Cross Sector Collaboration & The Co-operative Decade, AACUL, 8.1.13

Cross-­‐Sector  Collaboration    &  The  Co-­‐operative  Decade  

American Association of Credit Union Leagues Summer Meeting // Thursday, 1st Aug 2013 // Boston, MA

INTERNATIONAL CO-OPERATIVE ALLIANCE

BLUEPRINT FOR A CO-OPERATIVE DECADEJANUARY 2013

Our  Opportunity  

The 6th Principle of Co-operation

recognizes that co-operatives serve

their members most effectively and

strengthen the co-operative movement

by working together through local, national,

regional and international structures…

Our  Challenge  

…and yet, credit unions and other

co-ops rarely take advantage of opportunities

to work together across sectors to

grow our businesses, benefit our members, and influence

policy makers.

Core  Questions  

1.  Why collaborate across sectors? 2.  What are the challenges and

opportunities for collaboration? 3.  How can we take advantage of the

momentum of the Year of Co-ops and the Co-operative Decade?

4.  Is regional cross sector collaboration an opportunity for Credit Union Leagues?

Outline  

1.  Our Context & Opportunity

2.  A Credit Union’s Perspective

3.  Food Co-ops’ Perspective

4.  Challenges & Opportunities

5.  Small Group Dialog

Our  Context  &  Opportunity  

•  Crisis of our economic system

•  Unemployment & inequality •  Diminished democracy

•  Corporate influence

•  Instability & change

•  Hunger for alternatives   Local, democratic, values based, sustainable, etc.

Co-­‐operative  Principles  

•  Voluntary & Open Membership •  Democratic Member Control •  Member Economic Participation •  Autonomy and Independence •  Education, Training and Information •  Collaboration among Co-operatives •  Concern for Community

Co-­‐operative  Values  

•  Self-Help •  Self-

Responsibility •  Democracy •  Equality •  Equity

•  Solidarity •  Honesty •  Openness •  Social

responsibility •  Caring for others

A  Flexible  Model  

•  Credit Unions •  Food co-ops •  Agricultural & fishery co-ops •  Insurance co-ops •  Industrial & service co-ops •  Energy & utilities •  Housing co-ops •  Artisan co-ops

2012:  International  Year  of  Co-­‐ops  

Co-ops “in their various forms, promote the fullest possible participation in the economic and social development of all people...” United Nations Resolution 64/136 December 2009

A Flexible Model

•  Credit Unions •  Food co-ops •  Agricultural & fishery co-ops •  Insurance co-ops •  Industrial & service co-ops •  Energy & utilities •  Housing co-ops •  Artisan co-ops

Co-­‐ops  Build  a  Better  World  

“Co-operatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility.” UN Secretary-General Ban Ki-moon

International  Year  of  Co-­‐ops  

UN Goals for the Year:

•  Increase public awareness about co-ops.

•  Promote formation and growth of co-ops.

•  Encourage government policies, laws and regulations conducive to the formation, growth

and stability of co-ops.

Co-­‐ops  Are  Successful  

•  Scale

•  Competitive •  Resilient

•  Innovative

•  Relevant

Ontario Co-op Association // ontario.coop

Co-­‐ops  Have  Impact  

•  1 billion co-op members worldwide*

•  100 million employees worldwide** •  29,000 co-ops in the U.S.

•  U.S. co-ops hold $3.1 trillion in assets

•  1 in 3 Americans are members

* More than directly own stock in publicly traded corporations ** More than employed by multinational corporations.

A  Co-­‐operative  Decade?  

“The real opportunity is turning the International Year of Co-operatives into a Co-operative Decade, with the goal of the co-operative being the fastest-growing model of enterprise by 2020.” Charles Gould, Secretary General International Co-operative Alliance www.ica.coop/en/blueprint

INTERNATIONAL CO-OPERATIVE ALLIANCEBLUEPRINT FOR A CO-OPERATIVE DECADEJANUARY 2013

•  Environmental degradation •  Unstable financial sector •  Global governance gap •  Disenfranchised younger generation •  Loss of trust in political & economic

organizations

Global  Challenges…  

INTERNATIONAL CO-OPERATIVE ALLIANCE

BLUEPRINT FOR A CO-OPERATIVE DECADEJANUARY 2013

Co-ops are a Better Business Model

because…

•  Participation through ownership,

•  Economic, social and environmental sustainability,

•  Places people at the heart

of economics.

…Co-­‐operative  Solutions  

INTERNATIONAL CO-OPERATIVE ALLIANCE

BLUEPRINT FOR A CO-OPERATIVE DECADEJANUARY 2013

•  Elevate participation to a new level •  Co-operatives as builders of sustainability •  Build the co-operative message & identity

(positioning) •  Legal frameworks for co-operative growth •  Reliable co-operative capital that also

guarantees member control

Strategy  for  a  Co-­‐operative  Decade  

INTERNATIONAL CO-OPERATIVE ALLIANCE

BLUEPRINT FOR A CO-OPERATIVE DECADEJANUARY 2013

Strategy  for  a  Co-­‐operative  Decade  

Sustainable Business

Legal Framework

Co-op Capital

Member Participation

Co-operative Identity

The UMassFive “Co-op” Brand

A Credit Union Perspective

To Co-op or not to Co-op  UMassFive  has  always  supported  the  co-­‐operative  movement  and  has  positioned    itself  as  a  non-­‐pro9it  9inancial  co-­‐operative  established  to  serve  it’s  member-­‐owners    Over  the  past  15-­‐20  years  the  credit  union  has  actively  tried  to  position  itself  as  such  in  the  marketplace.  

What our members said…

Main Financial Institution (MFI)

  About  65%  of  respondents  have  their  primary  checking  account  at  UMassFive.  

  Among  those  who  do  not  use  UMassFive  MFI,  four  banks  were  identi9ied  by  more  than  5%  as  their  MFI:      Bank  of  America    Florence  Savings  Bank  (FSB)    TD  Bank    Easthampton  Savings  Bank  (ESB)  

Us e  UMas s F ive  as  MF I:

Y es65%

No33%

Don't  know  /  refused

2%

Credit Union vs. Bank

  Overall,  the  9indings  indicate  that  UMassFive  members  feel  having  an  account  at  UMassFive  is  signi%icantly  different  from  having  an  account  at  a  bank.  

  Speci9ically,  75%  of  UMassFive  members  said  it  is  signi9icantly  different,  and  only  17%  said  it  is  not.  

  In  addition,  8%  were  unable  to  answer  the  question.  

   Y es75%

   No17%

   Don't  know8%

Non-profit Financial Cooperative

 Overall,  UMassFive  members  feel  they  have  at  least  some  understanding  of  what  a  non-­pro<it  <inancial  cooperative  is.  Speci9ically,  52%  of  members  feel  they  know  fully  what  this  statement  means,  and  43%  feel  they  know  somewhat  what  it  means.  4%  did  not  understand  the  statement.  

 Overall,  when  provided  with  a  description  of  a  non-­pro<it  <inancial  cooperative,  members  indicate  that  this  has  a  highly  positive  impact  on  their  image  of  UMassFive,  with  82%  saying  it  has  a  very  positive  impact  and  15%  saying  it  has  a  somewhat  positive  impact.  

Don't  unders tand  s tatement

4%

S omewhat  unders tand  s tatement

43%

Fully  unders tand  s tatement

52%

Don't  know0%

Negative0%

No  impact4%

S omewhat  pos itive15%

Very  pos itive82%

Member Owner

 The  majority  of  UMassFive  members  knew  that  by  having  an  account  at  the  credit  union  they  were  owners.  Speci9ically,  63%  of  members  knew  this,  and  37%  did  not.  

 Overall,  members  feel  being  an  owner  has  a  positive  impact  on  their  experience  with  UMassFive,  with  43%  saying  it  has  a  very  positive  impact  and  35%  saying  it  has  a  somewhat  positive  impact.  

Aware  Was  Owner:

No,  was  not  aware37%

Yes ,  was  aware63%

Impac t  of  Owners hip:

Don't  know2%

Negative0%

No  impact19% S omewhat  

pos itive35%

Very  pos itive43%

Member Advocacy

 Most  UMassFive  members  do  perceive  of  staff  as  member  advocates  with  their  best  interests  at  heart.  

 We  then  asked  members  how  valuable  this  is  to  them  as  members.  

 Most  members  feel  that  having  UMassFive  staff  as  member  advocates  is  valuable,  with  67%  saying  it  is  very  valuable  and  most  of  the  remainder  (23%)  saying  it  is  somewhat  valuable.  

S hare  Perception  of  S taff:

Y es71%

No7%

Don't  know22%

How  Valuable  to  Members :

Very  v aluable

67%

S omewhat  v aluable23%

Not  v aluable2%

Don't  know7%

Respondents  read  the  following:  “UMassFive  strives  for  its  staff  to  be  member  advocates,  offering  advice  and  guidance  that  is  in  the  best  interest  of  members  regardless  of  the  impact  it  has  on  the  credit  union.”  We  then  asked  respondents  if  they  share  this  perception  of  UMassFive  staff.  

College  students  are  likely  to  keep  their  accounts  at  UMassFive  after  they  graduate.    

Speci9ically,  57%  said  they  are  very  likely  and  24%  said  they  are  somewhat  likely  to  keep  those  accounts.    

Co-ops make for Good SEG’s  Retail  Deposit  Balance  Average  River  Valley  Co-­‐op  Market:  $21,995  General  Membership:  $14,337      Retail  Loan  Balance  Average  River  Valley  Co-­‐op  Market:  $23,076  General  Membership:  $22,498        

Co-ops make for Good SEG’s  Percent  of  Households  with  Retail  Loans  River  Valley  Co-­‐op  Market:  43.7%  General:  43.1%    Single  Service  River  Valley  Co-­‐op  Market:  9.3%  General:  21.5%  

A  Food  Co-­‐op  Perspective  

A food co-op is a co-operatively owned grocery store, owned and governed by its members.

Food  Co-­‐ops  &  Innovation  

•  Community ownership

•  Healthy foods

•  Organic industry

•  Fair trade

•  Local economies

Food  Co-­‐ops  &  Local  Economies  

•  Democratic ownership & control •  Focus on meeting needs before profit •  Develop local skills & assets •  Ability to assemble limited member resources •  Address challenge of business succession •  Low business failure rate & are long-lived •  Difficult to move or buy-out •  Separate community wealth from markets •  Mobilize member loyalty…

Co-­‐ops  &  Credit  Unions  

Build More stable, participatory, resilient and productive local economies.

Neighboring  Food  Co-­‐op  Association  

“Our vision is of a thriving regional economy, rooted in a healthy, just and sustainable food system and a vibrant community of co-operative enterprise.”

Neighboring  Food  Co-­‐op  Association

•  Regional 2nd Level Co-op (similar to a CU league)

•  35 Co-ops & Start-Ups •  80,000 memberships •  1,500 employees •  $29 million in wages •  $200+ million revenue •  $30 million in local

purchases

http://nfca.coop/members

Co-­‐ops  &  CUs  in  the  Northeast  

New England & New York •  8,860 co-ops •  9.5 million members •  Employ 55,000 people •  $2 billion in wages •  $100 billion in assets •  $14 billion in revenue

http://reic.uwcc.wisc.edu/ http://nfca.coop/co-opeconomy

Cross  Sector  Collaboration  

•  Cross-Sector Collaboration: Promoting Co-operative Difference

•  New England Farmers Union: Food Policy & Co-op Advocacy

•  Producer & Worker Co-ops: Sourcing & Education

•  Valley Co-op Business Association: A Model for Cross Sector Collaboration

Value  Added  

•  Members see themselves as part of something bigger

•  Partners that “get it” •  Peer professional support •  Access to shared resources •  Legitimacy as business model •  Influence policy & advocacy •  Educational institutions

Challenges  &  Opportunities  

•  Education   Limited understanding of history & impact of our movement.

•  Philosophy   Do we have confidence in our model and movement?

•  Expectations   We have high standards for each other.

•  Mainstream business influence   We are encouraged to think like individual businesses.

•  Development models   Focus on isolated businesses, not development of systems.

•  Sector & Industry Silos   We rarely act together as a movement or system.

Co-­‐operative  “Silos”  

Producer Co-ops

Food Co-ops

Credit Unions

Worker Co-ops

Energy & Utilities

OtherCo-ops

Cross Sector Collaboration

•  Vocational school in 1956 •  256 co-ops & subsidiaries •  $20 billion in Sales (‘11) •  84,000 employees (‘11) •  Largest domestic grocery •  Cross sector: Industry,

financial, agriculture, education, tech, etc.

•  Integrated credit union

Mondragón,  Spain  

•  4 million people •  8,000 co-ops •  30-40% of GDP •  2/3 are members of co-ops •  Vibrant local traditions and

food culture •  Strong sectors combined with

an integrated, cross sector movement

•  Integrated credit unions

Emilia  Romagna,  Italy  

Shared  Characteristics  

•  Strong co-operative identity   Co-ops & credit unions as community assets

•  Development guided by co-ops   Emphasis on co-op to co-op business

•  Integrated Financial Sector   Capital for growth and development

•  Regional cross-sector associations   Supported by sector based organizations

Bridging  Sector  Divides  

•  Shared history •  Common values & principles •  Basic business model •  Collective economic impact •  Cross sector business •  New models for collaboration •  A common message

A  Common  Message  

Co-ops & Credit Unions… •  …put people before profit, •  …are democratic, •  …are rooted in community, •  …are innovative, •  …are successful, •  …are resilient, and •  …build a better world.

Toward  the  Decade  of  Co-­‐ops  

•  Seeing the co-op landscape   Opening the dialog with other sectors

•  Focus on shared identity & impact   Values, principles, history, structure, impact

•  Start with those that “get it”…   …and others will follow

•  Immediate opportunities for collaboration   Educate members, marketing, engage policy makers

•  Collaboration as economic driver   Innovation, business development, growth

Why  Bother?  

•  Access markets & committed members •  Share capital & resources •  Raise the profile of co-ops & credit unions •  Influence policies and legislation

affecting co-ops & credit unions •  Engage educational institutions •  Grow our co-ops & credit unions

Some  Questions  for  You  

•  Do you buy it? Does cross sector collaboration benefit credit unions and their members? Why or why not?

Some  Questions  for  You  

•  Strategically, what is the most compelling opportunity for cross sector collaboration?

Some  Questions  for  You  

•  How can credit union leagues take a leadership role in cross sector collaboration and add value for their members?

Contact  

Erbin Crowell Neighboring Food Co-op Association

erbin@nfca.coop www.nfca.coop/iyc

Jon Reske

UMASSFive College Federal Credit Union jreske@umassfive.org

www.umassfive.org