Background
A standard
definition of cooperatives in the U.S., a user-owned, user-controlled business
that distributes benefits based on use, combines the model’s three fundamental
principles: user-ownership, user-control, and the distribution of net income
based on patronage rather than investment (Zeuli and Cropp 2004). A coop’s user
is a person that supplies its raw product (e.g., grain for processing) or
purchases its goods and services. The “user-owner” principle implies that the
people who use the co-op help finance the co-op in return for ownership shares.
Cooperative patrons (or users) become members by investing equity (either
up-front or over time) in the cooperative. Members generally contribute thirty
to fifty percent of the capital required to finance the enterprise.4 The
collective investment of equity creates joint ownership of the business.
Cooperatives may receive grants and loans (debt capital) from lending
institutions (there are banks that specialize in providing cooperative credit)
but there are limitations on receiving equity capital from individuals or
organizations that will not patronize the cooperative. Cooperatives may obtain
equity from non-members, but the investors may not be granted any voting rights
and their returns from the investment are limited by state cooperative statutes
(in most states dividends may not exceed eight percent annually).
Self-help
community development The self-help model places community members at the core
of a development process with two goals: to improve the quality of life within
the community and to increase the community’s internal capacity to create
further change by institutionalizing the community development process.
A community’s
assets include the human, social, physical, financial, and environmental, or
taken together what Green and Haines (2002) call “community capital.” By virtue
of being locally developed, locally owned and locally controlled, cooperatives
clearly build on a community’s human capital, social capital, and financial
capital.
The cooperative
contribution to human capital development (education, skills, and experience)
may be its most substantial community development impact. According to
Richardson (2000), the value of leadership training cannot be overestimated:
“If I were pressed to select only one from a list of the ten most important
components needed for sustainable rural community development, it would have to
be leadership training”
The willingness
of people to cooperate and trust is a fundamental building block in a
cooperative development strategy. Communities with established networks and
relationships (civic communities) build trust and make organizing efforts
easier.
Concept and objectives for Kinsale Co-operative Society (KCS)
- A NFP trust with members who are residing in
or have a strong interest in Kinsale.
- A ‘self-development co-operative’ which
promotes community
residents to use local financial resources to create businesses/services and
assets that are locally owned and controlled.
- A tightly defined list of objectives which are
administered by the (elected) trustees and potentially an executive:
- Acquisition of assets (eg buildings or land)
and business entities for the benefit of the Kinsale community. This should be
limited to acquiring a controlling interest, and each entity should be in
principle self-financing in due course.
- Provision of services for the community
(incremental to existing services, not substitutional) which augment the status
and quality of Kinsale (eg Kinsale Wifi) – this could include tourism services
making Kinsale a better attraction, town management services to improve the
living environment for residents or educational services to supplement existing
state-run education.
- Education in specific skills – eg managing
small businesses in the town – potentially through the provision of
multi-business supports (eg a hub)
- Provide sustainable employment opportunities
for residents of Kinsale, especially those without transferrable skills or the
wish/ability to work elsewhere.
- Investment in small local enterprises and
community-based projects to support sustainable futures. It should be able to
include some element of risk by the KCS
- A robust process of evaluation, monitoring and
review of projects and their achievements will be essential.
Governing
principles
The principles governing KCS would include the ICO guidelines:
- Voluntary and
Open Membership
- Democratic Member
Control
- Member Economic
Participation
- Autonomy and
Independence
- Education,
Training and Information
- 6. Co-operation
among Co-operatives
- 7. Concern for
Community
Finance
Funds in the form of member shares ,some of which are
withdrawable:
- A small unit price for minimum membership –
non-withdrawable but allows access to the Kinsale Membership Card (eg €10-20 per
year). This should be attainable by adults and children/younger members,
residents and those visitors who want to benefit from Kinsale offers during
their stay
- A manageable larger unit with voting rights
and withdrawable at par (eg €100-500 per unit)
- A Larger ‘charitable donation’ share – this
would be in the form of a non-withdrawable donation but could attract benefits
- An investor level (private or corporate) share
– this might include ethical VC, crowd funding and investment by other
co-operatives – the proportion of paid-up capital in this area would be
limited. It might be better to reserve
this investment for specific projects (eg JV acquisition of public spaces)
2 and 4 would perhaps attract dividend payments
2 and 3 would include specific benefits:
- Listings on a consumer-facing website,
brochures etc and participation in promotional events (KCS show etc)
- Membership card which offers benefits to local
spending
- Consulting and marketing support for
businesses which participate
Technical solutions
It is important that a system is built to administer KCS, based on
online financial management. Consider:
- Automated membership payments
- Administration of loans and investments
- Loyalty card points-based reward system
allowing members to use their card in Kinsale businesses to earn points which
can be spent within the community on KCS investments – a virtuous circle
investment.
- Full financial accountability and governance
to benefit from tax breaks etc
- Online voting
Future Kinsale 