December 2012 eCooperator

Co-op Insights

Pulitzer-Prizewinning Business Reporter Champions Co-ops

Steven Pearlstein, a business and economics columnist for The Washington Post, won a Pulitzer Prize for commentary in 2008 for a series of columns he wrote anticipating and helping explain the global financial crisis. Now, he's thrown his analytical muscle behind an old idea that's gaining new traction: the value of the cooperative business model, particularly in the world of finance. His vision is of a set of institutions owned and controlled by their customers, such as mutual banks and insurance companies, credit unions and various other types of cooperatives.

In his article, "Occupy Wall Street? Just defund it," which appeared in the Post on December 12, 2012, Pearlstein suggests, "If we don't like the rip-out-your-eyeball culture of Wall Street, if we're tired of the inherent conflicts of interest, if we don't want to encourage the excessive leverage and risk-taking and executive compensation, we can take our money elsewhere—to companies that deliver as good or better products and services at the same or lower prices."

Pearlstein notes that mutual banks and credit unions tend to run more efficient operations compared to their stockholder-owned competitors. They also "have fewer loan losses and write-offs and have taken on less risk and less leverage. They charge lower fees for their services and lower interest rates for their loans." At the same time, these institutions lend a greater percentage of their overall portfolio to households and small businesses, while earning high marks for customer service.

The story is much the same for mutual insurance companies, Pearlstein observes. "On average, mutuals have lower expense ratios and return more of each premium dollar to policyholders. They maintain more capital in reserve against losses and have slightly higher credit ratings. They take less risks on their investment portfolios, and as a result earn slightly less of a return. On ratings of overall financial strength, mutuals consistently win out." And again, when it comes to customer service, mutuals lead the pack.

A case in point: Amica, a mutual whose auto insurance routinely earns JD Power's top ranking. Pearlstein also happens to have been a member-customer of Amica for 35 years straight. He calls the firm, "the anti-Wall Street financial services company," because "its business model is based on patient capital, prudent investment and a culture of loyalty and long-term relationships with customers and employees."

Pearlstein's advice to these companies? To begin with, he suggests making a more assertive push to market themselves as a compelling alternative to Wall Street. Pearlstein also invokes the 6th Cooperative Principle ("Cooperation among Cooperatives"), albeit not explicitly, when he recommends these firms pool some of their accumulated capital to "launch cooperatively owned pension funds, mutual funds and private-equity funds to serve themselves and their customers, in effect creating an alternative financial universe with different values and a different culture."

He predicts that the creation of these financial instruments would benefit not only the mutuals and their member-owners, but the market as a whole. Drawing correlations from other industries, Pearlstein suggests that a shift of just 10% of market share could pose a sufficient competitive threat to drive big, traditional financial institutions to offer similar types of products and services. "After that," he says "the process can become rather infectious, changing the way the financial services companies present themselves to the market, keep score and set strategy."

Co-op News

CHS Announces $2 Million Initiative to Foster Co-op University Education

On December 6, 2012, CHS Inc., one of the nation's leading farmer-owned cooperatives, launched the CHS University Initiative on Cooperative Education. This $2 million program represents a major investment in building understanding of the cooperative business model through education, development and practical experience. Partner organizations that will help rollout this program include the Federation of Southern Cooperatives and 10 universities, including Cornell, Kansas State and the University of Wisconsin.

Designed to foster the integration of cooperative education into agribusiness curriculums, cooperative development and farm business studies across the country, the CHS University Initiative on Cooperative Education will also support graduate-level cooperative education programs, soil, water and environmental studies and technology-based learning programs.

According to William Nelson, president, CHS Foundation and vice president, CHS Corporate Citizenship, this program builds on more than 80 years of work with agricultural, cooperative and education entities. "As a farmer-owned cooperative, CHS is committed to investing in the future of the cooperative system," insists Jerry Hasnedl, CHS Board chairman and farmer. "This exciting new initiative will enable the next generation to achieve new levels of success as farmers and ranchers in the global marketplace, as employees with challenging careers in agriculture and as contributing citizens of rural communities."

CHS, a Fortune 100 company, supplies grain, crop nutrients, feed for livestock, food and food ingredients and energy, along with insurance, financial and risk-management services. Some 350,000 farmers and ranchers own CHS either directly or indirectly through more than 1,000 smaller co-ops.

'Baby Cooperatives': a Viable Alternative to Foster Care?

In a recent paper, Michelle Goodwin and Naomi Duke of the University of Minnesota take issue with the conventional view of the US foster care system as the best available (albeit less-than-perfect) option for children in need of homes. Instead, the co-authors propose a wholly "new model of family creation and placement" for foster children in this country, namely Family Civil Union baby cooperatives.

The paper's central hypothesis asserts that "institutionalizing contracts between related adults (by family or friendship) to care for children (child cooperatives) will likely serve as a viable if not best 'family' mechanism to transition children from ward status to permanent home placement."

And make no mistake, the authors’ primary goal is to provide stable, long-term homes for as many as possible of these children. According to the 2011 Adoption and Foster Care Analysis and Reporting System report, almost half a million children in the US currently live in foster homes or orphanages as wards of the state. Only one in five children are adopted from foster care in the US, and as the paper points out, "the life chances of [those left behind] are severely compromised." A disproportionately high percentage of individuals living under state supervision will fail to graduate from high school, while incidences of juvenile delinquency, incarceration and sexual exploitation will soar.

Goodwin and Duke see "legalized child cooperatives or family-based domestic partnerships" as a potentially viable alternative to the "permanent temporary care for abandoned and neglected children" that foster care has become in this country.

Read "Baby Cooperatives: Rethinking the Nature of Families" »

GROWMARK Launches 20th Annual Essay Contest for Young Farmers

The GROWMARK Essay Contest helps young people develop their writing skills, learn about current issues affecting agriculture and understand the unique role of cooperatives. Open to all high school FFA members (formally Future Farmers of America) in Illinois, Iowa and Wisconsin, the contest this year focuses on the theme, "Fighting Domestic and Global Hunger."

Students participating in the 2013 essay contest will be asked to focus on four questions:

  1. What agricultural technologies and practices will increase food production?
  2. How do local agricultural cooperatives help farmers combat domestic and world hunger?
  3. What kinds of partnerships can help fight hunger worldwide?
  4. What can you personally do to impact world hunger?

Prizes will be awarded to both winning essayists (up to $500) and their local FFA chapters (up to $300). Many agricultural teachers have long integrated this annual program into their curriculum. In previous years, participating students have been asked to focus on topics ranging from renewable fuels and biotechnology, to the cooperative principles.

The application deadline for Iowa FFA members is February 15, while entries for Illinois and Wisconsin FFA members are due on March 15. Learn More and Apply »

GROWMARK is a regional cooperative providing agriculture-related products and services, as well as grain marketing, in 45 states and Ontario, Canada.

Co-op Spotlight

Spotlight on HealthPartners, Bloomington, Minnesota

Health PartnersHealth Partners

HealthPartners CEO Mary Brainerd and HealthPartners mascot Petey P. Cup shared fresh vegetables with representatives of Catholic Charities. HealthPartners annually gives out free vegetables to members and patients at clinic locations to encourage healthy eating.

NCBA recognizes innovative cooperatives. Each month, we feature a member who's doing something great in the co-op community. Know a member you'd like to nominate? This email address is being protected from spambots. You need JavaScript enabled to view it.

Tell us about your co-op and its role within the community?

HealthPartners is the largest consumer-governed health care organization in the nation. As an integrated organization, HealthPartners provides care, coverage, research and education to improve the health of our members, patients and community. HealthPartners provides health and dental insurance to more than 1.4 million people, most in Minnesota and Western Wisconsin. We have four hospitals, 12 urgent care centers and 70 medical and dental clinics.

Tell us about a business challenge your co-op has faced and how you responded to that challenge?

Our biggest opportunity is finding a way to meet the Triple Aim of simultaneously improving the health of our patients and the population, creating exceptional experiences for patients and reducing costs. We work on this every day and have made strides toward reducing the rate that health care costs increase. One project we’re very proud of is virtuwell, a 24/7 online clinic in which customers can get care for more than 40 common conditions and a prescription if necessary from their home or office. Instead of going to a clinic or urgent care, they get care without waiting, from a location that’s convenient to them and for $40 or less.

What advice would you give a new co-op?

Engage your members every step of the way from the very beginning. Your members are your solution, your advocates and your biggest ambassadors. Many successful co-ops, regardless of the industry they are in, have member engagement in common. In addition, it is important to engage other co-ops and share skills with other co-ops, something we are currently doing in Iowa and Nebraska with CoOportunity Health and in Uganda through a USAID grant.

To learn more about HealthPartners and its role as a co-op, contact senior vice president This email address is being protected from spambots. You need JavaScript enabled to view it.

Learn more »

Upcoming Events

1.25-26 Austin Cooperative Summit

This small meeting format facilitates the exchange of best practices and cross-sector learning among cooperators in the local community surrounding Austin, Texas. More »

1.27 Reward Volunteers 2.0 Grand Prize Announced

Concludes Round 2 of the nation's first mobile and web app that allows volunteers to log hours, post to Facebook and win rewards for themselves and the organizations they serve. More »

1.28-29 California Screenings of New Shift Change Documentary

The documentary Shift Change, explores the successes of worker-owned firms in the US and in Spain and the promise they offer for a better life. In January, screenings will be held in California, in Sonoma (1/28) and Point Reyes Station (1/29). To schedule a screening in your area, contact the filmmakers. More »

In the Community

Job Opening: Northern California Regional Manager
CoFED, California

The Regional Organizer (RO) supports and connects cooperatively-run food projects throughout their region. ROs are primarily responsible for cultivating relationships with students and student teams and for co-facilitating their progress towards... More »

NCBA New Member: Good Tern Natural Foods Co-op & Café

Good Tern Natural Foods Co-op & Café has provided quality whole foods in Rockland, Maine for over thirty years. The Good Tern is owned and controlled equally by the people who use its services and those who work there. More »

NCBA New Member: Mega Foods, Marts and Fuels

Mega Foods, Marts and Fuels one of the nation's largest retail food cooperatives, boasts over 35,000 members. The Consumers Cooperative Association, operating as Mega Foods and Mega Convenience Stores in the Chippewa Valley of Wisconsin, continues to prosper after 75 years, returning over $5 million to members in the last 15 years alone. More »

NCBA New Member: Electronic Transaction Systems Corporation

Electronic Transaction Systems Corporation (ETS), a recognized leader in the merchant processing and ATM driving fields, is headquartered in Sterling, Virginia, with satellite offices in Vaughan, Canada and Kerry, Ireland. ETS develops state-of-the-art products to service and enable all merchants with the most comprehensive processing solutions in the industry. More »

NCBA New Member: PCC Natural Markets

PCC Natural Markets began as a food-buying club of 15 families in 1953. Today, it’s the largest consumer-owned natural food retail cooperative in the US. PCC has nine stores in the Puget Sound region and is owned by nearly 45,000 members. More »

NCBA New Member: Fund for Democratic Committees (F4DC)

Fund for Democratic Committees (F4DC), founded in 2007, has made over $260,000 in grants to support grassroots organizing efforts, primarily focused in the Southeast, North Carolina and Greensboro. F4DC operates with a strong belief in the power of ordinary people in neighborhoods, workplaces and other communities to understand and solve their own problems when given an opportunity to put their heads together and hear the diverse voices of all involved. More »







Tue May 22 22:28:05 +0000 2018

How are finances and nutrition connected? Pretty closely. USAID - US Agency for International Development USAID Gu…
Tue May 22 21:51:02 +0000 2018

New paper from @icacoop focusses on #Cooperatives and Future of Work was released around #MayDay - the internationa…
Tue May 22 16:25:03 +0000 2018

How are finances and #nutrition connected? Pretty closely - read on to see how joining a group savings and loans gr…



This email address is being protected from spambots. You need JavaScript enabled to view it.


1775 Eye Street NW
8th Floor
Washington, DC 20006