Building Sustainable Earth Community

 This information is from a Food Coop Development seminar I am taking part in.

– Provide the co-op with an adequate capital base

– Create a sense of ownership among members

All types of capital have advantages and disadvantages

– Not taxable to co-op

– Can be low cost and/or interest free

– Provides a base to leverage debt capital

– Many people provide relatively small amounts that add up to a sizable

base of funds

– Demonstrates member support

Member share investment:

– Should contribute to an adequate capital base

– Be flexible as needs of business change (never use the term “life time”)

– Structured to ensure exemption from securities laws and from taxation

– Equitable with the same investment for each membership (whether it is held by an

individual or a household)

– Use payment plans to accommodate different financial situations

– Is refundable to members (refund policies should include restrictions that protect the

solvency of the co-op)

The member investment program should:

– Be simple and easy to administer and maintain

– Be fair and discourage cheating

– Minimize any administrative fees

– Only be changed with member understanding and support

As an investment, member equity is refundable to the member

– Establish some limits on refunds to protect the co-op’s financial base.