Youth Realities & Responses

COOPERATIVES REFERENCED

STATEMENTS REFERENCED

ELIGIBILITY 

The most common way in which coopyouth have managed their exclusion from conventional capital systems is by avoiding them entirely. In some instances, those cooperatives that financed themselves without support from conventional financiers “earned” the respect and attention of conventional funders after much time and work. While this is wholly unjust, especially given the fact that most unconventional funders (e.g. individual community members) have more at stake than conventional funders (e.g. corporate banks with limited liability structures), it is worth noting. Finally, one of the cooperatives interviewed was the recipient of special funds for which youth were exclusively eligible.

Speculative Labor

Red Root (Worker, Philippines) slowly scaled themselves using their own labor and borrowed equipment. They pieced together small contracts until a bank was willing to support them with a credit account. Now, Red Root finances many of its projects using debt or by taking on operational loans to cover costs until the contract is paid at the end of the project. While these graduated methods of doing speculative labor were not part of their original financial plan for the enterprise, they report that having considerable credit they gained by scaling their enterprise the way they did is what allowed them to survive the work slowdown that took place as a result of the Covid-19 pandemic. Similarly, Youth Cooperative Hub (MSC, South Africa) slowly and painstakingly scaled their operations by, first, growing and selling spinach. Using the funds from the spinach sales and personal contributions, they ran a bake sale. Eventually, they were able to build up their finances sufficiently that they could pay the necessary upfront costs for educational events for which they charged a registration fee. Once they were successful in running income generating events, a government agency took notice and subsequently provided them a grant, which marked the beginning of a still enduring funding relationship. Both cooperatives did work and committed resources not knowing if the contributions would result in the scaling of their cooperative, but their speculative work paid off in the end.

Gradual, Stacked Fundraising

Alchemy Collective (Worker, USA) used a mixture of community crowdfunding and small loans from individual, long term customers to slowly - over years - acquire enough capital to both secure a lease for a full service cafe location and purchase necessary equipment for the space. Both the Global Youth Network (Network, Global) and Repaired Nations (MSC, USA) pursued relatively small grants (e.g. 5,000 usd) and then leveraged the first with additional funders as proof of their capacity to get additional funding. During the interview process for the toolkit, both cooperatives had scaled their operations for the year through the creation of a financial daisy chain of different funds. During that year, they are committing some of the funding to support them in developing a long term financial model (e.g. paying for labor to apply for grants, solicit sponsorships, etc.).

Service Sector

Many coopyouth choose to start a service-based cooperative (e.g. education, counseling), primarily because it requires much less start-up or development capital than industries such as manufacturing or retail. Over half of the respondents to a 2018 study on coopyouth entrepreneurship reported working in service industries (International Organization of Industrial and Service Cooperatives). Of those cooperatives interviewed for this study, just over half of the sixteen are in the service sector. In this way, most of the coopyouth initiated their cooperatives based on things they could do that did not require any capital at all.

Youth-Specific Funds

There is much more funding (grants, specifically) available for youth-specific projects by non-cooperative institutions than there is funding for cooperative-specific projects by non-cooperative institutions or for youth-specific projects by cooperative institutions. In other words, it is much easier to get funding for being youth than it is for being cooperative. Master Minds (Producer, Botswana) received a large founding grant from the national Youth Ministry, which allowed the cooperative to scale its operation in a way that seems sustainable. The grant was specifically for youth projects and did not stipulate the cooperative model as a requirement. Green Campus Cooperative (MSC, Canada) operates within a university structure, and the university has provided the cooperative significant financial support that allowed the cooperative to achieve an operational scale by virtue of its status as a student-run organization. The Cooperative Identity is often stronger within youth cooperatives than youth or student identities, so these funding options are sometimes forgotten or not considered; however, as illustrated, both public and private institutions typically have funding prioritized for youth and students. 

Common Equity

A strategic way in which a cooperative can be treated as a conventional non-profit, an entity which enjoys broader eligibility among grantmakers - in particular - as well as lenders, is to structure the cooperative as common equity. In this model, all surplus is reinvested in the cooperative and demutualization is made impossible, as all of the cooperative’s equity is considered an indivisible reserve. This model does preclude equity payouts, but not member bonuses that can be structured to essentially amount to profit-sharing by another name. If a cooperative operates with this equity model, it is able to incorporate in most places as a non-profit or comparable, thereby making the cooperative eligible than the average cooperative for funds ranging from charitable grants to conventional loans. Sheffield Student Housing Cooperative (User, UK) uses a common equity model for a few pragmatic and theoretical reasons. On the theoretical side of things, residential property prices change according to the “market,” i.e. an abstraction, and do so at different rates at different times due to factors beyond the control of the cooperative. SSHC does not pay out every member according to what value the property has accrued during their tenure because that value change typically has no relationship with the member’s contributions or behavior. More pragmatically, in order to calculate each member’s payout, the property would need to be appraised in some fashion that is likely to either be costly or ad hoc. Managing member transitions is much simpler without equity payouts for this and other reasons, especially in youth or student cooperatives that have especially high rates of member turnover. Still further, it is often easier to get a mortgage or other form of loan from most funders as a non-profit rather than a cooperative, purely due to the level of familiarity funders have with each model. The common equity model is used successfully by many group housing cooperatives, many serving mostly or exclusively student memberships, around the world. 

EXTERNAL CAPITAL = EXTERNAL CONTROL 

Sometimes external capital can be acquired without being heavily conditioned by the giver, but in most contexts, capital comes with “strings attached.” Coopyouth have successfully figured out strategies to access external capital without significant external control of their cooperatives. Further, in some financial relationships in which coopyouth are not granted sufficient autonomy, they are actively striving against that control.

Small, Non-Controlling Contributions

As outlined above in the examples of cooperatives that stacked small grants, loans, or donations, these projects have largely avoided the negative byproduct of potentially degrading external control by taking on capital in small enough amounts that the funder does not feel the need to oversee spending, tracking or reporting. While this strategy is resource and time consuming, it typically sidesteps the dangers of having non-members consider themselves to be “investors” in the cooperative. Similarly, Vio.me (Worker, Greece) held several community events as fundraisers that brought in anonymous donations from individuals. These events and small forms of fundraising also facilitated community members becoming better acquainted with the cooperative and both interested and engaged in its success, without feeling entitled to any level of operational control.

Personal Guarantees

While none of the cooperatives interviewed had determined a way to get around required personal guarantees, two cooperatives identified somewhat of an inverse strategy; accessing capital for which only individuals are eligible and leveraging that “personal” funding for their cooperative. One of the founders of Repaired Nations (MSC, USA) received an individual fellowship from a separate organization in the same community. They then treated that fellowship as the compensation for their otherwise uncompensated time doing community and legal work for the cooperative. Knowledge Worker (Worker, Denmark) utilized the individual unemployment benefits all of the cooperative’s founders were receiving from the federal government, to collectively finance the start-up of their enterprise. Both examples use individualized capital sources for collective benefit in ways that are unlikely to disrupt or corrupt the equitable distribution of ownership and control within the cooperative.

Host Institutions

If a youth cooperative is hosted by a large cooperative institution, it is essentially beholden to that institution should it choose to exercise some form of control (e.g. conditioning the use of funds to compliance with certain behaviors). The two regional cooperative networks interviewed for this toolkit - ICYC (Asia-Pacific, Network) and CRJ (Americas, Network) - both experienced this phenomenon and feel unable to further influence the dynamic. In the case of ICYC, they were given funds by a national federation within the region; however, regional federation leadership ignores their attempts at communication and refuses to distribute the funds. CRJ negotiated some degree of compromise with their regional host federation with regard to membership eligibility in their network, which now formally complies with the dues-paying standards of the host but also allows for youth unaffiliated with dues-payers to participate in informal events put on by the network. The solution to this issue requires elder host institutions within the Cooperative Movement to voluntarily change their behavior. Specifically, this requires host institutions to actively decouple the notion that membership and ownership in cooperativism is only accessible via financial capital, as well as to acknowledge that giving someone financial capital does not entitle the giver to control the recipient - rather, their autonomy must be respected. Coopyouth have explicitly called for autonomy in these intra-movement relationships that involve capital in various collective youth statements - first in 2012 when calling for cooperative institutions to freely fund youth and other marginalized peoples within the movement, again in 2015 when explicitly naming the necessity of wholly autonomous and funded youth bodies within the movement’s governance, and most recently in 2019 as part of a resolution introduced to and passed by the Board of the International Cooperative Alliance called for the funding and autonomy of all regional youth networks. 

REPARATIONS & REDISTRIBUTIONS 

Cooperativism, when practiced authentically and fully, has the capacity to repair past economic harms and correct current economic wrongs. The practices of giving financial reparations and actively redistributing wealth are; however, not often named explicitly within the Cooperative Movement. Repaired Nations (MSC, USA), a panafrican cooperative development organization, is a clear exception that actively and explicitly - using a self-help model - “creates redress for historic trends of oppression through cooperative training and development for collective ownership. We repair the effects of colonization and oppression by helping to weave interconnected communities into thriving, sustainable networks to equitably provide the essentials of life” (repairednations.org/about-us). Providing financial support to a cooperative such as Repaired Nations is a key way in which many in the Cooperative Movement can fully participate in reparations and redistribution, and is a move called for by coopyouth in various collective statements. The first recorded coopyouth statement was at the United Nations in 2012, when a group of international youth called for the transfer of funds from wealthy cooperatives to youth and other marginalized people specifically for them to develop cooperatives for themselves as they see fit. In 2014, coopyouth issued a statement that critiqued the predominant model for international cooperative events that prioritized the participation of wealthier people and cooperatives; they called upon wealthy cooperatives to specifically fund and center the perspectives of individuals and cooperatives most impacted by climate change, white supremacy, economic recession, and political unrest which serves as a form of both reparations and redistribution. The formal coopyouth resolution accepted by the Board of the International Cooperative Alliance in 2019 named that it is imperative that the Cooperative Movement fund the participation of youth in its events, as well as financially sustain the autonomous youth organizations within movement governance - without conditions. This resolution and final call presented the redistribution of wealth to youth as an imperative, rather than as a transaction for which something is owed or as a gift, as it is essential for the sustainability and success of cooperativism globally. More on the topic of Reparations and Redistribution is included in the key issue section on “Relationships of Solidarity.”