Who can sponsor a Cooperative Community Fund?
At this time any food cooperative of any size within the USA can become a sponsor of a Cooperative Community Fund.
By year end 2005 we will have eighteensponsor food co-ops from nine different states (Arizona, California, Indiana, Minnesota,
Nebraska, New Hampshire, North Carolina, Vermont and Wisconsin).
What is the dollar amount in the present CCF endowment?
By FYE end 2005 there will be over $500,000 in the combined endowment of the eleven co-ops. The combined fund grew almost $100,000
over the year before. Thecombined endowment is expected to continue growing by about $100,000 a year.
What are the advantages of doing this as an endowment?
There are many ways to give and the recipient obtaining funds is always grateful for whatever they get.
An endowment fund is only one option among many. However,relative to the rest, an endowment fund long term is the
most member driven, economically advantageous, tax beneficial and permanently sustainable. Because yourCooperative
Community Fund is held with the Twin Pines Cooperative Foundation a donation by a member is tax deductible to them.
A donation by the member to your co-op is not tax deductible. Therefore, your members will find this option of higher
economic advantage than giving to the co-op. Your CCF can grow tax free year after year as anendowment whereas donations
your co-op makes year after year come out of annual earnings. At a point in time a co-op could begin making all of its community
donationsfrom its endowment fund and no longer have to make contributions from net earnings. In difficult years for the co-op, donations
would not need to be reduced as they would comefrom a stable source of earnings from the endowment. The endowment is protected from the ups
and downs of the co-op's business and profitability. As co-ops go through variousgrowth phases such as expansion or moving to another
location there is a tendency to say we need to cut back on our donations for next year because we need all of our earnings topay for
the new store or the remodel. By building an endowment over time within a taxexempt non-profit your co-op builds an annual cash capacity
tax-free. In the long run theendowment fund is a more reliable and constant source for community giving.
What are the disadvantages of doing an endowment fund?
Every dollar available to be donated to the community can go to that purpose if you are not building an endowment fund.
In that case, there is little need to plan how toincrease your giving as it relates more to your co-op's bottom line. For an endowment
fund to be successful it does require planning and purpose. An endowment fund doesrequire that you put resources aside to achieve your long term objectives.
Could two or more food co-ops in the same area or region sponsor a Cooperative Community Fund together?
In a number of areas in the country that type of cooperating would make a lot ofsense. Some cooperatives in the Twin Cities Vermont and
in Portland are looking at that model. An area or regional approach may allow for the logo and name to be made moreprevalent.
In some areas there is broader support for regional approaches from the membership. People's Food Co-op in Wisconsin named their fund
the Coulee RegionalCooperative Loan Fund to reflect their commitment to their region. Their intent is to also attract the
support of other cooperatives in the region.
Could some one other than a food co-op be a co-sponsor of a CooperativeCommunity Fund?
While we wish a food co-op to be the main sponsor of a CooperativeCommunity Fund there may be good reasons for many co-ops to allow other
co-op organizations to be named as co-sponsor of your Cooperative Community Fund. Perhapsyour food co-op has a strong link to a local
credit union, or be in the same town as a farmer co-op or electric co-op. How great if they wished to co-sponsor your CCF, co-sponsor CCF
fundraising events, make annual contributions to it and mention the CCF in their newsletters. There is always strength in numbers and
sharing a fund with othercooperatives in your area makes a lot of sense.
Do members respond to the idea of a Cooperative Community Fund?
Yes they do but only if you educate them about the CCF program. Of all the CCF sponsors, the Hanover Co-op has done the
best in educating the members about theHanover Cooperative Community Fund, what its goals are and what it intends to do.
As a result, there is growing member awareness of the program. For example, the Hanover Co-op encouraged its members to
donate their patronage refund checks to the HCCF. In 2002, over 300 members donated $8,000, in 2003, 455 members donated
$10,749 and in2004 over 600 members donated over $15,000 in patronage refund checks to their HCCF. Each year, more and more
people become aware of the fund and each more people give
their patronage to the fund. The increased response is based upon the co-op's successful effort's to constantly educate members.
Do co-ops in other countries do anything similar?
Many cooperatives around the world make a strong contribution to their community. "Concern for Community" is in our
Cooperative Principles and in our blood.Thousands of members, employees and vendors aligned with the Cooperative Group
in Britain contributed $4 million dollars to their Cooperative Community Fund during 2002.A recent study of British
corporations found that cooperatives far outperformed their competitors when it came to community giving. United
Co-operatives has beenrecognized as one of the biggest givers to the community. According to a Business in the Community survey,
the Rochdale-based society donated 6.7 per cent (£2.4 million) of itspre-tax profits to good causes during 2003/4.
In contrast the two largest supermarket chains in Britain, Tesco (£17.2 million), Sainsbury's (£6.1 million) all donated
one percent of pre-tax profits. United Co-operatives (serving my own home town of Blackpool) contributes annual profits to a
cooperative endowment fund which now stands at $10million dollars.
What is the best way to have members support a Cooperative Community Fund?
It takes a while to educate your membership about anything your co-op does.However, we believe that creating constant awareness of your
CCF is the foundation for
fostering regular member giving. Running articles and institutional ads in yournewsletter, having handouts at the cash register,
giving annual updates in your annual reports, adding materials to annual meeting mailings, sponsoring various events, donatingmoney
from wine tastings and raffles are some of the ways to raise and maintain awareness among members. Many of these ideas are covered
in the CD TPCF hasdeveloped for the CCF program. I once counted the mention of the North Coast Cooperative Community Fund at least
eight times within North Coast co-op's newsletter.
What is the best way to grow the Cooperative Community Fund?
Having goals and a plan to achieve those goals and being committed to those goals is the most successful way to grow a CCF.
For example, the Hanover Co-opdecided they wanted to build their HCCF to $250,000 by 2007. They decided on the different ways to
achieve that goal in that time period. At the end of 2004 the HanoverCo-op is almost half way to their goal. At the rate they are
growing they are certain to meet their goal. Certainly, every sponsor is growing their CCF in one way or another.However, no co-op
has a plan as explicit and measurable and as successful as Hanover's. In different places throughout this Q&A you will get ideas
on how to grow your ownfund.
How is the Cooperative Community Fun Program staffed?
Twin Pines Cooperative Foundation has agreed to staff the complete non profit activity,
the accounting and reporting, the bank account and co-ordination among thelocal efforts.
TPCF will provide all the receipts required by eligible donations. The Twin Pines Executive Director
will be available to answer questions and guide each ofthe local co-ops in their strategies.
Twin Pines will generate printed materials, regular newsletter stories and leaflet copy to be
modified by the local co-op. None of this work will have to be done by the local co-op. From its own budget,
TPCF is proudly carryingthe costs of a large portion of the CCF program.
Why use Twin Pines Cooperative Foundation rather than do it yourself?
In the long run it will be economically smarter and tax advantageous to run this activity through a tax-exempt non-profit organization rather than through your ownbooks. Using the North Coast Co-op example, if any existing sponsor co-op had started ten years ago and achieved the same results, we would be managing funds for that co-opof over $700,000. That co-op would be making contributions into the local communities of over $20,000 per co-op per year. We could likely have reduced cash and most otherdonations as a percentage of each co-op's business expenses. Every dollar we earn now which we give away we have already paid about 35% tax on. By working through TPCF you provide an attractive mechanism for encouragingmembers to donate to and participate in the program. In the present setting, there is minimal economic value gained by members making donations. If members did donateto local co-op programs that can become part of your income on which you pay approximately 35% tax. This is not an efficient way to structure a donation program. Our members, customers and other contributors are going to be more comfortable givingto a tax exempt non-profit than giving to the co-op. We make donations more attractive when we can give the donor a direct tax benefit. We make it even more effective whenthere is a two to one match gained by a dollar from a member.
What is the cost associated with running a Cooperative Community Fund?
TPCF provides you with a CD of ideas, formats and fund raising programs. You canchoose from among those or develop programs that suit your needs. At the end of TPCF's fiscal year (October 30th) we deduct an administrative fee of one half of one per centfrom all funds below $50,000 and one per cent for those funds above $50,000. That is the only fee charged to your CCF account. The TPCF administrative fee is one of the lowestadministration fees of any nonprofit in the country. We then calculate the earnings of the fund and notify your co-op of the net income gained by the fund during the past fiscalyear. By the beginning of each year you know how much your co-op can donate from your CCF to nonprofits and cooperatives in your community.
How does the matching program work?
About every two years TPCF obtains matching funds from other cooperative organizations. In addition to its own funds TPCF makes
available $5,000 matches toapplicant food cooperatives. In 2005 there will be three matches made available. For 2005 the CCF program
has received $15,000 in donations of three $5,000 matchinggrants from the National Cooperative Bank/NCBDC, the Cooperative Foundation and
from Twin Pines Cooperative Foundation. The Cooperative Foundation matching grant isavailable only to a co-op in the upper Midwest.
These three matches will be made available to three food co-ops throughout the USA.The match provided through TPCF will be deposited in the Cooperative Community Fund of the three food co-ops invited to be sponsors of a CCF. The applicant sponsor co-op will be required to place a matching $5,000 of its own in that same fund. The CCF therefore starts off with $10,000. From then on it is up to your co-op to use variousprograms to grow your CCF. A growing fund can play an important role in raising awareness of your co-op through the successful activities of your CCF.
Where are the Cooperative Community Funds invested?
We co-invest TPCF's own funds and the CCF together. That way we can get the highest return on Jumbo CD's and investments of $100,000 and above. TPCF/CCF iscommitted to using the endowment funds to strengthen cooperative development. At the end of 2004, TPCF/CCF has invested $320,000 in Northcountry CooperativeDevelopment Fund, $200,000 in The Institute for Community Economics Loan Fund and $100,000 in the Cooperative Fund of New England. The TPCF/CCF funds are availablefor developing cooperatives in all 50 states. Other TPCF/CCF funds are invested in NCB Savings, credit unions and local banks with a history of lending to cooperatives. After theNational Cooperative Bank/NCBDC, TPCF/CCF is the largest cooperative investor in cooperative development organizations in the USA. The principal held by TPCF/CCF isall being used to lend to other food and housing cooperatives and land trusts. None of the funds we are invested in have ever lost a dollar of the money loaned to them.
How hard does the money in Cooperative Community Funds work forcooperatives and their communities?
From our perspective we want our cooperative funds to sweat from how hardthey work. Money is the root of all good as long as you
put it in the right place. We consider the Cooperative Community Fund program to be a leader in a number of ways.First, the CCF
program is the largest combined endowment dedicated to the local giving of our partner food co-ops. Secondly, in the spirit of
cooperation among cooperatives weask that wherever possible 25% of the donations go towards building and strengthening the other
smaller co-ops in your community. Third, the policies of TPCF/CCF ensure that a majority of the principal of our endowment funds are
invested in cooperativedevelopment organizations. We invest the cooperative's principal in our cooperative principles.
Does everything have to be done the same way?
While there is often value to following certain programs each co-op, each community is different and has different ways of
approaching their community giving.Therefore, each co-op is given flexibility on how to run the program in their community.
However, we encourage sponsor food co-ops to fit their giving into one of the fourcategories. A number of the foundations and
cooperative organizations we approach have interests in specific areas of activity and it is advantageous to be able to point to our
emphasis on the following four categories. For example, our Cooperative funders in particular are looking for evidence that
other cooperatives in your communities mightreceive funding and that we invest in cooperative development organizations.
||Examples of Donations
Environmental projects/Recycling/Eco-Projects/Alternative Energy
||Health Care/Social Service/Service Groups/Community Events
|Food & Hunger
||Alternative Agriculture/Organic Farming/Food Banks/Hunger
||Co-op organizations/Co-op Development/Co-op Education
Each co-op will choose at what level of activity they wish to have their staff supportdevelopment of the local Cooperative Community Fund. We see much of the work being rote after the set up of the systems. For example if the co-op adopts a change in thepaperwork of the share withdrawal form it then becomes a bookkeeping transaction. If the co-op conducts a Quarterly Community Roundup then that it does that at the cashregister. We have designed the program to build upon existing co-op activities that provide a simple mechanism for the customer/member to make the contribution.
Who else supports the Cooperative Community Fund program?
On behalf of the CCF program TPCF has received grants from a number
of generous sources. The MSI Fund awarded us our first grant to develop
marketingmaterial and our web site www.communityfund.coop.
NCB/NCBDC awarded $10,000 to help us further develop the CCF program
and materials and provided travel funds toparticipate in a number of
conferences. The Blooming Prairie Foundation, the Cooperative Foundation,
Twin Pines Cooperative Foundation and NCB/NCBDC haveprovided matching
funds to encourage food co-ops to join in the program.