With its new fund, the Cleveland-based Evergreen Cooperatives have a bold goal: to make it easy to transition a business to worker-ownership.
By: Eillie Anzilotti | Fast Company | November 13, 2018
In May, the?Evergreen Cooperatives, a network of?worker-owned businesses?in Cleveland, took over operations of a laundry facility owned by the Cleveland Clinic. On the surface, it was a straightforward business transaction. The Evergreen Cooperatives launched in 2009 with?Evergreen Cooperative Laundry, a small business owned and operated by just a handful of workers. Today, the whole network comprises the laundry, as well as a cooperative green energy business and an urban farm, and employs more than 220 people. After nearly a decade of steady growth, the Evergreen Cooperatives wanted to expand, and?taking over operations?of the Cleveland Clinic laundry facility was an opportunity to do so.
A?worker cooperative?is a business model designed to prioritize the people that keep the business running: the employees themselves. You might visualize a traditional business as a triangle, with the owner and CEO at the top, senior management beneath them, and the bulk of workers clustered in the broad portion at the bottom. Money flows from top to bottom, and by the time it gets to the workers, it can be stretched fairly thin. Worker cooperatives flatten this structure. Each employee of a worker co-op is also a partial owner. Member-owners collectively vote on decisions like salaries, schedules, and profit sharing. Because the employees are the ones making decisions that affect their own lives and well-being, they’re also more likely to stay at the business. In economically disadvantaged neighborhoods, like where the Evergreen Cooperatives operate, they help keep wealth in communities, rather than flowing outward to wealthy owners and managers who don’t live where the business is located.
After monitoring the success of the Evergreen Cooperatives in Cleveland’s poorer communities, the network now wants more businesses to get on board with it. The takeover of the Cleveland Clinic laundry facility was a pilot for a larger program, the Fund for Employee Ownership, that the Evergreen Cooperatives and the?Democracy Collaborative, a nonprofit focused on building community wealth, just launched to expand opportunities for co-op conversions. Initial funding of $5 million from a foundation (which is remaining anonymous) will allow the partners to replicate the model they tested with the Cleveland Clinic laundry facility: acquiring small local businesses looking for new ownership, then, once that transaction is completed, working with the employees to transition the business to a worker-owned cooperative. Over the next several years, they hope to use the initial funding to convert around seven businesses, and aim to eventually reach $30 million in funding.
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