3c hapter - Index of

From Brown Rice to Biofuels 175
are “have nots,” as the Wisconsin governor suggests, is the intent to
make us all “have nots?” Is Walmart really the new gold standard?
Clearly we are in need of some fresh thinking. And we could do
worse than to give the cooperative model some serious consideration.
“ Co- ops are ready for the mainstream,” says Neil. Pointing
to another set of protests—by members of the unionized Detroit
Symphony Orchestra, which cancelled its 2011 season after contract
negotiations failed—Neil, who is an accomplished composer
and pianist in addition to a fi nancial planner, says the
cooperative model could provide a solution. Why not structure
an entity where musicians, management, subscribers and donors
are all working together toward a common goal, he muses. “Let’s
develop a method of cooperation that would allow the organization
to fl oat freely amid the turbulent markets.”
The Un- Casino
Cooperatives are also fi lling a need among investors for sustainable
investment options and alternatives to the Wall Street casino.
As with all small businesses, access to adequate capital is the most
pressing challenge for new and established co- ops. Their main
sources of capital are membership fees— usually small sums paid
once in return for lifetime memberships—and retained earnings.
But neither method is very effi cient for amassing large amounts
of capital necessary for growth. That’s why more and more co- ops
are turning to their members to raise additional capital in the
form of preferred shares or long- term loans.
Black Star Co- op Pub & Brewery, for example, raised the
$600,000 it needed to build its brewery from a special class of
member- investors. In return for the nonvoting shares, priced at
$100 apiece, Black Star intends to pay a 6 percent dividend each
year once it begins operating in the black, which it is on track to
do very quickly. The board may elect to pay a higher dividend on
a good year, and reduce or even eliminate the dividend if the co- op
experiences a diffi cult year.
Cooperatives have an advantage here: They are often (but not
always) exempt from federal securities regulations, as long as they