Monday, November 08, 2010

co-ops

Ode | In Quezon City, a new approach to funding funerals is just one way the Inner City Development Cooperative is bringing fresh life to this impoverished neighborhood of Manila, the capital of the Philippines.

The Inner City Development Cooperative (ICDC) offers microcredit loans, training in business skills and financial literacy, health care support, emergency programs and other services to urban squatter communities like the one in Quezon City. ICDC’s membership is comprised of more than 3,000 “urban settlers” who live in scavenged metal shacks with dirt floors built with materials gathered from nearby garbage dumps.

Eufrecina De Jesus, ICDC’s founder and director, says the cooperative model—in which the employees are also the owners of a company—is the only solution for combining the power of business with the social goal of solidarity. And ICDC’s low-cost memorial service is one way the co-op has been making a big difference.

“Funerals are an important part of our culture, yet are very expensive for the urban poor,” says De Jesus. Before the ICDC program, “many members turned to loan sharks and went deeply in debt burying loved ones. Now, as members of a co-op, they can purchase funerals that cost dramatically less than other options.”

But ICDC services don’t stop there. The co-op is expanding its activities through strategic partnerships, including an alliance with the Global Initiative to Advance Entrepreneurship (GIVE) to establish a cooperative that will provide business mentoring, socially responsible outsourcing and affordable childcare to single-parent entrepreneurs. (Full disclosure: The author is the founder of GIVE.)

The economic meltdown and subsequent global recession have exposed crucial flaws in the way the economy operates, foremost among them the realization that economic growth alone isn’t enough; to be sustainable, growth must be harnessed to social goals. Co-ops have been tying the two together since the late 18th century, when the ventures started appearing as a way for city dwellers to secure affordable food during the Industrial Revolution.

Given the economic predicament, co-op advocates believe it’s once again time for the model to shine. “If you take a look at the cooperatives when they’ve really excelled, and when people have been drawn to cooperatives, it’s when there’s economic or social upheaval,” notes Paul Hazen, president and CEO of the National Cooperative Business Association (NCBA). Increasingly, co-ops are stepping in to address current economic and social upheaval, especially in sectors in which the market and governments are unable to meet human needs.

In the U.S., Benjamin Franklin established one of the earliest co-ops, in 1752. It survives to this day as The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire, the oldest fire insurance company and cooperative in the nation. Co-ops grew through the Great Depression and the New Deal, most notably in delivering electricity to rural areas.

Since the late 1960s, a wave of cooperatives have emerged as communities joined together to create businesses that stocked natural foods. But contrary to widespread belief, co-ops are not mere vestiges of the counterculture. They range in size and scope from small local storefront businesses to large Fortune 500 companies serving more than 750 million people worldwide.

In many countries, cooperatives are nationally respected brands, including the Danish butter Lurpak; Champagne Nicolas Feuillatte and the Crédit Agricole bank in France; Edeka, the largest supermarket corporation in Germany; the Dutch dairy producer and distributor Campina; and Jarlsberg Cheese in Norway. In the U.S., Land O’Lakes, Sunkist, Ocean Spray and Ace Hardware are all co-ops.