Community Ownership: Helping People Fill Local Needs Through Shared Vision, Investment
Communities of all sizes and circumstances have watched their local newspaper fold in recent year, leaving people without information necessary for a cohesive community and functioning local democracy. In hundreds of rural towns, residents have no way to obtain fresh food without long, costly drives that also can be dangerous in winter months. And in countless cities, real estate leases are rising so fast that residents and local businesses are being displaced, and those without substantial wealth are denied opportunities to open a business.
These are just a few situations where traditional private investment is unlikely to help and traditional cooperatives can’t realistically raise the capital required. But from remote rural communities to the metropolis of Minneapolis, people have banded together to launch community-owned businesses filling those voids and empowering residents.
What Is a Community-Owned Business?
Community-owned businesses (COBs) are financed and owned collectively by local residents. COBs can provide a vehicle to fill local needs including local media, affordable broadband, fresh groceries, household goods, affordable commercial spaces and other community voids.
With COBS, ownership and control lies entirely with local residents. After a corporation is formed to start a business (or buy an existing one), shares are sold to residents who become the owners. These owners then elect a board of directors and handle governance, including hiring a manager(s) to run the day-to-day business operations. Bylaws ensure the businesses forever remain locally-owned and controlled.
Though COBs provide much promise for urban neighborhoods, many early efforts have been grocery stores in rural “food deserts” where depopulation or/and large chain stores some distance away have driven out traditional grocers.
In many such places, community ownership can be a game-changer because it shifts people’s consciousness. Shopping decisions no longer are just a choice between leaving town to the big store vs buying locally, but the opportunity for residents to buy from their own store.
The number of shares each COB investor may purchase usually is limited to ensure decisions reflect the interests of the community and prevent dependence on any one person. Community-owned stores have the additional benefit of tending to favor buying local products (and can write such preferences into their mission), broadening economic opportunity, increasing the local multiplier effect to build local wealth.
Are COBs Different from Cooperatives?
While COBs encompass cooperatives, most traditional coops depend on modest member fees. This approach lacks the potential to raise sufficient capital in many situations and typically requires a timeline of years to accomplish. A COB is well-suited to attract larger investments from some residents, enabling capital-intensive enterprises to start at scale. We fully support cooperatives, but have found many communities require an approach with flexibility, is simpler to set up and run, and — because it resembles traditional business structures — may make it easier to attract investment.
Can COBs Be Used to Prevent Closure of Needed Businesses?
Yes! COBs are not just a tool to fill areas of need — they are a tool to enable residents to buy a business that provides an essential service in cases where the current owners are selling or closing. There are countless business owners across the country without succession plans, putting towns or neighborhoods at risk of losing crucial services, jobs and local economic benefit. Creating a community-owned corporation also can provide aging business owners with the security of a willing buyer.
How Do We Create a COB?
Project coordinators Andrew Connor and Jeff Milchen assembled a team of nationally-recognized experts with expertise in managing legal, financial, and business planning, along with economic analysis work required to create COBs and invite inquiries from communities interested in starting a COB and offering a free assessment.
Once you make contact, we will perform an intake and assessment to help you determine if this model is a good fit for your circumstances. If so, we will customize a plan for your project, provide necessary technical support, and collaborate with you to co-manage the project from start to finish. The Center for Community Ownership will be an active partner throughout the entire process to help you succeed!
Community-Owned Businesses in the U.S. that are not traditional cooperatives)
Family Matters Malta, Montana
Washakie Wear Worland, Wyoming
Little Muddy Dry Goods Plentywood, Montana
Garnet Mercantile Ely, Nevada
Main Street Guymon Guymon, Oklahoma
Quimper Mercantile Port Townsend, Washington
Bobcat Cafe Bristol, Vermont
Jubilee Food Market Waco, Texas
Lodge Pole Trading Post Lodge Pole, Montana
Lake Grocery Willow Lake, South Dakota
Baldwin Market in Baldwin, FL is a municipally-owned grocery store launched in 2019. News coverage.
Both urban areas and rural towns are exploring community ownership models as a solution to food deserts. The non-profit Mandela Partners in Oakland, CA and Seward Coop (2016 article) in Minneapolis are other notable examples. The latter provides an interesting study in ensuring a coop serves the needs of a diverse working-class population.
Black Star Co-Op Austin, Texas (The first cooperatively-owned and worker self-managed brewpub)
Closed or Unsuccessful COBs (for which we have information)
Claire’s Restaurant and Bar; Hardwick, Vermont (Closed in 2014 after 6 years)
Planned general store; Greenfield Massachusetts, (failed to meet its fundraising goals and organizing ceased in 2011)
Helping More Communities Assess and Employ the COB Model
Many support systems exist for traditional cooperatives, but no support system exists to help people start community-owned businesses in North America. AMIBA is seeking funding to establish the Center for Community Ownership to fill this need. The Center will identify best practices, common challenges, and resources and create a national (or beyond) communication network for creating community-owned businesses. Please contact coordinators Andrew Connor or Jeff Milchen to learn more (email [email protected]).
News Coverage of COBs
When Towns Become Shopkeepers July, 2019
How to Feed the Masses in Small-town America September, 2016
How to Launch a Community-Owned Store 2012 (pdf)
Communities Saving Cherished Stores July, 2009
Town Working Together to Carry Groceries November, 2008
Thanks to Amy Campbell Bogie of the National Coalition for Community Capital for interviewing many of the businesses above.
If you know of examples to add in any category (including failed attempts), please tell us!
- Joshua Bloom, who has blogged on this topic, identifies four broad structures of community-controlled business:
- Cooperative: A communally owned and managed business, operated for the benefit of its members.
- Community-owned corporation: A traditional, for-profit corporation that integrates social enterprise principles.
- Small ownership group: A small, ad hoc investor group that capitalizes and/or operates a business as a partnership or closely-held corporation.
- Investment fund: A community-based fund that invests debt or equity in local business ventures.
Resources on Shared Ownership Models
A Cooperative Entrepreneurship Curriculum (Canada, 2016)
Keeping Wealth Local: Shared Ownership and Wealth Control For Rural Communities (Ford Foundation, 2009)
Strategies for Financing the Inclusive Economy (Democracy Collaborative, 2016)