Embracing Our Cooperative Identity: The International Year of Cooperatives
by: Pablo DeFilippi, Membership Director, National Federation of Community Development Credit Unions
As you are well aware, this past October 31st the United Nations General Assembly declared 2012 as the International Year of the Cooperatives (IYC), highlighting the contribution of cooperatives to socio-economic development, as well as recognizing their impact on poverty reduction, employment generation and social integration. ICY presents a truly unique opportunity for cooperatives in general and credit unions in particular to promote not only these contributions to the US and global economy, but also our uniqueness as a business model that’s both sustainable and equitable.
Surprisingly and almost six months into this announcement, we don’t seem to be fully taking advantage of this opportunity both to educate the general public about cooperative enterprises and to establish the foundations for stronger and more effective cross-sector collaborations.
We’re having a hard time getting the message and positioning our cooperative brand across in the consumers’ mind. Why is that? Think about this: 2005 was the International Year of the Microcredit and when that year was over microlending had become a term most consumers were familiar with and ACCION, FINCA, Grameen and other microfinance organizations had gained significant recognition.
Of course, the cooperative sector is much bigger and complex, which means that coordination takes a lot longer, let alone come together under a unified message, but it must be done. The first step is to truly embrace our cooperative roots and promote that uniqueness that sets us apart from any other type of financial institution. How many credit unions use the internet domain .coop? Unfortunately too few…in comparison, approximately 65% of all electric coops use it and a whopping 95% of foods coops do. On the positive side, leading CU organizations such as CUNA, NCUF, WOCCU and my organization, the National Federation of Community Development Credit Unions use the domain. What simpler way to show our members, potential members and the entire world that we aren’t just another financial institution competing for this business…we’re much more than that.
A wonderful example of using our cooperative identity to differentiate ourselves in the marketplace is what Seattle Metropolitan Credit Union has done with their website. Just visit www.7principles.coop to see how effectively they use their cooperative identity to set themselves apart as a financial institution and as a cooperative.
When consumers have a vested interest, they are more loyal and more committed. They use more services and are less likely to switch simply because somebody else is offering a higher interest rate. But how many of us really treat our members as such and not as customers? How many credit unions provide new member tool kits and take the time to explain what a financial cooperative is all about? What would happen if we gave every new person who opens an account with us, an “ownership manual”? Wouldn’t that make a huge psychological impact? Would that person’s attitude radically change when if they understood that they’re actually owners?
Of course, this implies that we have to walk the talk. We can’t just talk about the principles, we must turn them into actions and one of the most difficult ones is member participation and representation. We’re first and foremost “associations of individuals who’ve come together to pursue a common goal”. True, for most consumers, that’s an abstraction but it gains meaning as we engage them in our institution’s decision making process. Democracy, participation, representation…these are concepts people respond to, particularly when everyone is trying to create their own communities.
It’d be great if we could measure how well we apply and practice our cooperative principles. CU Answers is attempting to do just that. Check out Your Cooperative Score which gives you tools to rank for instance, how much effort you put in your Annual Meetings and board elections. How many people show up? Are you just happy getting a “quorum”? Do you have to count your employees to get there? Do you collaborate with others in the industry? With what frequency?
Now, getting back to IYC, I urge you to go to www.usa2012.coop to download, materials, toolkits and learn about what’s happening. We must be proactive and contribute to this effort. Don’t wait for others to do something first…take the lead.
For instance, the day after the UN declaration, my organization hosted a cooperative summit that brought together credit unions, food, housing, and worker co-ops. We are now organizing, facilitating and coordinating events under the theme New York: Building a Cooperative City, capitalizing in the fact that as many as 1.5 million New Yorkers are members of at least one cooperative. Even the theme of our Annual Conference underscores our commitment to the cause: Celebrating Cooperative Finance 2012. In Syracuse, one of our member CDCUs, Cooperative Federal played a leading role in the organizing of a “Upstate Cooperatives Summit” that took place on March 31 upstate New York.
As per the using IYC as a catalyst for cooperatives of all types to find concrete, practical ways to collaborate and support each other, the problem is if not now, then when? Cross-sector collaboration isn’t just a philosophically driven imperative…it’s a business opportunity, and a huge one!
The National Cooperative Business Association reports that there are near 30,000 cooperatives in the US, which operate at 73,000 places of business nationwide. These cooperatives own $3 trillion in assets, generate around $650 billion in revenue, provide over 1 million jobs and pay $25 billion in wages and benefits. Americans hold 350 million memberships in cooperatives which generate nearly $79 billion in total impact from patronage refunds and dividends. The exact total number of individuals in the U.S. who are members of at least one cooperative is difficult to estimate because many individuals are members of multiple cooperatives but consumer cooperatives have aggregate memberships of 340 million. Click here to view the full report on the impact of cooperatives on the U.S. economy conducted by the University of Wisconsin Center for Cooperatives (UWCC)
Cooperatives come in all sizes and types: there are agricultural coops such as Ocean Spray (the nation’s leading bottled juice company), Florida’s Natural, Sunkist (the world’s largest co-op marketing fruits and vegetables), Blue Diamond (the world’s largest tree nut producer), and some household brand names such as Land O’ Lakes, Cabot Creamery and Organic Valley; food coops; healthcare coops such as HealthPartners, Inc. (the nation’s largest consumer-owned HMO) and Group Health Cooperative; housing coops (there are more than 1 million units of cooperative housing in the US, with large numbers located in major urban areas like New York, Chicago, Boston, San Francisco and Washington, D.C.); purchasing coops; utility coops, etc.
So how does cross-sector collaboration takes place? Fortunately there’s a rapidly growing number of experiences worth mentioning, particularly between credit unions and food co-ops: In Madison (WI) Summit CU has a partnership with Willy St.; Spire CU in Minneapolis (MN) has credit card branded with Wedge food co-op; A+ CU in Austin (TX) partners with Cooperative Think Tank food co-op; Hoosier Hills FCU in Bedford, (IN) made a business loan to Lost River Community Co-op ; Park View FCU in Harrisonburg (VA) is the servicer for Friendly City Food Co-op and also has an ATM on their premises.
Four of our member credit unions have done similar work: Brewery CU in Milwaukee (WI) operates a branch in Outpost food co-op; ASI FCU in New Orleans (LA) provided financing to renovate a facility that houses the New Orleans Food Co-op , as well as other small business. ASI also operates a micro-branch in the same location. In New York City, the Lower East Side People’s FCU has become the lender of choice for Housing Development Fund Corporations (HDFCs), limited equity co-ops that provide affordable housing to low and moderate income New Yorkers. LESPFCU has made more than $7.5 million in loans to 46 HDFCs and provided $9 million in financing for the purchase of over 120 apartment units. One more, East End Food Co-op Credit Union was even established by a food co-op.
Beyond the individual cases, think of the synergies that could be unleashed by broader collaborations. Imagine the power of system wide collaborative efforts between electric co-ops and credit unions, between agriculture co-ops and us…the sky is the limit, but who’s going to make the first move? Look around in your community and reach out to other cooperatives. Let’s not wait until 2012 is over to do something about it.
Learn more:
www.imagine2012.coop: October 6 to 8 Quebec International Conference in Cooperative Economics
Master of Management – Co-operatives and Credit Unions(MMCCU) a partnership between Saint Mary’s University and the Co-operative Management Education Co-operative.
Pablo DeFilippi is the Membership Director for the National Federation of Community Development Credit Unions, a national, nonprofit association that represents, supports and invests in credit unions serving predominantly low-income, financially underserved communities. DeFilippi has more than 20 years of experience in community finance working with regulated financial institutions both in the domestic and international arena. www.cdcu.coop
