(2009-12-30) Cleveland Coops

Several nonprofit and medical institutions in Cleveland Oh have turned to the Mondragon Cooperatives model for a consortium of businesses that will provide needed services and bolster an impoverished community. (Details from Evergreen Cooperatives.) One hallmark of the Mondragon model is its use of capital. Rather than flowing into the pockets of executives and outside investors, a company's profits are distributed in a precise, democratic way; set aside as seed money for new cooperatives; distributed to regional nonprofits; or pooled into shared institutions like the university and research center. In other words, each individual cooperative gains long-term benefits from the financial assets of the whole. (How this would play out in the context of U.S. tax rules remains to be seen.) In Cleveland, the Evergreen Cooperative Development Fund, managed by Shore Bank Enterprise Cleveland, provides low-interest, long-term financing. In the future, a financial institution more aligned with Caja Laboral (Mutual Bank), which also handles consumer saving and lending, might be developed.

In late October, the Mondragon Cooperatives and the million-plus-member UnitedSteelworkers (USW) Labor Union announced an alliance to develop Mondragon-type manufacturing cooperatives in the U.S. and Canada. Says USW's Rob Witherell: "Initially we are looking to convert an existing manufacturing operation." As for financing new ventures, he adds, "There's a significant amount of infrastructure already in place in the U.S. to assist in the development of cooperatives, such as the National Cooperative Bank and the National Cooperative Business Association.