Ownership is the fun-damental building block to our cooperative business model, and quite honestly, we couldn’t do it without you. Your staff here at the Co-op often discuss how important active Ownership and equity investment is to cost savings onyour grocery purchases. Ownership is even more powerful than that. Beyond the cost savings Ownership provides, we don’t often discuss just how the Co-op, as a business, benefits from Owners like you.
Investing Equity in Your Ownership
To become an Owner at Willy Street Co-op, we ask you to invest a certain amount of equity based on the type of Ownership you’re signing up for. Becoming an Owner of our cooperative means you are making a shared investment in the Co-op along with currently more than 31,000 other Owners. At Willy Street Co-op, we call this an investment of your Fair Share. In my role as the Owner Records Administrator, I talk to many Owners on a regular basis who see this investment of equity as a fee to shop at the Co-op, much like an annual membership you may see at a warehouse club. The truth is investing equity in your Ownership at the Co-op has a very different function than a membership fee at a warehouse club.
How Your Ownership Protects the Co-op as a Business
Cooperatives, by law, cannot use your equity as profit. Your equity is used for a portion of our capital expenditures, assisting with store operations. Fair Share Equity is your financial contribution to your Co-op, just like any owner of any business. The more Fair Share Equity the Co-op has, the less we need to borrow from others to finance the operations of the Co-op. In a way, the equity that is invested by you, our Owners, can be seen as how we build our good credit as a cooperative business. As a consequence, you could also see your equity investment as your stake and shared risk in whether or not our business succeeds.
Frankly, without our Owners, we wouldn’t have the means to compete as a vibrant cooperative business in Madison. Unlike with conventional businesses, each Willy Street Owner is invested equally and therefore has an equal say in the governance of our Co-op. Your Ownership comes with voting privileges to participate in democratic elections. We rely on the opinions of our Owners to help select a Board to recommend business decisions. We also rely on you, our Owners, to contribute a wealth of knowledge to our committees and forums and steer our Co-op in a direction that will best suit all our needs. It is the responsibility of our Board and Finance Department to manage the Co-op’s equity and profits appropriately so that we can maintain and grow our cooperative to best serve the interests of our Owners.
For your investment in the Co-op, profits are returned to Owners, via patronage refunds when approved by the Board. When co-ops have a profit at the end of a fiscal year, they may distribute the Owners’ share of the surplus back to the Owners proportionate to their purchases, not the size of their investment. Whether or not the board decides to issue profit as a patronage refund, and how large the refund may be, depends on how much profit was earned and what the needs of the cooperative are at the time. Sometimes surplus is needed to improve or maintain our operations for you, our Owners. When the Co-op is able to distribute surplus profits back to our Owners, we are able to take advantage of significant tax savings, which helps us keep more money in our local economy all around. A patronage refund was not allocated for Fiscal Year 2014, which ended in June of 2014.
It is also our Board’s responsibility to return the amount of equity invested back to our Owners who wish to end their Ownership. In other words, as an Owner, you not only receive a cost savings as well as a voice in the business, but your equity investment is also completely refundable once you no longer wish to be an Owner. Now that’s a deal!
To receive an equity refund, Owners do need to make a formal request at our Customer Service desk, or by mail. Equity refund requests head to our Board for approval of its release. You might also ask what happens to unclaimed equity when an Owner simply stops shopping at the Co-op? This is what the Co-op refers to as Owner abandonment.
Every year, the Co-op notifies Owners who haven’t shopped in over three years that action must take place on their Owner accounts in order to remain in good standing. This means an Owner may need to shop or make an equity investment. Abandoned Owners may also choose to close their accounts with the option to either have their equity refunded or donated to our Community Reinvestment Fund. Legally, the Co-op cannot maintain a hold on equity of abandoned Owners without notifying the Owners who run the risk of abandonment. State Statute Chapter 185 dictates the notification process we need to follow. If abandoned Owners choose neither the option of maintaining their accounts nor having their equity refunded or donated, then their equity automatically goes into our Community Reinvestment Fund.
Community Reinvestment Fund
Since 1992, the Co-op has distributed $317,000 of either donated or abandoned equity towards community development and educational projects through our Community Reinvestment Fund. Grants may be awarded to local projects in both Madison and Middleton communities covering one or more of the following topic areas: food justice or access, cooperatives, sustainable agriculture, health or well-being, and social change.
We make sure that abandoned equity goes towards making a difference in the quality of life for our communities by supporting projects and events that are consistent with Willy Street Co-op’s goals. This community giving is based on Cooperative Principle 7— “Concern for 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.” In Fiscal Year 2014, the Community Reinvestment Fund Committee awarded $30,000 to 18 organizations, and the Board has allocated $25,000 to award this Fiscal Year.
Thank You For Being An Active Owner!
We rely on you, our Owners, to help make this Cooperative work. Together we are autonomous. Together we are successful. Together we make our community more vibrant. Ownership at Willy Street Co-op, even if it’s only making equity investments, is no small thing. In fact, it is everything. So a big thank you to you, an Owner of this Co-op, for your investment, participation, and your encouragement to push this business to become a place of community!