2012 upstate cooperatives summit

This event was held at the Syracuse South Side Innovation center. The center is sponsored by Syracuse University. They did a good job restoring the former warehouse into a nice looking business center. It's clearly a resource that has a need to balance community wants with the need for security and safety. To this end, they offer a card access system to members that allows access using an automated badge system. Here, a few of us can be seen gathering at the side entrance to be let in.

Inside, I found some glass enclosed cubical areas. The furniture, computers and carpeting seem reasonably new. The main part of the center appears to be a large main lecture hall surrounded by several business incubator offices. This large room and a smaller conference room were where the talks were held. There were other offices that I presume had shared resources that the tenants could use.

I was impressed that the hosts were able to offer low cost tickets (or no cost for unemployed people such as myself) and still put on a good show. After a short check-in period, the talks started. They were all interesting. Like so many events of this nature, I really wanted to be in two places at once!

There were several messages that I got from the event. Co-ops come in many forms.

• Worker Co-Ops, (can be for profit or not)
• Membership non-profit
• General catch-all
• Agricultural co-ops

Here's some other quick trivia. Co-ops are more popular in times of economic distress. Co-ops (including banks) do over two trillion dollars a year in business. Co-ops need at least 5 members. Owners are "members", each having one share and one vote. They have the same personal asset protection benefits of a corporation. The Bylaws define how the co-op operates and also specifies how it disbands should the members desire that. Dividends are legally limited to 12% of capital. Co-ops tend to have a better success rate than other business structures. A new development is that co-ops can now issue non-voting "preferred" stock for investors. I didn't catch the jurisdiction of this. So, it may be state based laws that govern this rather than national. When forming a co-op, it's wise to deal with lawyers and accountants that specializes in them.

While there was much more covered in the talks, here is my highly biased opinion of co-ops. In my opinion, a co-op member is essentially "buying" their job. The buy-in amount is typically quite large. However, members sometimes "buy their share" over time through salary deduction. This of course creates a large incentive for co-op members to succeed and reduces employee turnover. However, it also requires a great deal of trust since such a situation can lead to self-exploitation of co-op members.

Second, unlike corporations, co-ops are not legally required to make shareholder profit be a primary goal. Instead, they can choose to measure success in other ways. Since the co-op isn't a slave to maximizing short term profits, this is potentially a very powerful business structure!

Third, co-ops still need to provide a good "Value Proposition" to all involved parties. Just like any business, they need to succeed in terms of offering better prices, better quality or better variety. Working with "anchor institutions" such as universities seems to be a niche strategy that co-ops are uniquely able to do. Non-profits sometimes have "goals" that can be more easily achieved via a co-op rather than through a conventional profit oriented business. For example, minimizing CO2 in some operations may be a technique that conventional business cannot do since it would not be as profitable to the shareholders.

During the Q&A session, I asked if it was beneficial to start as another business structure then convert to a co-op. I then asked several other people about this. The consensus was, If a co-op is what is desired, then it should start that way. The one exception to this would be for an existing business to be bought by the employees while offering a fair deal to the former owners.

Other points I picked up was a review of how the federal government makes laws. This was during the discussion of the proposed law HR3367 which would provide funding for assisting the formation of new co-ops in urban areas. I had forgotten how much a law could be changed by going through various committees in both Congress and the Senate! Reviewing the lobbying process, I'm surprised any law survives even remotely in it's original form.

Finally, at the end, the "Dream Freedom Revival" performed for the group. They also involved the audience (I even got up on stage myself). It was performance art at it's best. Very motivational! The food was good too. It was served on reusable plates, was disposed of organically and dishes were cleaned with the help of the guests. Overall, the whole event was very well run.

The talks covered can be seen at http://cny.coop/schedule
There is an active discussion group at http://lanyrd.com/2012/cnycoop/
They also have a Facebook page
There is a directory in case you want to find a coop in NY state.
The main site is at http://www.cny.coop/