This Way Out: a Guide to Starting a Worker Cooperative

Economic Survey of European Employee Ownership
Worker Cooperative Start Up Guides
KickStarter Funding Platform a funding source
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International Cooperative Alliance
Long Island Home Enterprises
Home Enterprise is a group of individuals who contribute time, money and skills to refurbish below-market valued homes. In the process of updating the homes, members can rent the home at reduced rents. Any hours spent restoring the house can be “banked” to the individual member’s account for future withdrawls, which we will explain shortly. Individuals with cash to invest can convert this contribution to hours at a rate of $20 per hour. A database will keep track of all time logged.
With time and capital invested in this manner, Home Enterprises will pool resources quickly and retain them long enough for them to be utilized with powerful effects.
Home Enterprises membership will be comprised of anyone with any combination of effort, skill or capital to contribute to turn run-down houses into homes. No minimum amount of time, requisite skill, or initial cash investment is required. The only stipulation is that whatever resource is contributed be allowed to stay within Home Enterprises for a minimum of a two year period. To prospective members we say; if you can’t part with it for that long, don’t part with it.

Steelworkers Worker-Ownership Institute
The Worker-Ownership Institute A forum in which management and labor from employee-owned companies, and ESOPs, come together to discuss their triumphs and failures, and to learn from each other. WOI is jointly sponsored by the United Steelworkers of America (USWA) and the management of member companies that are partly or wholly employee-owned and employ members of the AFL-CIO-CLC or other unions.
Kent State: Ohio Employee Ownership Center
Ohio Employee Ownership Center A great resource for tools in helping traditionally organized businesses that are considering becoming employee-owned and/or cooperatively managed. A link for stats on closely held or family business failures due to poor succession planning. Many jobs are being lost by poor planning and this could be an opportunity for unions and business devlopment agencies to work together to create co-ops to preserve jobs.>
AFL-CIO Building Investment Trust
AFL-CIO Building Investment Trust: The AFL-CIO Building Investment Trust is a $3.015 billion pooled real estate fund serving pension plans with union beneficiaries. The mission of the Trust is to provide competitive risk-adjusted returns for its participants through investments nationwide in institutional quality commercial real estate while promoting economic development and creating union jobs for America’s working men and women. Since its founding in 1988, the Trust has participated in nearly $4.3 billion in real estate investment transactions across the United States. The Trust is managed by a bank Trustee, PNC Bank, National Association. The Trust was created in 1988 in furtherance of the AFL-CIO’s desire to meet the growing interest of union pension plans in the rapidly growing commercial real estate market. It has since evolved into a premier real estate investment fund for Taft-Hartley and public sector pension plans – a fund that seeks to deliver highly competitive returns to its participants through prudent investments in high quality assets. These investments also improve the economic vitality of America’s urban centers by supporting good jobs, building much needed housing and commercial development and providing long-term economic growth. Since inception, the Trust has committed nearly $4.3 billion for the development or acquisition of more than 160 office, retail, multifamily, hotel, warehouse and mixed-use properties across the country. As a result of labor policies that serve as a model for the investment industry, the Trust’s investments have generated an estimated 27,000 jobs for members of the building and construction trades unions as well as thousands of permanent union jobs in the service, maintenance and operation of facilities owned by the Trust.
GREEN WORKER COOPERATIVES GREEN WORKER COOPERATIVES is a South Bronx-based organization dedicated to incubating worker-owned and environmentally friendly cooperatives in the South Bronx. Our approach is a response to high unemployment and decades of environmental racism. We don’t have the luxury to wait for new alternatives. That’s why we’re creating them. We believe that in order to address our environmental and economic problems we need new ways to earn a living that don’t require polluting the earth or exploiting human labor. Building an alternative green economy in the South Bronx is not a solo endeavor. Help support our work today by making a donation. All donations are tax-deductible and should be made out to Green Worker, Inc.
The Worker-Ownership Institute -The Worker-Ownership Institute: A forum in which management and labor from employee-owned companies, and ESOPs, come together to discuss their triumphs and failures, and to learn from each other. WOI is jointly sponsored by the United Steelworkers of America (USWA) and the management of member companies that are partly or wholly employee-owned and employ members of the AFL-CIO-CLC or other unions.
US Federation of Worker Cooperatives - The United States Federation of Worker Cooperatives is a national grassroots membership organization of and for worker cooperatives, democratic workplaces, and organizations that support the growth and development of worker cooperatives. We were founded in 2004, the result of several years of organizing on the part of worker cooperatives and regional groups from around the country.

ROC - Restaurant Opportunity Center
ROC - Restaurant Opportunity Center ROC is a project of UNITE/HERE and created a worker cooperative restaurant called COLORS from the workers who were displaced by 911 at the World Trade Center. Now that COLORS is open for business, they are expanding their model to create more restaurants across the nation as worker cooperatives. The Restaurant Opportunities Center of New York (ROC-NY) is dedicated to winning improved conditions for restaurant workers and raising public recognition of restaurant workers’ contributions to the city. Our website is currently under construction. If you have any questions regarding the classes or any of our programs, please call our office: 212-343-1771. Our office is located in the UNITE Here building at 275 7th Ave on the 17th floor between 25th and 26th.
Venuzuela's Co-op Boom
Venuzuela's Co-op Boom

Over 99 percent of Venezuela�s cooperatives have registered since President Hugo Ch�vez Frias took office in 1999. The cooperative boom is key to the shift by the Venezuelan government towards an economy based on the inclusion of traditionally excluded sectors of society and the promotion of alternative business models as part of its drive towards what Ch�vez calls �socialism of the 21st century.�
Berkeley Institute for Research on Labor and Employment
Berkeley Labor Guides
Institute for Research on Labor and Employment

Much of the research in labor relations and organizational development is concerned with conventional post-industrial revolution business models, featuring private, corporate, or state ownership of the means of production and a hired labor force. These models almost invariably involve dynamic tension between owners, managers, and workers. However, there are ways to structure an enterprise that are predicated on shared ownership by the workforce and democratic management processes. Although these approaches represent only a fraction of businesses, they stand out as testing beds that encourage "thinking outside the box" and offer many valuable lessons.
Guardian - employees do better with co-ops,,2045418,00.html#article_continue

Guardian - employees do better with co-ops

Monday, April 09, 2007
A week ago, the Guardian ran a special supplement on social enterprise, with a cover story of 'Cooperatives pay big dividends'. The article looks at various worker co-ops and employee-owned firms like John Lewis. It makes the point that these firms have greater buy-in from their staff, so that they can perform better and are better able to weather rough times, with greater loyalty. John Lewis' staff's huge bonus this year - 18% of their salary - is cited as one motivation: money that would otherwise have gone to institutional shareholders. Co-ops and the like can also ensure that they work in the long-term interest of their staff, and develop new markets by investing in the business rather than pay dividends.

The Guardian makes the point that much of co-ops' raised performance and staff buy-in is due to employees' increased commitment and consequent higher work levels. The question is whether this could be the same in every institution. It somehow seems unreasonable to ask lower-paid staff in the NHS, for example, to work harder and longer hours for democratic involvement and pay schemes. Nevertheless, organisations could improve productivity if staff are taking less time off sick, or firms learn to adapt around the needs of staff and work-life balance - even in the NHS. Foundation trusts should be making every effort to recruit and engage staff, because their voice is necessary in the effective running of the NHS but also because they should aim to empower staff and get the best out of them.
Ohio Employee Ownership Center

The Ohio Employee Ownership Center (OEOC) is a non-profit, university-based program established in 1987 to provide outreach, information, and preliminary technical assistance to Ohio employees and business owners interested in exploring employee ownership. The OEOC provides ownership training on a single and multi-company basis to existing employee-owned firms and is funded by grants from the Ohio Department of Development, private foundations, dues from firms belonging to Ohio's Employee-Owned Network, income from training contracts and donations.
National Cooperative Business Association

NCBA is the lead national membership association representing cooperatives of all types and in all industries. We are democratically organized and operate according to internationally recognized cooperative principles.

Through our comprehensive education, co-op development, communications, public policy, member services, and international development programs, NCBA helps co-ops strengthen their businesses so they can better serve their members. It also provides a strong, unified voice on Capitol Hill.

Our Mission
To develop, advance and protect cooperative enterprise.

Our Vision
NCBA is the leading U.S. organization strengthening the cooperative form of business to empower people and improve quality of life worldwide.

Our Goal
To make cooperatives a strong, distinct and unified sector, recognized by the American public.

Our Members
NCBA membership is open to all cooperatives and associations of co-ops. Our member co-ops operate in the areas including agricultural supply and marketing, childcare, energy, food distribution, processing and retailing, financial services (credit unions), health care, housing, insurance, purchasing and shared services, and telecommunications.

NCBA associate members offer goods and services to the cooperative sector. Our individual members support our legislative and business development work.
University of Wisconsin Center for Cooperative
University of Wisconsin CENTER FOR COOPERATIVES

Established in 1962, the University of Wisconsin Center for Cooperatives (UWCC) strives to study, promote and research cooperative action as a means of meeting the economic and social needs of people.

As a member of the Cooperative Education Alliance, a partnership between the Wisconsin Federation of Cooperatives, the Minnesota Association of Cooperatives and UW Extension, the Center organizes various extension/outreach programs directed at all aspects of cooperative business principles, organizing cooperatives, cooperative financing, cooperative structure, cooperative management, leadership and governance, and related topics for both agricultural and consumer cooperatives. The Center also conducts applied and theoretical research on a variety of cooperative issues. As a result, UWCC faculty and staff are involved in numerous multi- state and multi-disciplinary research projects.

One of the oldest cooperative centers in the country, the Center is an inter-disciplinary unit combining the resources of the College of Agricultural and Life Sciences and University of Wisconsin Cooperative Extension. Center activities are conducted through partnerships with UW-Extension agents, UW faculty, state cooperative councils and others.
Paraprofessional Healthcare Institute

The Paraprofessional Healthcare Institute is addressing the direct-care staffing crisis in long-term care through:
Childspace Cooperative Development Inc
Childspace Cooperative Development Inc.
5517 Greene Street
Philadelphia, PA 19144
(215) 842-3050

Non-profit developer of worker cooperative childcare centers. Childspace CDI�s mission is to improve the quality of jobs for traditionally low-paid child care workers, and, thereby, the care received by children.

Childspace Daycare: Center Germantown; 215-849-1660
Childspace Daycare: Center Mount Airy; 215-248-3080
Childspace West: 4910 Wyalusing; 215-473-7914
Project Learn Cooperative K-8 school in Mount Airy
St. Mary's Cooperative Nursery School in West Philly
WAGES - Women's Action to Gain Economic security
WAGES - Women's Action to Gain Economic Security

The mission of WAGES is to promote the social and economic empowerment of low-income women through cooperative business ownership. Our unique strategy is to develop eco-friendly housecleaning companies that provide stable, safe and dignified work for their worker-owners while protecting the environment in which we live.

With WAGES' assistance, women move out of poverty through cooperative ownership. We make use of the cooperative model to allow women to pool their skills and work together to succeed. A cooperative is a business owned and controlled by those who work in it. Members make decisions democratically by giving each person a vote and distributing income equitably to all workers.
Cooperative Home Care Associates (CHCA)-Bronx
Cooperative Home Care Associates (CHCA) is a nationally recognized, South Bronx-based owner home care agency. Founded in 1985 to provide quality home care to clients by providing quality jobs for paraprofessionals, CHCA now anchors a national cooperative network generating over $60 million annually in revenue and creating quality jobs for over 1600 individuals.
Capital Ownership Group
The Capital Ownership Group (COG)
COG develops positive responses to globalization - focusing on employee ownership best practices and strategies internationally.
Just as most of the world�s countries are embracing democracy, however flawed, the largest corporations are eclipsing many of the world�s governments in economic power and political influence. Globalization needn�t require a loss of local community control. We can make better choices.
The Capital Ownership Group (COG), is a non-profit network of professionals, academics and activists on six continents, using broad ownership to abate the negative effects of globalization.
COG hosts a library of articles of interest:
National Center of Employee Ownership
National Center of Employee Ownership (NCEO)

"The single best source of information on employee ownership anywhere in the world" (Inc. magazine)
The National Center for Employee Ownership (NCEO) is a private, nonprofit membership and research organization that serves as the leading source of accurate, unbiased information on employee stock ownership plans (ESOPs), equity compensation plans such as stock options, and ownership culture. We are the main publisher and research source in the field, hold dozens of Webinars and live meetings annually, and provide services to our thousands of members.

Check out: Introduction to Management Buy-Outs Using an ESOP
By Robert B. Webb III, Squire Sanders & Dempsey L.P.
Nov 2, 2006 - 12:55:02 AM
Community Wealth
Cooperatives are an established community wealth-building strategy that can be found in many economic sectors, including banking (credit unions), agriculture, electricity generation and transmission, telecommunications, housing, and child care. In every case, cooperatives operate on the basis of the core democratic principle of �one person, one vote.� In 2003, the top 100 U.S. co-ops alone had $117 billion in sales. Areas of recent growth include natural food groceries, purchasing cooperatives, and worker cooperatives.

They also have a library of articles on ESOPs:
The ESOP Association
The ESOP Association, founded in 1978, is a national non-profit membership organization, with 18 local Chapters, serving approximately 2,400 employee stock ownership plan (ESOP) companies, professionals with a commitment to ESOPs, and companies considering the implementation of an ESOP. The Association is the only association devoted solely to ESOPs. Promoting and enhancing laws before Congress and regulatory agencies that govern ESOPs and providing its members with expert educational ESOP programming and information are its main focuses. For more information regarding The ESOP Association e-mail or by phoning toll free 1(866) 366-3832.
IRS Code on ESOPs
A. Definition. Section 407(d)(6) of the Employee Retirement Income Security Act of 1974, as amended (�ERISA�) and Section 4975(e)(7) of the Internal Revenue Code of 1986, as amended (�Internal Revenue Code�), define an employee stock ownership plan (an �ESOP�) as a stock bonus plan, or combination of a stock bonus plan and money purchase pension plan, which is qualified under Section 401(a) of the Internal Revenue Code and is designed to invest �primarily� (more than 50 percent of plan assets are invested in qualifying employer securities) in qualifying employer securities (generally referred to as �employer stock� or �company stock� in this memorandum). Please note that as a result of the Small Business Job Protection Act of 1996 an �S corporation�, effective for taxable years beginning, on and after January 1, 1998, may sponsor an ESOP without relinquishing its �S corporation� status. The Taxpayer Relief Act of 1997 modified a number of 1996 Act and Internal Revenue Code provisions relating to S corporation ESOPs for tax years beginning on and after January 1, 1998.
Recuperated Enterprise in Argentina
Argentina�s worker-run factories are setting an example for workers around the world that employees can run a business even better without a boss or owner. Some 180 recuperated enterprises up and running, providing jobs for more than 10,000 Argentine workers. The new phenomenon of employees taking over their workplace began in 2000 and heightened as Argentina faced its worst economic crisis ever in 2001. Nationwide, thousands of factories have closed and millions of jobs have been lost in recent years. Despite challenges, Argentina�s recuperated factory movement have created jobs, formed a broad network of mutual support among the worker-run workplaces and generated community projects. (Continued at
The Take
In suburban Buenos Aires, thirty unemployed auto-parts workers walk into their idle factory, roll out sleeping mats, and refuse to leave. All they want is to re-start the silent machines. But this simple act - The Take - has the power to turn the globalization debate on its head. (
Mondragon Mondragon Corporaci�n Cooperativa is the fruit of the sound vision of a young priest, Don Jos� Mar�a Arizmendiarrieta, as well as the solidarity and efforts of all our worker-members. Together we have been able to transform a humble factory, which in 1956 manufactured oil stoves and paraffin heaters, into the leading industrial group in the Basque Country and 7th in the ranking in Spain, with sales of 11,859 million euros in its Industrial and Distribution activities, 11,036 million euros of administered assets in its Financial activity and a total workforce of 78,455 at the end of 2005.
The Network of Bay Area Worker Cooperatives or NoBAWC (pronounced "no boss") is a grassroots organization of democratic workplaces dedicated to building workplace democracy in the San Francisco Bay Area and beyond. As the name implies, NoBAWC is comprised primarily of worker cooperatives. A worker cooperative is an enterprise that produces goods, distributes goods and/or provides services and is owned and controlled by its worker-owners. Ownership of a worker cooperative is vested solely with the worker-owners on an equal basis. Moreover, worker-owners control the resources of the cooperative and the work process. Each worker-owner has equal decision-making power and ultimate authority rests with the worker-owners as a whole. Worker control can be exercised directly or indirectly by worker-owners. If exercised indirectly, members of representative decision-making bodies (e.g. a Board of Directors) must be elected by the worker-owners and be subject to removal by the worker-owners.
US Federation The United States Federation of Worker Cooperatives is a national grassroots membership organization of and for worker cooperatives, other democratic workplaces, and the organizations which support the growth and continued development of worker cooperatives. We were founded in 2004, the result of several years of organizing on the part of worker cooperatives and regional groups from around the country.
Leland Stanford
Beyond Capitalism: Leland Stanford�s Forgotten Vision by Lee Altenberg
At the root of Leland Stanford�s interest in worker cooperatives may have been a core experience going back thirty-five years, to his days with the Argonauts in the California gold rush. In 1852, just a few years after gold was discovered in California, the 28 year old Leland Stanford decided to join his brothers in Gold Country. His wife Jane�s parents insisted that she remain home in Albany, New York, so Leland headed off alone. He spent three years with his brothers in Eldorado County running a hardware business for the gold miners. The anarchy of the gold rush had produced a self-organized system of informal miner cooperatives. It was with these miners that Stanford saw cooperation first-hand as an organizing force. In the newspaper interview Stanford continues with a description of this phenomenon.
Levi Factory in San Antonio
On January 20, 1990 Levi's Strauss & Company located on South Zamora Street in San Antonio, Texas announced that the plant was closing leaving 1,150 unemployed workers, mainly women, and relocating to Costa Rica. The majority of the displaced workers were Mexican and Mexican American women, many of whom spoke only Spanish, who were left with little severance pay, no pension, healthcare, and ineffective retraining programs, making it virtually impossible to find decent employment. Fuerza Unida was founded in February 1990, when twenty-three of these laid off women workers gathered and developed the "Women Garment Workers Justice Campaign". The campaign included a class action lawsuit (defeated in 1996), a mail-in campaign of previously-purchased Levi's products and a national boycott. Since the boycott and lawsuit, Levi's has given more notice to workers of a plant closure, larger benefit packages and more extensive retraining programs. And we at Fuerza Unida learned we are not alone.
Populist Moment
The Populist Moment: A Short History of the Agrarian Revolt in America (Galaxy Books) (Paperback) by Lawrence Goodwyn (Author) "He was the largest one county and Justice of the Peace in the next and election commissioner in both, and hence the fountainhead if..." Key Phrases: cooperative crusade, central state exchange, greenback doctrines, People's Party, Farmers Alliance, William Lamb (
Int'l Labor Org
International Labor Organization (ILO) Cooperatives in the ILO The ILO views cooperatives as important in improving the living and working conditions of women and men globally as well as making essential infrastructure and services available in areas neglected by the state and investor-driven enterprises. Moreover, cooperatives have the potential to advance the concept of decent work. This is because they: * Promote fundamental principles and rights at work by encouraging freedom of association and work-place democracy. * Create greater opportunities for women and men to secure decent employment and income by enabling their members to combine resources, skills and talents. * Enhance the coverage and effectiveness of social protection by providing the socially excluded with basic social services. * Strengthen tripartism and social dialogue by defending the interests of the rural poor and unprotected workers. The work of the Cooperative Branch, based on the New ILO Recommendation No. 193, (2002), includes: providing policy advice to ILO Member States; technical cooperation; organizing international meetings; producing documentation and information to increase public awareness of cooperatives; and promoting cooperative values and principles. The technical cooperation activities cover a wide range of themes from cooperative legislation and human resource development to job creation, poverty alleviation and local economic development.
UC Davis Links
Links to many useful documents including a user-friendly guide for people interested in organizing a cooperative to create income and employment opportunities. Includes organizing steps, discussion of feasibility study and business plan, examples, and an annotated bibliography.
Especially important is the "Legal Sourcebook for California Cooperatives"
American Coops

Online History of Worker Cooperatives
History of Work Cooperation in America - WORKER COOPERATIVES VS. WAGE SLAVERY (Co-ops, Unions, Collectivity and Communalism from Early America to the Present) By John Curl Today the vast majority of people in America are employees,"wage earners," at least the vast majority of those who can find a job at all. This wasn't always the case. There was a time, not so long ago, when the vast majority were self-employed. Being an employee was considered a form of bondage; one submitted to it due to economic hardship, for as short a time as possible, then became once more "free."