Investing Part 4 – Cooperative Fund of New England

October 28, 2019

By CAROLYN EDSELL-VETTER, Cooperative Business Support Officer; Cooperative Fund of New England Boston, MA.

Money is pretty amazing. By assigning symbolic value to currency, we can participate in undertakings to which we might not have the time or skills to contribute directly. But with that power comes the responsibility to know where our money comes from, and what activities that money is supporting. In the Sermon on the Mount, Jesus admonishes his disciples, “Where your treasure is, there your heart will be also.”[1]How we allocate our money — whether earned or inherited — says a lot about our real priorities and values. We all (I hope!) form a personal relationship with the charities to which we donate, or at least check Guidestar to get a sense of their impact and expenses. But charity is not the only way that we are called to participate financially in bringing about a better world. 

Created in the divine image, we are called to be co-creators, to imitate God in diverse ways. God instructs the Israelites, “You shall be holy, for I the Lord your God am holy….” and enumerates a social code that includes paying workers their wages promptly, treating immigrants as equals, avoiding creating obstacles for blind people, and the “Golden Rule” to love our neighbor as ourself.[2]In a modern context, we read this to mean that we are to be just in our business dealings, to avoid creating harm or encouraging others to act unethically, and to build an equitable society that responds to and attempts to repair historical oppression.

In addition to charity and honesty in business dealings, the Bible teaches us that some of our assets should go toward supporting our community members in having dignified livelihoods. In the passage from Leviticus cited above, the Israelites are instructed to leave the corners of their fields so that the poor and the sojourner can glean for themselves.[3]From this, we learn that it is not enough to alleviate hunger by feeding the poor; instead we are called to recognize the personhood of marginalized people and create opportunities for self-efficacy.

One way to invest in self-determination for people and communities left behind by an extractive economy is through investment in cooperative businesses. Democratically owned and managed enterprises are proving to be a valuable tool for creating a more just and equitable society. In New England, employee-owned businesses are addressing the racial wealth gap as people of color and immigrants build equity and make decisions in the businesses where they work. Resident-owned housing communities are stabilizing rents and improving living conditions by taking land out of speculation and returning it to resident control. Cooperative food systems are growing healthy food for local markets, while reducing carbon emissions and alleviating food deserts.

Since 1975, the Cooperative Fund of New England(CFNE) has provided over $60 million in crucial, affordable financing to cooperatives across New England. These funds have created and retained thousands of jobs and housing units, while leveraging relationships to strengthen the ecosystem surrounding worker- and community-ownership in low-income, immigrant, and minority communities. 

For instance, when young people in Worcester envisioned starting an alternative transportation service based in electric and pedal-power, they were challenged to find financing without sufficient collateral or personal guarantees. A low-interest loan from the Cooperative Fund of New England, secured in part through CFNE’s Collateral Support Fund, allowed WooRides worker-owners to purchase the needed equipment for their start-up to grow beyond their original pedicabs. WooRides now provides reliable van transportation for local senior centers, schools, and businesses, while providing year-round jobs.

Start-ups are not the only cooperatives challenged to access conventional financing. As Baby Boomer employers begin to retire, often without a plan as to what will happen to their businesses, employee buy-outs provide a valuable alternative to job losses from business closures. A Yard & A Half Landscaping Cooperativewas formed in 2013 by a group of mostly Central American workers. A loan and working capital line of credit from CFNE allowed them to purchase a 25-year old landscaping business from their retiring boss. In the first five years in operation as a worker-owned business, wages grew by 44% (compared to the national average of 14.7% over the same period). At the same time, the co-op paid off its loan and reinvested nearly $.25M in growing the business — member equity which will be returned to each individual worker-owner when they leave the co-op.

As the only financial institution dedicated to growing the region’s cooperative economy, CFNE fills an important niche in access to capital. We rely on community support to make this happen. The majority of our loan pool comes from individual investors, large and small, as well as community and religious organizations. We invite you to join us from 7-9pm on November 6th to learn more about how you can support community-owned businesses and housing to build a more inclusive and just economy in our region. Come to the panel discussion at Church of the Covenant and listen, share and be part of this important discussion. Click here for more details.

[1]Matt. 6:19-20

[2]Lev. 19:2 ff.

[3]Lev. 19:9-10


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