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Blueprint tackles co-operative capital 3 May 2013

Posted by cooperatoby in cooperative, social economy, Social enterprise.
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piggybanksThe ICA’s new Blueprint for a Co-operative Decade analyses the opportunity co-ops now have in terms of two advantages – participation and sustainability – and two constraints – capital and legal frameworks.
It’s very interesting to compare this with the card exercise on problems, solutions and good practices that the Social Entrepreneurship Network (SEN) conducted in Warsaw on 15-16 April. At the time, I was struck by the way the things people identify as problems are largely staying constant over the years. It’s the policy environment that has morphed out of all recognition. In the late 90s large parts of the government apparatus, in Europe and in some Member States ahem, dismissed the idea of social economy. Evidence from EQUAL proved them wrong, and financial crisis and the Social Business Initiative will prove them wronger.
I just want to pull what I think are the key issues the Blueprint identifies on the theme of capital (there are 13 in all):
• “Promoting and encouraging generally the funding of cooperatives by existing members” – interesting how the Phone Co-op cottoned onto this in a way that older consumer co-ops haven’t, by suggesting that members hold a month’s turnover in their share accounts. Think crowdfunding and Community Shares
• “Ensuring that co-operatives have a clear proposition to make to providers of funds” – the components of the triple bottom line can be fleshed out in each case
• “Developing a modern generic financial instrument which is classed as risk capital and meets the needs of co-operative businesses and co-operative funders” – it’s a tricky mix and the Blueprint goes no deeper. The superiority of long-term returns, and returns of multiple types, over making a fast buck may be the conclusive argument, but how to align the incentives with social interest? The tax system would be the obvious way.
• “Identifying institutions which can act as aggregators or intermediaries for businesses (large and small) needing capital” – they don’t mention a market as such, and co-operative banks are already very large, so what more needs to be done?
• “Creating a co-operative specific index to measure growth and performance” – this echoes the work on social impact measurement that has gone under the banners of both SROI and consciously not-SROI
• “Reviewing risks and opportunities created by the use of subsidiary corporate entities, and other group structure arrangements, and the creation of co-operative groups or clusters to address capital accumulation” – social franchising structures of reciprocal membership can be useful here

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