the Ontario co-operative sector.

A presentation providing an overview of the Ontario Co-operative Association and the Ontario co-operative sector.

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  • Co-op structure – not organized as profit/NFP Share Capital vs Non-share capital: Share capital refers to shares offered by the co-op to members or outside investors. Often called member equity. Often used to buy equipment, land, or other fixed assets. Incorporating without share capital means that the co-op must rely on debt financing to raise money. Fine for covering operating expenses such as supply purchasing. Co-ops can combine debt financing with share capital. Shares pay a return to members. On Co-op is organized as a co-op without share capital. In BC, the BC Co-op Association has share capital and pays dividends back to members. Revenue and distribution of surplus Revenue used to buy assets and pay expenses. In co-ops surplus can be distributed to members through patronage, which is usually distributed based on how much business a particular member does with the co-op. payments can be in cash or in additional patronage loans.
  • For co-ops: Non profit does not mean NO profit NFP – community focus Co-ops better the lives of their members (not always the same); membership is the end benefit, community is ancillary In Canada. Profit/NFP is defined by Canada Revenue Agency. Essentially means that the organization does not operate with the primary purpose of generating profit.

Transcript

  • 1. A journey into the Ontario Co-operative Association and the Ontario co-operative sector. Ontario Co-operative Association 450 Speedvale Avenue West, Suite 101 Guelph, Ontario, Canada N1H 7Y6 Tel: 519.763.8271 Fax: 519.763.7239 Toll Free: 1.888.745.5521
  • 2. Overview
    • About On Co-op
    • Ontario’s Co-op Sector
    • What is a co-op?
    • Co-op models
    • Why choose a co-op?
    • Types of Co-ops
    • What’s the difference between a co-op and other forms of enterprise?
    • Key success factors
  • 3. About On Co-op
    • On Co-op represents 85% of anglophone Ontario co-ops
      • One of 8 similar associations across the country
      • Incorporated as a co-op without share capital
    • MISSION - Lead, cultivate & connect co-ops through:
      • Government Relations
      • Member Relations and Communications
      • Co-operative Development
      • Lifelong Co-operative Learning
  • 4. Ontario’s Co-op Sector
    • 1300 co-ops in Ontario
      • 1900 locations in 400 communities
    • Key sectors –
      • Housing (587 co-ops = 45%);
      • Financial (227; 17%);
      • Child Care (216; 17%);
      • Agriculture (77; 6%)
        • Other: (15%) funeral, renewable energy, social, retail, CED, education, organics, arts, transport
        • 1.4m members; 49k volunteers (10k directors)
    • Regulated by Financial Services Commission of Ontario (FSCO)
  • 5. What is a co-op?
    • Co-ops are member-owned enterprises
      • Primary purpose is to meet the needs of members
    • An internationally recognized business model
      • Incorporated under provincial or federal legislation
      • Similarities to not-for-profits and private businesses
      • Can be used in virtually all business scenarios
    • Democratically controlled: One-member, one-vote, regardless of business done with co-op or investment in co-op
  • 6. Basic Co-operative Structure
  • 7. Why choose a co-op?
    • Economies of scale: Bulk buying; sharing of costs and expenses; joint processing or branding
    • Accountable & inclusive: Open to everyone; each member has equal vote regardless of investment; local decision making
    • Build stronger communities: Most co-ops are community based - investment and surplus stays in the local community; collaboration
    • Members’ needs met: may not always be ROI
  • 8. Why choose a co-op?
    • Benefits to member-owners and users:
      • Investment and economic contribution
      • Value added
      • Democratic functioning and collaboration
    • Self-determination: Member ownership makes co-ops less vulnerable to takeovers by outsiders
      • Co-ops can own non-co-op subsidiaries or businesses
    • Multiple bottom lines – financial, social and environmental
  • 9. Types of Co-ops
  • 10.  
  • 11.  
  • 12.  
  • 13.  
  • 14. Co-ops vs. Business Corporations
    • CO-OPERATIVES
    • Exist to meet needs of members
    • Accountable to members
    • Surplus distributed to members
    • One member one vote
    • Board represents members; directors must be members
    • Shares generally not traded
    • BUSINESS CORPORATIONS
    • Exist to maximize ROI
    • Accountable to shareholders
    • Unlimited return on shareholder capital
    • Vote based on number of shares held
    • Board represents shareholders; director may not be shareholder
    • Shares may be traded
    Refer to detailed comparison sheet for more details Download from www.ontario.coop/toolkit (Factsheet section) OR http://ontario.coop/upload/Co-op%20Comparison%20-%20other%20business%20models-2009.pdf
  • 15. Co-ops vs. Not-for-Profits
    • CO-OPERATIVES
    • Always member controlled
      • One member one vote
    • Mandated to meet the needs of members
    • Board of Directors elected from membership
    • Operate under CC Act or CU&CP Act; with or w/out share capital
    • Surplus & patronage may be distributed to members
    • NOT-FOR-PROFITS
    • Usually member controlled
      • Membership voting classes
    • Broader mandate to the community
    • Board of Directors elected from membership
    • Operate without share capital under Ontario Corp. Act
    • Surplus kept to further goals and objectives of organization
    Refer to detailed comparison sheet for more details Download from www.ontario.coop/toolkit (Factsheet section) OR http://ontario.coop/upload/Co-op%20Comparison%20-%20other%20business%20models-2009.pdf
  • 16. Myths and Misperceptions
    • Co-ops are not profitable
    • Co-op values are incompatible with running a successful business
    • It takes too long to make a decision
    • You have to be a member to benefit from/use the goods and services of a co-op
    • Co-ops are not competitive
    • Co-ops are poorly managed and under-funded
  • 17. Challenges for Co-ops
    • Model is still not widely understood by public and potential supporters
      • Can be challenging to recruit /maintain members
      • Can be difficult to obtain financing
    • Regulatory regime is not as facilitating to growing and supporting co-ops as it could be
    • Lack of support and recognition from government limits growth and support through traditional business development channels
  • 18. Opportunities
    • Many sectors are experiencing growth/renewal
    • This can make it easier to find examples, templates and expertise
      • Local/organic food
      • Child care
      • Rural and community based stores and services
      • Renewable energy
      • Social co-ops
  • 19. Contact Information
    • Denyse Guy
    • Executive Director
    • Ontario Co-operative Association
    • 1.888.745.5521 x27
    • [email_address]
    • Audrey Aczel
    • Public Affairs Manger
    • Ontario Co-operative Association
    • 1.888.745.5521 x24
    • [email_address]
    • Jen Heneberry
    • Co-operative Development Manager
    • Ontario Co-operative Association
    • 1.888.745.5521 x23
    • [email_address]
    Kerr Smith Education Manager Ontario Co-operative Association 1.888.745.5521 x29 [email_address] Mark Ventry Membership & Communications Manager Ontario Co-operative Association 1.888.745.5521 x30 [email_address] Jennifer Ross Office Co-ordinator Ontario Co-operative Association 1.888.745.5521 x22 [email_address]