While here in Bologna, I’m thinking about those systemic advances we can make to accelerate the adoption of the co-operative model in BC. Many things we see here have grown up in this area and are inseparable from the local culture and economic ecosystem. Many of the aspects of the co-operative support system are hard to imagine being replicated back home. But there are definitely some things we’re seeing here that could be imported to support growth of coops in BC. Like I wrote in my previous post, a stronger coop sector in BC would be an important complement to the capitalist system and create greater equity and sustainability, augmenting governmental interventions.

We spent Wednesday morning visiting CoopFund, an economic support to startup coops and coops wanting to grow and develop. In Italy, all coops put 3% of net profits into a fund whose primary objective is to support new coops and expand the activities of existing coops. Their focus is on technological innovation, increasing employment opportunities, expanding into Southern Italy where there aren’t as many coops and expanding coop social enterprises into sectors such as health and integrating people with barriers to employment into the workforce.

When a coop is facing major challenges or insolvency, the fund is one of the refinancing agents along with local credit union equivalents and the coop apex organizations such as LegaCoop. The CoopFund also offers consulting services to the coop to help them through a difficult period.

I found it very interesting that the interest rate off the loans CoopFund makes can be variable based on terms and risk similar to commercial lending at home, but is also affected by the social outcomes the coop is delivering. If a social outcome of the coop creates employment, especially in barriered communities, the rate will be lower as it provides a general benefit to society. At traditional banks, social objectives don’t factor in at all – in fact those objectives can be perceived as distracting from the main economic objectives of the borrower and may lead to a higher risk profile and therefore higher rates. Here in Bologna the more the loan can be linked to social outcomes, the lower the rate. Rate is driven by alignment to values rather than solely to risk, as all loans have to meet a standard risk profile as a stage of application to the fund.

We do have a national coop fund now, finally. And the idea of the government requiring coops to create a national fund based on a percentage of net profits isn’t realistic or warranted. If a few key players came together to capitalize a fund, organizations like the Credit Union Foundation of BC, Vancity, MEC and others, working in concert with a provincial body governing economic and/or social development to ensure aligned outcomes, we could advance the creation of more coops.

As we see the trend towards solopreneurs and away from traditional employment options, the growth of worker coops kickstarted by a fund like this could create more opportunities for people to earn a higher standard of living for their work, have a greater sense of ownership and more collaborative workplaces and create more opportunities to those facing barriers. Such progress would be a win-win for employees, the government and the coop sector.

CoopFund specifically focused on Worker Buy Outs – having small businesses who have run into problems or have owners who want to sell their businesses sell to the workers who own the new business as a co-operative. I’ll post more on worker coops succession at another time.