Cooperatives: The Washington (and Beyond) Perspective


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  • If we can Add IWDC 2009 Owner’s Meeting that would be cool thanks
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  • 652 Billion—is 30% of what the Top Ten Fortune 500 Generate in the US each year Represents 1% of GDP Released in Spring 2009 First-ever statistical study of cooperative businesses in the U.S. Study broke down co-ops into 4 sectors : Sales and marketing : agriculture, grocery, purchasing, other consumer Social and public service: housing, health care, childcare, transportation, education Financial services: credit unions, farm credit, mutual insurance Utilities: electric, telephone, water and waste, biofuels
  • Jim the 2 sites above are the ones that need to go on this slide or in addition too. thanks
  • Jim need a a huge ? Mark to fly in
  • Cooperative Capital Fund (CCF) At risk, patient capital for start up and growth activities of cooperatives Technical expertise Cooperative Capital Investments or contributions from cooperative community, e.g., % of earnings or dollar amounts Outside Private Capital Venture capital Community capital Other private capital Public Financing SBA programs CDFI, NMTC USDA REDLG B&I guarantee Fed and state tax credits One time appropriation Cooperatives [and other businesses] that receive at risk capital At risk capital for start up or growth activities Businesses agree to pay back via ongoing tithe depending on success and earnings
  • Cooperatives: The Washington (and Beyond) Perspective

    1. 1. Cooperatives: The Washington (and Beyond) Perspective By Adam Schwartz Vice President of Public Affairs & Member Services National Cooperative Business Association [email_address]
    2. 2. Washington, DC aka Disney on the Potomac
    3. 3. NCBA’s Mission To Develop, Advance & Protect Cooperatives from all Sectors
    4. 4. Connecting Co-ops Media Other Co-ops General Public Government Co-ops
    5. 5. NCBA Benefits
    6. 6. The Seven Cooperative Principles <ul><li>Voluntary and open membership </li></ul><ul><li>Democratic member control </li></ul><ul><li>Member economic participation </li></ul><ul><li>Autonomy and independence </li></ul><ul><li>Education, training and information </li></ul><ul><li>Cooperation among cooperatives </li></ul><ul><li>Concern for the community </li></ul>
    7. 7. U.S. Data on Cooperatives <ul><ul><li>29,284 cooperative firms </li></ul></ul><ul><ul><li>72,993 establishments </li></ul></ul><ul><ul><li>2 million plus jobs </li></ul></ul><ul><ul><li>$652 billion plus in revenue </li></ul></ul><ul><ul><li>$133.5 billion in income </li></ul></ul><ul><ul><li>$3 trillion in assets </li></ul></ul>
    9. 9. Connecting Indiana Co-ops to all Cooperatives Indiana Cooperatives State Affiliates ICA Globally Connected NCBA Other National Organizations
    10. 10. NCBA’s Overall Public Policy Priorities <ul><li>Secure Private and Public Sources of Funding for Cooperatives </li></ul><ul><li>Promote Co-op Development </li></ul><ul><li>Defend the Co-op Model of Business </li></ul>
    11. 11. NCBA and Capitol Hill
    12. 12. Health Care and Co-ops
    13. 13. Types of Health Care Cooperatives <ul><li>Consumer Owned </li></ul><ul><li>Worker Owned </li></ul><ul><li>Purchasing by Small Businesses </li></ul>
    14. 14. The Current Health Care Bill
    15. 15. Small Business Administration Developments <ul><li>H.R. 3854 Small Business Credit Expansion Act 2009 </li></ul><ul><li>Passed the House ensures all co-ops not organized as tax-exempt may obtain SBA financing </li></ul>
    16. 16. Rural Cooperative Development Grants <ul><li>$11.4 million in total funding </li></ul><ul><li>Includes $300,000 for continued research on economic impact of all cooperatives </li></ul>
    17. 17. The National Co-op Directory <ul><li>NCBA working with several partners to create an on-line directory of all 29,000 cooperatives that you will be able to search by zip code </li></ul>
    18. 18. EQUITY FUND FOR COOPERATIVES <ul><li>GOALS: </li></ul><ul><ul><li>To create an investment vehicle that will allow individuals organizations to invest in a fund that will invest exclusively in cooperatives including credit unions </li></ul></ul><ul><ul><li>Pay investors a market or near market return </li></ul></ul>
    19. 19. CREATE ACCESS TO CAPITAL Outside Private Capital Cooperatives— and other businesses— that Receive At Risk Capital Public Financing Cooperative Capital Cooperative Capital Fund (CCF)
    20. 20. Cooperative Ownership of Fund Example with CDF-issued Co-op Investment Note Fund Manager Origination Monitoring Servicing Senior Debt $2.5 MM Junior Debt $2.5 MM Equity $1.0 MM Worker Co-op (ex: 7% senior) Purchasing Co-op (ex: 10% sub-debt) Consumer Co-op (ex: 8% preferred equity) Producer Co-op (ex: 11% member equity) National Cooperative Equity Fund, LLC (NCEF) $6.0 MM Total Cooperative Dev. Foundation (CDF) Lends to NCEF <ul><li>Retail Investors </li></ul><ul><li>Credit Unions sell charitable CDs </li></ul><ul><li>CU members buy charitable CDs </li></ul><ul><li>CUNA Mutual sells CDF notes </li></ul><ul><li>CU member buy CDF notes </li></ul><ul><li>Proceeds go to CDF </li></ul>Investors Debt Equity / Ownership CO-OP 1 < 25% CO-OP 2 < 25% CO-OP 3 < 25% CO-OP 4 < 25% … Total 100% $1 MM Institutional Investors (Foundations, Banks, etc.) Lend to NCEF Sample Investments $2.5MM 2% 5yrs $2.5MM 3% 5yrs $2.5MM 5% 5yrs $1.0MM Equity Fund Management Fees
    21. 21. Working with Your Public Officials <ul><li>Invite Candidates/Legislators to: </li></ul><ul><ul><li>Annual Meeting </li></ul></ul><ul><ul><li>Tour Your Co-op </li></ul></ul><ul><ul><li>State Co-op Summit </li></ul></ul><ul><ul><li>Programs on the critical issues relevant to Hoosiers </li></ul></ul>
    22. 22. THANK YOU Adam Schwartz [email_address]
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