by Kirsten Moore, Cooperative Services Manager
From August 16-29, the Co-op will be encouraging new and returning customers to become Co-op Owners and also asking all current Owners making equity payments to consider paying their equity in full at the registers. Owner equity is a major part of participating in a cooperative’s economics and keeping cooperatives viable and thriving businesses. During the Equity Drive, the Co-op will waive the $2 administrative fees on all Owner equity payments for new and existing Owners. All Owners paid-in-full (regardless of whether they became paid-in-full during the equity drive or previously) will be automatically entered to win a six-month coupon booklet to shop our wellness products ($10 off wellness every month for six months); others can request a form at the Customer Service desk to enter. Already paid-in-full or unable to make an equity payment right now? Consider referring a friend or family member to become an Owner during the Equity Drive. We’ll give you a $25 gift card when a new Owner names you as the referral. You can also purchase gift Ownerships at the Customer Service desk at any location, or purchase one online, a great gift for people you know moving to the area or coming back to work or school in town.
Your Economic Participation is Vital to Our Services
Credit unions have a motto “not for profit, not for charity, but for service.” This motto summarizes the kind of business cooperatives are: while we are neither a charitable organization nor one that exists for profit in and of itself, we do exist to provide the services of which Owners benefit. Our ability to provide and improve grocery services is largely dependent on our ability to remain economically sustainable. Cooperative Principle 3: “Owner Economic Participation” puts the Owners front and center in a cooperative’s profitability and financial future. You control the Co-op’s capital and our ability to provide the services the Owners collectively need by purchasing equity, keeping up on equity payments when you choose a payment plan, and then by keeping your Ownership active by using our services (a.k.a. shopping).
What is Owner Equity?
Those annual or one-time payments we ask you to make to the Co-op as Owners are not simply membership fees that pad the cooperative’s bottom line to use as it pleases for eternity; they are your property. You invest your equity payment in the Co-op as a means of supporting what the cooperative does for you and your community, and we retain it in your name. If the cooperative’s services are no longer able to support your needs for whatever reason, the cooperative cannot simply keep your equity, you have an opportunity to have your equity returned to you or donated to charitable causes.
All of the Co-op’s assets are paid for by either debt or equity. Equity is a combination of the cooperative’s profits and your Owner equity investment. Collectively, your equity alongside the equity of your fellow cooperators, strengthens the Co-op’s overall financial equity. A strong cooperative investment in equity allows us to maintain ample cash on hand to pay for the labor, goods, and services that are needed to keep the cooperative operating, and to finance more of our major expenditures internally instead of borrowing from others.
What is Owner Activity?
Our bylaws define active Ownership as being up to date on your Owner equity and shopping at least once a year. So when we say we have over 30,000 active Owners, what we mean is that over 30,000 of our Owners are up to date on their Owner equity and that they are shopping at least once a year. When an Ownership lapses into inactivity, meaning that the Owner stopped making their equity payments annually before they were invested in full, or they stopped shopping once a year, it means that the Owner is no longer economically participating, and no longer using services that they were cooperating to receive. By Wisconsin law, when an Owner stops actively participating in a cooperative’s economics, or stops using the cooperative’s services for three years, the Owner’s equity is considered abandoned property, which cooperatives then must take off of their books and repurpose for charitable endeavors if it remains unused or unclaimed. Owner activity keeps the Co-op’s equity strong in two ways: by allowing us to keep your Owner equity investment on the books, and by supporting the cooperative’s ability to remain profitable enough to support the services we are here to provide.
COVID-19 Impacts on Owner Activity
During the COVID-19 public health emergency in Dane County, Owner activity fell 14 percent overall. At the end of March 2020, 35,748 Owners were active in the Co-op and by the end of March 2021 Owner activity bottomed-out at 30,740 before activity began to increase again. A 14 percent decrease in Owner activity during the height of the pandemic locally is not surprising; on average 10-15 percent of our Ownership lives outside of Dane County. Owners who did not live close to the Co-op over the course of the public health emergency were not coming to the area to shop. Deciding not to travel to shop was, of course, the sensible and responsible choice to make for our families and our community at-large. In fact, public health officials and responsible businesses throughout the area strongly recommended staying home and keeping indoor activity in public spaces low. While this was certainly the right thing to do, the decrease in Owner activity definitely impacted the Co-op’s financial equity, and put more Owner equity specifically at risk of going off of the Co-op’s books. A true story about how valuable and vital it is to exercise Cooperative Principle 3 whenever we are able to do so.
Owner Activity On the Rise
Not all the news about the Co-op’s equity is bleak, in fact, the news is only getting better. At the beginning of April 2021 Co-op Owner activity began to grow again, and it has been growing little-by-little, week-by-week, every week since. While Owner activity is not growing quite as quickly as it fell, current growth in Owner activity forecasts that we may reach pre-pandemic activity levels again by the end of this fiscal year in June. We are loving seeing our Owners from afar return for the services we provide after they had to stay away so long, and we appreciate the economic support that will keep our services here for all of you in the long run.
We Rely on Our Owners
How important is Owner activity? Pretty important! In fact, 90% of purchases at the Co-op are by Owners, you are the majority of our customers using our services. We are completely dependent on your Ownership, your support, and your decision to make your purchases with us. We need you, and all of our Owners, to continue this trend towards greater Owner activity and participation in the economics of the Co-op so that we can continue to recover from the activity lost during the pandemic and develop a more sustainable future together.
You Own It; Go All In!
We’re a cooperative and we are in this together. There are many ways you can increase the Co-op’s financial equity, and we encourage you to participate in promoting Owner equity during our late August Equity Drive. Celebrate your support for local business with your Owner equity investment paid in full. Consider paying off your equity investment this August or making an extra equity payment if that is what you can afford while the administrative fees are waived. Regardless of whether your equity is in the process of being paid or is already paid-in-full, encourage others to become Co-op Owners to support and enjoy the services, promotions, and benefits your local, community-owned grocery provides. If you haven’t shopped with us for awhile, and you plan to be back in the area, stop by and keep your Ownership active by taking us up on the great foods and products we offer. Both your Owner equity and your shopping with us keeps your cooperative viable. Those two commitments from you allow us to continue to be a cornerstone of the community, and continue to offer you and your friends and family grocery services for years to come. Show your co-op loyalty and share in our widespread support of the Madison community and beyond. Many Owners are already fully invested and staying active and we appreciate both your equitable support and your continued commitment to shopping with us. Thank you!
What is a Co-op?
A cooperative (or co-op) is a business operated and democratically controlled by its membership of Owners to meet their common needs and aspirations.
Co-ops are guided by the following seven principles:
- Voluntary, open membership: open to all without gender, social, racial, political or religious discrimination. You may shop, you may join, and you may leave the co-op at any time.
- Democratic member control: one Owner, one vote. Your voice will be heard.
- Owner economic participation: Owners contribute equitably to, and democratically control, the capital of the cooperative. The economic benefits of cooperative operation are returned to the Owners, reinvested in the co-op, or used to provide Owner services. You control the capital.
- Autonomy and independence: cooperatives are autonomous, self-help organizations controlled by their Owners. Together, you are autonomous.
- Education, training and information: cooperatives provide education and training for Owners so they can contribute effectively to the development of their cooperatives. They inform the general public about the nature and benefits of cooperation. You can develop yourself into the consumer you want to be.
- Cooperation among cooperatives: cooperatives serve their Owners most effectively and strengthen the cooperative movement by working together through local, regional, national and international structures. You are more successful when you cooperate with others who know how to cooperate.
- Concern for the community: while focusing on Owner needs, cooperatives work for the sustainable development of their communities through policies accepted by their Owners. You can do something for the community even as you keep succeeding.