CSRwire Talkback

By Susan Arterian Chang

In our last post we introduced Capital Institute’s Field Guide to Investing in a Resilient Economy series, which utilizes the power of narrative to recast the story of our financial system, chronicling the progress of transformative, scalable, real-world investment models that support the creation of a more just and resilient economy. 

We also highlighted the first Field Guide study, Grasslands, LLC. This week we explore the subject of Capital Institute’s second Field Guide study, Cleveland’s Evergreen Cooperatives.

A network of employee-owned, for-profit companies, the Evergreen Cooperatives initiative of Cleveland, Ohio, deserves high praise as an ambitious experiment in worker-ownership, anchor-institution-based “green” job creation, and wealth-building in an impoverished urban neighborhood.  

But we at Capital Institute see Evergreen as that and much more. 

Evergreen is a way forward for a great diversity of communities -- not merely those in inner cities -- to build resiliency and to redefine wealth through hands-on ownership of capital, a more creative and productive use of internal assets, and through shared purpose and respect for the limits of the earth’s regenerative capacities.

Cooperation Out of Collaboration

The Evergreen Cooperatives began as an unusual partnership among the Cleveland Foundation, the Democracy Collaborative at the University of Maryland, the Ohio Employee Ownership Center at Kent State University, and the anchor institutions of Cleveland’s Greater University Circle.

These organizations recognized that many of the initiatives they had undertaken to address poverty in the community—including transit-oriented development and affordable housing—had failed to create new wealth in the community. The Evergreen Cooperatives emerged out of their search for a more effective solution.

Small Coops Serving Large Institutions

When these collaborators got down to the nuts and bolts of deciding which cooperative businesses should be the first off the launching pad, they considered first which would best meet the procurement needs of the large, local anchor institutions like the Cleveland Clinic and University Hospitals. 

Requirements:

1. Cooperatives had to employ, at maximum build out, at least 50 workers, most of whom would be expected initially to require intensive on-the-job training.
2. The cooperative would also need to support workers at an hourly wage of at least $10.50 plus healthcare at no cost to workers.
3. Must be in a growing sector where "green" credentials could be leveraged to competitive advantage.
4. Be profitable enough to allow workers to accumulate at least $65,000 into their personal capital accounts at the end of eight years.

The first two Evergreen cooperative businesses--the Evergreen Cooperative Laundry and Ohio Cooperative Solar (now repositioning itself as an energy services company) -- were launched in October 2009.

The third, Green City Growers, a hydroponic food production greenhouse, is expected to harvest 3 million heads of lettuce and 300,000 pounds of herbs annually. The Neighborhood Voice, a not-for profit community newspaper, has become an effective vehicle for communicating the Evergreen Vision. A medical records scanning coop is now also in the pipeline.

Taking A Cue From Mondragon

Evergreen has adopted a number of the principles and structures of the famed Mondragon group of cooperatives of Spain. For example, it has established an umbrella organization, modeled on Mondragon’s, to be the keeper of the cooperative “vision” and to be a source of continuity for all of its cooperative enterprises, present and future.

Evergreen is also putting in place a financing vehicle, similar to Mondragon’s Caja Laboral Popular Sociedad Cooperativa de Credito, to provide funding for the expansion of existing coops and seed capital for new ones one.

“What we have learned from Mondragon is a way of relating to capital, a sense of our responsibility as stewards of it,” says Ted Howard, cofounder of the Democracy Collaborative and a key Evergreen strategist.

“That means preserving and enhancing it and passing it on to the next generation rather than maximizing short-term returns, flipping ownership or breaking it up. It is an extraordinary vision with sustainability at its heart.”

Creating New Businesses, Creating New Lives

A high percentage of Evergreen employee/owners were formerly among the ranks of the long-term unemployed. Some hold prison records or have struggled with substance abuse.

One of Evergreen’s greatest challenges but also one of its greatest achievements has been giving these individuals the opportunity to participate in a community- and life-altering work experience. As Howard says, they truly understand that they have the opportunity to be  “actors in history in their own lifetimes.”

Medrick Addison, one of Evergreen’s first employees and now operations manager for the Cooperative Laundry, explains how the Evergreen vision translates into the criteria used to select the employees who are invited to become coop members.

“We want people who really get those intangibles,” says Addison, “who get what this initiative means to this community and to Cleveland, and that you won’t get rich overnight. I can teach them a lot of skills, to run the machines, that isn’t hard, but to get them to understand what this is really about is something else.” 

He sums up his own and his fellow employee/owners aspirations: “The eyes of America are upon us. We have to make this work.”

Read the complete Evergreen Field Study.