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