About On Co Op


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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.
  • About On Co Op

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