Developing the cooperative sector of Northern Virginia: Worker-owner Experiences of Institutional Support

Cooperative enterprises have long existed as a sustainable and democratic alternative to traditional shareholder-owned firms. Some of the major problems cooperative enterprises face include issues related to longevity, access to capital, and wages for employee-owners. With these problems, it is important to look to the nascent cooperative sector in the Northern Virginia Region, which has a growing number of firms. Understanding the influence of local and national institutions on the success of cooperative firms can be done in part through gathering insight into worker-owner experiences of institutional support. This project uses in-depth, semi-structured interviews to analyze the experiences of firm members with the institutions. The project is ongoing, but there are some initial insights given regarding improvements in local institutions.

Hi everyone, my name is James condo. My project is on the relationship between cooperatives and supportive institutions in local areas. The full title of the project is quote, developing the cooperative sector of Northern Virginia worker owner experiences of institutional support and, and was completed with the support of Dr. Ben Mansky from the Department of Sociology and Anthropology at George Mason University. This project is a part of the Undergraduate Research Scholars Program. It’s sponsored by Oscar at George Mason University. And here I am seeking to explore the relationship between the health of the cooperative sector and local supportive institutions. It is important to begin by giving some background information on this project and its significance as part of an ongoing community engaged research effort by George Mason University as an intern for the democratizing Northern Virginia project of the Center for Social Science Research at JMU. One of my main categories for research and database collection was that of worker and consumer cooperatives, which are enterprises that are owned by employees or by customers or members. These enterprises are part of an emerging sector in Northern Virginia that exists alongside more traditional shareholder earned owned firms. Prior to exploring the state of the cooperative sector in Northern Virginia, it is important to review some of the existing literature surrounding cooperative firms and the problems that these firms face. Part of my reasoning behind looking toward the relationship between local institutional actors and cooperative firms is due to the understanding present in much of the literature of anger institutions, which are either municipal organizations or nonprofits which are large, consistent supporters and customers of a cooperative firm. This model of an anchor institution has been seen in places like Cleveland, Ohio, where the Evergreen cooperative lettuce growers and commercial laundry had the long term anchor institutions of the Cleveland Clinic, University Hospitals and Case Western Reserve University. Another major part of the literature regarding the economic viability of cooperative enterprises can be seen in the debates among scholars as to whether the most important factor in cooperative sector development is access to capital from finance ears, or whether local institutions can supplement any funding deficiencies. My methodological practices in this ongoing project involve the conducting of in depth semi structured interviews with member owners or employee owners of cooperative firms in the Northern Virginia region. Due to constraints on times and challenges. With approval from the internal review board, I’ve conducted an interview with members of a single firm. For the sake of people safety and anonymity, the name of this firm will not be stated. I will now explore some of the recurring themes that develop through the interview. The first of these is the lengthy process of requesting support. One of the interviewees mentioned that the process for receiving a grant took five years. So the process of requesting and receiving support from a local institution often requires patience and the need to wait to obtain initial capital and create a firm. Second, eligibility requirements can often be a hindrance to funding. A major challenge of this cooperative face was that despite being a mission driven firm in the same manner as a nonprofit would be their existence as a for profit institution meant that they were ineligible for a great deal of funding opportunities. The third of these issues is financing strategies and grants. Grant financing was really only a small part of the entire budget of this cooperative participant. The major source of funding was the use of member loans, in which multiple member owners of the firm took out loans to finance the business. This strategy of pulling capital is apparently common among cooperative startups. The fourth of these is very important, which is that your audience matters. Another recurring theme was that the audience of a cooperative firm is incredibly important. For example, there were many challenges related to potential financiers not understanding the model of a cooperative. And there also have been concerns regarding the political orientation of a cooperative firm.

Unknown Speaker 4:27
Here’s some key quotes that can help corroborate the themes of these cooperatives. First is that that is probably one of the biggest challenges for a co op is that banks and other businesses don’t understand the model. Thus, a major hurdle for cooperative firms is to receive support is increasing awareness of the existence of the cooperative model and how they function as a firm. Second is that we have made a very, very explicit or concerted effort to wherever possible stay out of politics. This was an initially surprising quote to me. But it fits into the recurring theme of knowing one’s audience. The avoidance of major political issues may not be a generalizable strategy, but it was still an interesting method used by this particular firm. Now move on to some of the limitations of the project. In the preliminary phase of the study, the sample size was that of three. So this is not a generalizable sample, but it does gather some interesting preliminary insight into the state of the cooperative sector. This research can also be eventually supplemented with quantitative data collection, though this was not necessarily in the scope of this particular project. In terms of future research, future research would be more interviews. It would also involve documenting grants and financial agreements of cooperative firms in order to have some more of a quantitative element to the research. In conclusion, the cooperative sector in Northern Virginia has the potential to be a thriving part of the local economy. But this requires reduction in bureaucratic hurdles and greater assistance navigating the particularities of funding and grant making. Finally, I would like to have some acknowledgments. So I would like to thank my mentor, Dr. Ben Mansky, and thank Oscar for funding the project and also thank the internal review board for cooperation with this research. This is my references. Thank you