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Co-op Power

The co-op business model is shining brighter next to Wall Street’s tarnished image.

January 10, 2012
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  FOCUS

  • Consider services your CU could offer to worker-owned and consumer cooperatives.
  • Seek opportunities to build public awareness through joint promotions or events with area co-ops.
  • Board focus: Determine how your CU can showcase its strengths during the International Year of Cooperatives.

 

Working in a credit union appeals to Jon Reske for many reasons. One is that his credit union—UMassFive College Federal Credit Union—can make business decisions with long-term goals in mind, not just quarterly profits.

“We don’t have to worry about tomorrow’s stock value,” says Reske, vice president of marketing at the $347 million asset credit union in Hadley, Mass. “I’ve been in bankers’ offices, and they have the stock ticker on their television screens. They’re focused on that all day. We don’t think like that.”

No credit union does. As financial cooperatives, credit unions focus on what’s in their members’ best interests, not on stockholders’ fast financial gratification.

Still, some credit unions downplay their cooperative structure, figuring it’s a difficult concept to convey in advertising or marketing materials. Other credit unions, however, are trumpeting their co-op heritage. And they’re joining forces with cooperatives from other sectors, such as grocery and housing co-ops, for mutual benefit.

Building alliances

About 70 cooperative businesses dot the landscape of the Upper Pioneer Valley in western Massachusetts. “Some don’t even know the others exist,” Reske says. To remedy that condition, several co-ops joined together to create the Valley Co-operative Business Association (VCBA).

“We hope to become like a Chamber of Commerce for local co-ops,” Reske says. UMassFive College Federal is one of the four co-ops, and the only credit union, on VCBA’s steering committee.

The idea for VCBA sprang out of discussions about ways to celebrate the International Year of Cooperatives in 2012. Besides raising co-ops’ awareness of each other and finding ways to work together, VCBA aims to boost awareness of cooperatives among valley residents. Several co-ops, for example, pooled money to run a full-page ad in the local newspaper in November.

“We’ve been collaborating for a long time, especially with credit unions,” Reske says. “So our extension to co-ops in other sectors is natural for us. Collaboration is in our blood.”

In Austin, Texas, people from diverse co-ops formed the Austin Cooperative Think Tank (ACTT). One of the organizers was Kelsey Balcaitis, community education specialist at $860 million asset A+ Federal Credit Union in Austin.

Balcaitis got involved in the first group of young credit union leaders—later to become known as the Crash Network—who “crashed” CUNA’s Governmental Affairs Conference (GAC) in 2010 and returned to the GAC again in 2011. The group is still active and stays connected via an online community.

After the GAC crash, Balcaitis returned to Austin to start a young credit union professionals group there. “Brent Dixon—the Crash Network organizer and the young adult advisor for Filene Research Institute—suggested I also invite other cooperatives to talk about cooperative principles,” she says.

Several people gathered at a coffeehouse, and ACTT was born. So far, the group has grown to about 70 people from about 20 different co-ops. ACTT is trying to build a robust cooperative economy in Austin.

“Cooperatives share a common heritage—we’re all user-owned entities—and we believe there’s a lot of power in that shared heritage,” says Dan Gillotte, general manager at Wheatsville Food Co-op.

ACTT wants people to know that a cooperative business model is a strong business model. “We’d like the word ‘co-op’ to become part of everyone’s vocabulary,” Balcaitis says. “When people hear the word ‘co-op,’ we want them to know what that means.”

New York City is another setting for co-op collaboration. In early November 2011, about 125 representatives from diverse co-ops gathered for a seminar titled, “New York: Building a Cooperative City,” convened by the National Federation of Community Development Credit Unions.

“This seminar kicks off a year-long campaign to raise the profile of cooperatives in New York City and beyond,” says Cliff Rosenthal, the Federation’s president/CEO.

Rosenthal sees multiple opportunities for co-ops to do joint marketing and membership building. People who are members of food co-ops, for instance, are prime candidates for credit union membership. “We estimate that well over 
one million people in New York City are co-op members,” he says, “and most of them don’t know it.”

With today’s economic crisis, there’s never been a better time to change that, he believes. “We have the potential to turn more people on to the notion that cooperatives are a better way to do business and a way to improve their lives.”

Next: ‘Co-opalooza’

 

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