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Join us in congratulating the Philadelphia Area Cooperative Alliance! They have received a $25,000 grant from the USDA to study the feasibility of forming a Purchasing Co-op to serve local food co-ops and local producers. Keystone Development Center will be conducting the Feasibility study and assisting with business planning.
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The Keystone Development Center was recently informed that it had received a $200,000 grant from the United States Department of Agriculture’s Rural Cooperative Development Grant Program (RCDG) for the calendar year 2016. The primary objective of the RCDG program is to improve the economic condition of rural areas by assisting individuals or entities in the startup, expansion or operational improvement of rural cooperatives and other business entities. Agriculture Under Secretary Lisa Mensah today awarded 30 grants totaling $5.8 million to help rural cooperatives create jobs and support business expansion. The funds are being provided through the Rural Cooperative Development Grant program, which helps fund non-profit groups, such as rural cooperative development centers and higher education institutions.
"The cooperative business model has been very successful in improving the economies of our rural communities,” Mensah said. "As we celebrate October as National Cooperative Month, we are pleased to bring a spotlight to these worthy groups.”
Development Centers can use RCDG funds for feasibility studies, strategic planning, leadership and operations training, and business plan development. As part of this grant program, recipients are required to contribute matching funds that equal 25 percent of total project costs. USDA is providing grants for 30 projects in 22 states. View the projects awarded. Funding is contingent upon the recipients meeting the terms of their grant agreement.
American culture has established a storied folklore around taxi drivers, but most Americans are not aware of just how difficult a taxi driver's life has become. For example, in Montgomery County, Maryland, most taxi drivers pay around $33,000 a year in various fees - leasing the taxi alone can cost $110 per day. Since these drivers are not protected by labor laws, some taxi company owners net millions of dollars per year while the drivers must work 12-14 hours per day, 6-7 days a week, just to make ends meet.
Into this story of hardship have come a number of new taxi co-ops in cities like Madison WI, New York, Portland OR, Denver, San Diego, Austin, and Alexandria VA. Often organized with the help of labor unions such as Communications Workers of America, most take a shared-services approach for their independent owner-operators, empowering members to bypass the middleman in their vehicle purchases, insurance, dispatch services, branding, marketing, and more.
The AFL-CIO has been assisting taxi drivers in Montgomery County, MD, for a number of years now, helping them form the Montgomery County Driver's Union to reform taxi regulations and provide some relief to the drivers. With the added market pressure from new app-driven ride-sharing services such as Uber and Lyft, this year that process has also hatched a vision for a new taxi co-op. Thus AFL-CIO Beth Levie reached out to KDC staff consultant Jim Johnson for assistance in establishing feasibility and training the drivers in co-operative governance.
The start-up co-op needed the County Council to grant licenses before it can operate, and had strong initial support from some Councilmembers, but getting the majority on board proved to be very tough going. It was then that, in developing a strategic vision for the co-op, its members and allies identified a large, untapped demand in the County for quality taxi service for people with disabilities, and committed to 100% of its cabs being wheelchair-accessible. While Beth Levie rallied the local advocates of people with disabilities, Jim Johnson developed a preliminary feasibility study, and co-op leaders vigorously recruited their fellow drivers to educate Councilmembers.
On July 22nd, as part of broader taxi reform legislation, the Montgomery County Council voted unanimously to allocate 50 licenses to the new co-op. Jim Johnson is now busily assisting the co-op's driver-members in writing bylaws, developing leadership, and raising capital.
The Maryland Broadband Cooperative (MDBC) is leading efforts to build high-speed computer networks in Maryland. Their focus continues to be on under-served communities in rural Maryland. Several communities may ultimately see improved service because of new fiber optic lines that are expected to be built in neighboring areas.
KDC’s work with broadband began about 10 years ago, primarily with the Lower Shore Broadband Cooperative, a cooperative that served a limited geography. MDBC was formed a few years before the Lower Shore group discontinued operations. They worked closely with Lower Shore to offer services to their members. MDBC is a Non-Profit (501C12) charged with offering, through its membership, expanded network services around the state.
It is a member-owned and operated business providing universal access to a fiber optic network. The network is designed to deliver broadband across the rural communities in Maryland. The cooperative fosters economic development and is supported by its’ members who provide “last mile services”. The MDBC received funding to build the infrastructure through the Maryland Rural Broadband Coordination Board. Their mission is to expand the broadband footprint all across Maryland and the Mid-Atlantic Region.
The presence of a fiber optic network in a region or community can be a driver for economic growth and jobs. It is an enabling resource that, if successfully utilized, attracts new employment opportunities and contribute towards improved health care, education and government services.
The MDBC is positioned to work with local communities and other partners to develop the full economic potential of this high-technology network. Through a regional approach, local businesses and government work together to exploit the high-speed network. The cooperative is in partnership with over 90 members with a majority of members offering last mile services to consumers. Last mile services are the final leg of the network ending at the customer’s location.
KDC is excited to announce that a member of our Board of Directors, Russell C. Redding, was recently nominated by Governor Tom Wolf as the 26th Secretary of Agriculture for the Commonwealth of Pennsylvania. Until confirmed, he is serving as Acting Secretary of Agriculture. Russell is the former dean of the School of Agriculture and Environmental Sciences at Delaware Valley College.
While we are sad to see him go, we are thrilled that someone with such a commitment to cooperatives will be serving in our state's top agricultural position. Russell has extensive experience as a public servant, having spent more than 20 years serving Pennsylvania in Harrisburg and Washington D.C. He worked on Capitol Hill as Ag Policy Advisor to U.S. Senator Harris Wofford and served for 16 years in the Pennsylvania Department of Agriculture, serving as secretary from 2009-2011 under Governor Rendell.
Russell is a native of Pennsylvania and grew up on and operated a dairy farm. He has a longtime commitment to cooperatives stemming from his early farm years when he attended youth programs sponsored by cooperatives. While at the PA Department of Agriculture, Russell supported the formation and development of KDC. He is in his second year as a member of the KDC Board of Directors.
KDC is excited to announce that our Board President, Hannah Smith-Brubaker, has been named Deputy Secretary of the Pennsylvania Department of Agriculture. She was born and raised in Pennsylvania with nearly 20 years of non-profit leadership.
We will miss Hannah who was elected President of KDC’s Board in 2014. She lives and works with her family on a diversified organic vegetable and pastured poultry farm -- Village Acres Farm and FoodShed Inc. It is a Pennsylvania Certified Organic farm of 30 acres. Their products include vegetables and pastured livestock farm.
Just one of Hannah’s many accomplishments is working with the Pennsylvania Association for Sustainable Agriculture (PASA) to re-conceptualize the Good Food Neighborhood program to make the connection of the farm-to-consumer relationship and the vital role consumers have in ensuring the future of a safe, responsive, thriving food system. She is a cooperative person through and through, seeing the cooperative business model as a viable, equitable business structure for agricultural partnerships.
The Clean Energy Cooperative is entering an exciting new phase with its official launch of business. In early August 2014, the Co-op began an equity drive with the goal of initiating its first project. Check out their new website at www.cleanenergy.coop. The member/owners of the Clean Energy Co-op have a mission to sustainably develop renewable energy resources for a healthy and just energy future for their community. The Co-op will use local investment and provide a positive return to its members. It is a community investment cooperative, where members of the community pool resources for development of their local economy and infrastructure. They are focused on Wayne and Pike counties of northeastern Pennsylvania but hope to expand as their activities grow.
Renewable energy projects tend to require large up-front capital investments and yet they bring many positive long-term benefits, both financially and in other ways (e.g. less pollution, lower carbon footprint, greater local resiliency and independence) to their communities. The seeds of the Co-op started in July 2013 as a "community solar circle" within the non-profit Sustainable Energy Education and Development Support (SEEDS) of Northeast PA. The initial goal was to demonstrate renewable energy projects at the community scale and to invest in their community to generate a positive 'return' for everyone. Activities soon stretched beyond what SEEDS (as a non-profit) could do and in May 2014, the group became a fully independent, separate legal entity – formed as a cooperative.
Co-op members have adopted the Seven Cooperative Principles as part of their Bylaws. They believe in the one person, one vote model with the community benefits taking priority over profits. The Clean Energy Co-op is using a "slow money" business model, where long-term and modest returns are acceptable because the money circulates locally, is managed by trusted individuals, and the investment provides other (non-financial) benefits back to the investors and their community.
For the Co-op, the initial project is a solar electric generating system – a grouping of solar panels used to generate electricity. It is looking for local organizations who are excited about clean, renewable energy and who have a significant roof or land area. The benefits from obtaining a solar photovoltaic system from the Clean Energy Co-op includes no cash up-front -- it's paid for over 20 years and all (or a portion) of their electricity will be produced on-site.
Jack Barnett, President of Clean Energy Co-op, said, “We are excited about launching the business after over a year of effort. We expect to sign our first host agreement before fall and to then raise money for the project. The installation of the system is planned for early 2015.”
The cooperative model as a vehicle for community investment is relatively new. The most well-known success story is the NorthEast Investment Cooperative (NEIC). It was formed to allow the people of Northeast Minneapolis to pool their resources and collectively buy, rehab, and manage commercial and residential property in the neighborhood. NEIC has nearly 200 member-owners and has raised over $270,000 in member capital. Both individuals and local businesses have joined as members.
KDC has been involved with the Clean Energy group since the beginning. Initially we helped them understand the cooperative model and how it would work. We then provided support in basic organizational development including reviewing policy formation, bylaws, and the business plan. KDC also assisted the group with understanding various legal issues along with the incorporation process.
By: Cathy A. Smith
The Energy Co-op, headquartered in Philadelphia, PA is a mature cooperative with a long history of providing energy services to its members. It is the only independently-owned, local, nonprofit energy supplier in their area. The co-op was built on providing affordable, renewable energy options in Southeastern Pennsylvania.
The Energy Co-op was started by the Weaver's Way Food Co-op in 1979 and has been serving the Philadelphia area for 35 years. It began in the West Mt. Airy neighborhood of Philadelphia where many of the older homes still use oil for heating. The Board of Directors of Weavers Way Food Co-op wanted to lower the price per gallon of heating oil by leveraging the buying power of its membership with area oil dealers. Participation in the oil program grew year after year, eventually resulting in a new organization - The Energy Co-op.
The Co-op gradually expanded its geographic footprint to the four Pennsylvania counties surrounding Philadelphia, and by the late 1990s, The Co-op's Board of Directors decided to extend its energy offerings to include electricity. Shortly thereafter, EcoChoice100 and the Solar Buyback Program were introduced at a time when no other electricity supplier was offering a renewable option.
Most people's electricity comes from one of the many polluting power plants across North America. But the Energy Co-op’s members receive electricity sourced from local and renewable energy providers. Co-op members are consumers who have decided to positively impact Pennsylvania’s economy and environment by purchasing local, renewable energy. Under the EcoChoice 100 program, electricity is sourced from local wind and solar energy providers.
In 2002, The Energy Co-op established the Solar Buyback Program to source solar power from the rooftops in the area. Members receive electricity generated from local rooftops. The program has encouraged new solar generation in Philadelphia and the surrounding counties, repurposed space people already owned and allowed members of the community to support solar even if they were not able to install it on their own roofs.
In the early 2000’s, The Co-op also expanded its mission to include production of biodiesel derived from waste grease. With assistance from USDA, Co-op staff spent many years researching and testing at a small pilot plant facility in Northeast Philadelphia biodiesel derived from trap grease. In 2005, BlackGold Biofuels (formerly known as Philadelphia Fry-O-Diesel) was formed and later in 2007, was spun-off as a separate entity. The Co-op also developed Southeastern Pennsylvania's largest biodiesel distribution business, which has allowed major area fleet vehicles to transition to biodiesel without modification. KDC was a minor partner in the Co-op’s biodiesel development through small grants and technical assistance.
The Energy Co-op currently has three energy product offerings for its members: Electricity, Heating Oil and Biodiesel. Most recently, KDC assisted The Co-op with a strategic marketing study in support of The Co-ops efforts to expand membership.
By: Cathy Smith
We are excited to share that the Doylestown Food Cooperative (DFC) had its Grand Opening on February 8, 2014. This is a community-owned grocery market with a focus on fresh and nutritious locally-produced foods. The DFC is in Phase One as they plan to open a larger store (5,000 ft2 vs. the current 1,400 ft2) with expanded offerings. The Phase One store is a small, full service grocery store, primarily sourcing from local farmers and producers, but offering as full a line of groceries as they can fit in the space. They want to offer customers a place to meet all their shopping needs.
The KDC’s first interactions with DFC were in early 2010 when we did some initial financial projections as the group explored expanding their food buying club. Over the years we also provided information on entity formation, bylaw development, and other organizational questions. There were multiple issues that arose around member vs. non-member business as well as related tax issues. They had to work out how to handle patronage dividends paid to the members derived from sales to non-members, this will be taxable income for the members. Therefore, if products are sold at the same prices to both members and non-members, then the members essentially would be paying more than the non-members, since the cooperative must later pay the income tax bill on the non-member sales, which are not deductible under Subchapter T. For this and other reasons, many food cooperatives charge higher prices to non-members customers, or simply provide a certain percentage discount to members at the register.
DFC is only one of the many food cooperative development efforts KDC currently supports or has supported over the years. Some we helped at the beginning, helping them to understand development steps and the need for a Steering Committee. Others we provided full feasibility studies. Several benefited from our legal webinars and individual advice on incorporation, bylaw development, and other issues. Others have been or are partners in the development of other food cooperatives. Here is a partial list of KDC food cooperative clients and partners, listed alphabetically. Links to some of the websites can be found at www.kdc.coop/clients/client_list/, which is a partial list of KDC clients.
By: Cathy Smith
Weavers Way Cooperative celebrated its 40th birthday in October with a fall membership festival. The co-op began in 1973 as a buying club in a church basement; then opening a store front on Carpenter Lane in Philadelphia. In the store’s first year, five hundred members supported the tiny, unheated space. Gradual growth has led the cooperative to purchase multiple properties as they expanded to serve their community’s needs. A milestone was in 2010 when the co-op opened a second location in Chestnut Hill. The cooperative’s focus remains on healthy, sustainable food produced and distributed under fair food practices.
Today it has 5,000 households representing more than 10,000 people. For more information, check out their website. It includes a slide show and details of the Co-op’s history.
Weavers Way continues to be a leader in the growth of multiple cooperatives in the region both by example and dedicated support. The recent and exciting initiation of a Delaware Valley food cooperative effort is a project of the cooperative.
KDC offers a hearty congratulation for the first 40 years!
By: Peggy Fogarty