Multi-stakeholder Cooperatives

Multi-stakeholder cooperatives present a departure in ownership structure from the more familiar consumer-owned and worker-owned co-ops. Also known as solidarity co-ops, hybrid co-ops or social co-ops, multi-stakeholder cooperatives welcome a variety of groups to become owners, including employees, producers, customers and clients, and community members (including investors). These co-ops may appear to operate similarly to corporations, but as Shareable’s David Boiler points out, while they have “a keen focus on profit and loss, social co-ops are committed to meeting social goals such as healthcare, eldercare, social services, and workforce integration for former prisoners. They are able to blend market activity with social services provisioning and democratic participation, all in one swoop.”[1] Multi-stakeholder cooperatives meet both economic and social goals for sustainable consumption through their commitment to meeting the needs of all their owners.

At first glance, varied stakeholders may appear to have opposing interests. However, these cooperatives approach their businesses with a systems lens, considering how pricing, labor practices, and other decisions impact all stakeholder groups. This is especially effective since most co-op owners belong to more than one stakeholder group. This cooperative form has a proven track record of long-term stability and financial profits. According to Boiler, “social co-ops are providing services for nearly five million people in Italy. They bring in and spend nine billion euros annually. Their survival rate after five years is 89 percent.”

Examples exist throughout North America, with Quebec serving as a hub for the cooperative movement. In Canada, multi-stakeholder co-ops have formed primarily, although not exclusively, to serve social needs such as healthcare [2] and other social services, while in the United States they are a popular form of business ownership in the sustainable food systems movement. [3] The Weaver Street Market is an oft-cited example of a thriving multi-stakeholder cooperative, offering ownership to consumers, workers and producers. Mondragon, one of Europe’s largest retailers of food and consumer goods, is a multi-stakeholder cooperative as well. In Canada, The Dominion Media Solidarity Co-op provides a news outlet that is democratically governed by writers, editors and readers.

Value Proposition for Sustainable Consumption

Rather than directing profits inequitably to executives and shareholders, proceeds are directed to multiple classes of owners. The multi-stakeholder model helps create a higher level of economic equity within companies and higher-value jobs within communities, and ensures equitable product pricing, transparency in governance, and decision-making that reflects cooperative-owners’ values. While multi-stakeholder cooperatives don’t necessarily lead to reduced greenhouse gases or environmental impacts, co-op owners can establish sustainability, environment and climate as guiding values.

Potential City Roles

• Promote—Celebrate and profile local cooperative businesses.
• Inventory—Assess need for locally-provisioned goods and services throughout the community.
• Fund—Provide grants and revolving loan funds for cooperative start-ups.
• Support—Provide technical assistance to cooperative startups for business planning and succession planning for business owners who may be interested in passing their business on to employees after retirement. Provide reduced-rate rent or real estate to cooperative companies.
• Make policy adjustments—Consider adjustments to business and building permitting that could ease building requirements for cooperative businesses.
• Convene—Bring together potential cooperative stakeholders, such as producers and small business owners. Assemble potential non-profit anchor institutions to support multi-stakeholder co-ops, such as academic institutions and hospitals.
• Demonstrate—Prioritize purchasing goods and services from multi-stakeholder co-ops.
• Advocate—Lobby for cooperative funding and supportive policy changes at higher levels of government that allow multi-stakeholder cooperatives to form.
• Partner—Work with multi-stakeholder co-ops to provide or contract out healthcare or social services that fall within local government’s scope of services.

Implementation Challenges and Potential Solutions

The following challenges and potential solutions identified in the Center for Community Change’s 2012 Report, Understanding Worker-Owned Cooperatives: A Strategic Guide for Community Organizers, are also applicable to multi-stakeholder cooperatives:

• Start-up financing—Potential Solution: Anchor institutions partner to provide start-up financing.
• Accessing expertise in local economics, service delivery, customer service and business management—Potential Solution: City government, local economic development non-profits, and educational institutions provide technical assistance through ongoing partnerships.
• Growth—Instead of focusing on growing organizations, focus on establishment of new cooperatives in service sectors that can replace production (e.g. laundry services instead of linen production, taxi cooperatives replacing car production.)

Further Resources

• Kent State University Cooperative Development Center: Solidarity as a Business Model: A Multi-stakeholder Cooperatives Manual
• Shareable: The Great Promise of Multi-stakeholder Cooperatives
• Philadelphia Area Cooperative Alliance: Local Government Support for Cooperatives
• Multi-stakeholder Cooperatives on Cultivate.coop
• The National Center for Employee Ownership: Hybrid Cooperatives: Challenges and Advantages
• Nina K. Dastur: Understanding Worker-Owned Cooperatives: A Strategic Guide for Community Organizers 
• Maurie Cohen: The Future of Consumer Society (Chapter 6)

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