1. Steve Dubb, Research Director, The Democracy Collaborative
Community Wealth Building Creating the New Economy Rocky Mountain Employee Ownership Center conference Denver, Colorado
September 7, 2013
Steve Dubb, Research Director, The Democracy Collaborative

3. Building the New Economy Restoring Ecological Balance
“To avoid the tragedy of leaving a ruined world to our children and grandchildren, we humans must reduce our aggregate consumption to bring it into balance with Earth’s biosphere and simultaneously act to heal and nurture Earth's regenerative systems.”
Source: New Economy Working Group 3

4. Building the New Economy Restoring Equitable Distribution
“A growing body of research evidence suggests that societies that share wealth and work equitably among all their members enjoy greater physical and emotional health, stronger families and communities, less violence, and healthier natural environments.”
Source: New Economy Working Group 4

5. Building the New Economy Restoring Democratic Community
“Living democracy is true popular sovereignty—government of the people, by the people, for the people ... Most concretely, it is a daily practice of civic engagement through which popular sovereignty finds expression as part of the essential fabric of community life.”
Source: New Economy Working Group 5

6. Making the New Economy Real: How do you do it?
Three key principles
• Decentralization (subsidiarity)
• Democratic planning (especially at regional and local levels)
• Democratization of Wealth (pre-distribution) (Community Wealth Building)
Bottom line: Rebuilding community is critical to restoring the planet & people, but you can’t restore community unless community becomes a meaningful economic basis for ordinary people. 6

7. Democratization of Wealth Community Wealth Building
• promotes common ownership of productive assets
• anchors capital and jobs locally
• stops the leakage of dollars from communities
• supports individual and family wealth building
• generates revenues to finance public services
• leverages anchor institutions for community benefit
• contributes to local economic stability 7

8. Family Wealth Building Public Ownership or Investment
Continuum of Wealth-Building Strategies
BROADENING OWNERSHIP OVER ASSETS AND CAPITAL
Family Wealth Building
Shared Equity
Community/Worker
Ownership
Public Ownership or Investment
Individual Development Accounts
Microenterprise
Family Self-Sufficiency Program
“Baby Bonds” & child savings accounts
Earned Income Tax Credit volunteer assistance programs
Alternatives to predatory lending
Nonprofit financial education programs
Community Land Trusts
Limited Equity Housing Cooperatives
Deed restriction (inclusionary zoning)
Mixed ownership (Market Creek)
Program-Related Investments
CDC/CDFI equity investments or joint ventures
Community benefits agreements
Anchor institutions (eds, meds, churches, museums, libraries)
ESOPs or worker cooperatives
Consumer, producer, or purchasing co-ops
Credit unions
Community corporations
CDC or CDFI direct ownership
Social enterprises
Commons-based enterprises (e.g., Wikipedia, Creative Commons licenses)
Municipal enterprise
State & local venture investments
Public pension fund ETIs (economically targeted investments)
Public leases: land & transit development
Stock warrants in exchange for granting tax breaks (fair exchange)
Trustee ownership (e.g., Alaska Permanent Fund) 8

9. A Growing Movement
ESOPs: Members, Millions
CDFIs: Assets, Billions

10. An Integrated Community Wealth Approach
Putting the Pieces Together
Create culture of wealth building and ownership at the individual level
Create community owned enterprises that provide living wage jobs and anchor business in low-income communities
Link community businesses with anchor procurement needs
Individual
wealth
building
Community
ownership
Anchor
Institutions
Key Components

11. What is an Anchor Institution?
• “Sticky capital” that doesn’t get up and leave
• Typically among the largest employers in most major metropolitan areas
• Local economic engines: employ large numbers of people; purchase large amounts of goods & services
• Vested interest in surrounding communities
• Increasingly concerned with sustainability
• Typically public or non-profit “social mission”)
• Largely untapped potential

12. Ways to Leverage Anchor Institutions
Sources of Leverage
Available Means
Potential Benefits
$1 trillion a year in purchasing power, 5% of all employees
• Use of endowments
• Employment policies
• Local purchasing
• Real estate investments
• Technical assistance
• Business incubation
• Non-profit support work
• Revitalized neighborhoods
• Increased local hiring, livable wages
• Affordable housing
• New retail development
• Small business expansion
• Increased nonprofit capacity
Real estate, endowment assets
Research & technical expertise 12 12

16. Henry Ford Health System (Detroit)
Transparent Sourcing Policy: contracts of $20K or more must go out to public bid, making more contracts accessible to MBEs and WBEs
Set purchasing target: $100M purchasing goal from MBEs and WBEs; reached $86M; purchasing relationships with 660 minority-owned suppliers
Source Detroit: partners with other anchor institutions to drive portion of $1.6B in purchasing locally; $16.5M (about 1%) transferred to date

17. What is a social enterprise?
Nonprofit-owned business.
Business itself is often a for-profit (i.e., a for-profit subsidiary of a nonprofit organization.
Business has a “double bottom-line”—must contribute to the “mission” of the nonprofit while earning a profit, or at least reducing program costs.

18. Pioneer Human Services - Seattle (WA)
Nonprofit founded in 1962 to serve clients – ex-offenders and drug abusers
Initially nearly 100% grant funded
Today employs 700 people, most from their client base, in network of their own for-profit businesses (hotel, catering, manufacturing)
$55 million revenue; almost no grant funding
Anchored in the community

19. What is a CDC?
Community development corporations are locally based non-profits that promote investment in low and moderate income communities.
Over 51% of board are community residents.
Founded as part of civil rights movement, goal is to allow low-income residents to exert economic control over their communities.
From practically no CDCs 40 years ago, there are thousands today (2005 survey: 4,600).

20. New Community Corporation of Newark (NJ)
Founded in 1968 by Monsignor William Linder
Employs 1,300
Community-based business ownership
Developed shopping center that houses community-owned business & services
Assets exceed $500M
Income recycled to support day-care, after-school programs, health services, Youth Automotive Training Center
New Community And RPM Break Ground On New $27.4 Million Housing Development The NCC Family Resource Center takes a holistic approach to services by linking those who seek assistance with resources and information that will empower them to improve the quality of there lives. With the influx of many residents from various countries, this NCC department was created to meet the needs of a growing bi-lingual, immigrant community. Formerly known as The Hispanic Development Corporation, the new Adult Learning Center (ALC) has expanded its services to include the neighborhood’s primarily low-income immigrant populations (from many different countries), who have similar education and social services needs.

21. What is an ESOP? Tax-advantaged retirement plans for employees.
Invest primarily or exclusively in the stock of the employing company.
Can borrow money.
May own anywhere from a tiny minority share to 100% of the company.
Are highly regulated “qualified employee pension plans.”

22. New Belgium Brewery
456 employee-owners (as of Dec. 2012), nation’s 3rd largest craft brewer
Started ESOP in 2000; became 100% employee-owned in 2012
More than $180M in annual sales
Employee turnover estimated at 3%

23. What is a cooperative?
Four key types: consumer, producer, worker, and purchasing.
All based on 1844 “Rochdale” idea of limited return to capital and “one member, one vote.”
Largest sectors in the United States are credit unions (90 million members) and electrical co-ops (40 million members). About 30% of total U.S. agriculture production is marketed by farmer cooperatives.
Many familiar businesses are co-ops: e.g., Ace Hardware, Nationwide, Associated Press (AP).
Key U.S. growth sectors today are purchasing co-ops (five-fold growth since mid-1990s), food co-ops (double-digit annual growth), and worker co-ops.

24. Economic Impact of U.S. Co-ops:
30,000 U.S. Cooperatives
73,000 Places of Business
Economic Impact of U.S. Co-ops:
Assets
$ 3 Trillion
Revenues
$ 654 Billion
Wages & Benefits
$ 75 Billion
2 Million Jobs
857,000 direct

25. Namasté Solar (CO) 103 “team” members; one-half are owners
4 to 1 maximum salary ratio
One owner, one vote
#1 market share in CO
2,000+ systems installed
$15 million in revenue

26. Community Wealth Building Strategy
Example: the context of Cleveland, Ohio 26

27. Business Ideas You Might Encounter
Shuttle service to reduce driving
Environmentally friendly industrial-scale laundry service
Environmentally friendly energy & facility upgrade business
Green friendly practices in food service (recycled cutlery,etc.)
Business that will recycle non-hazardous medical wastes
Solar panel installation on rooftops
LED lighting
Locally grown organic produce
Green roof material growing
Tree farm
Mattress recycling
Document scanning
Organic waste facility
Inventory management
Stormwater infrastructure maintenance
Housekeeping service with non-toxic cleaning products

28. EVERGREEN COOPERATIVE STRUCTURE
ECC
Board of
Directors, 15 members, multi-stakeholder
GUC Initiative
Transit-Oriented Development
Education
Housing
Community Engagement
Evergreen
Cooperative
Corporation
(ECC)
Non Profit)
Committees:
Audit & Finance
Governance
Strategic Planning
Investment
Executive
Cooperative Businesses
Evergreen
Cooperative
Development
Fund
(LLC subsidiary of ECC)
CDFI
Evergreen
Business
Services
(for Profit)
Evergreen
Real Estate Corp.
(for Profit)
(for Profit)
CDE
(for Profit)
Structured
Fund
(non -Profit)
Human
Resources
Accounting IT TA

29. Building Community Support
Identify trusted partners in the community (churches, etc.)
Work with local residents to identify their concerns (door-to-door interviews, neighborhood circles, etc.) to forge a shared sense of ownership and responsibility between grassroots and institutional stakeholders.
Identify, develop, and support local leadership within local residents, groups and community organizations (coaching, study circles, etc.)
Support the development of local community media and information sharing 29

30. Key Elements to Adapt to Other Cities
Project champion: Provide seed capital, raise capital, hire consultants, and “lead the team”
Business Development: Recruit democratic management, oversee business planning, and provide technical assistance
Community loan fund incubator: Host loan fund
Workforce development capacity: Screen, recruit and provide customized training to workers
Local political buy-in: City assistance to obtain approvals and state & federal funding
Anchor backing: Commit to buy from community-owned business that meet quality standards
Atlanta Lettuce Works 30

31. Recap: Key Principles for Building Community Wealth
Start with values
Develop productive assets
Grow enterprises
Lead with demand
Strengthen support networks
Anchor ownership in community
Keep wealth local 31

32. Steve Dubb, sgdubb@yahoo.com
For more information
Steve Dubb,