All Together Now--the ‘90s Co-ops : Community: An idea from the ‘60s melds with today’s business savvy to find its niche in the post-’Me’ decade.
The menu was tofu and sprouts, the dress jeans and Birkenstocks, but the talk was all business.
Should the store accept credit cards? Is $15,000 too much to pay for an exterior remodeling? How should employees deal with panhandlers and shoplifters? Are the customers happy? Are the lawyers?
Welcome to cooperatives 1990s-style. Except for the casual dress and the cramped space, the monthly board meeting of the Ocean Beach People’s Natural Food Store could have been almost any business gathering. Cooperatives--member-owned businesses--have come a long way since their heyday in the 1960s, when they shared a vision of social change as well as sharing in the profits.
Then the rallying cry was “people before profits.”
Today the motto is just as likely to be “people and profits.” By successfully mixing 1960s philosophy with 1990s business savvy, many cooperative-style businesses have weathered the profound social changes of the past 25 years. “The vestiges of hippie-ishness have gone by the wayside. We’re not working shirtless, and not everyone who comes in the door gets a hug anymore. We’ve just blended that with a business-like approach,” said Joe Sheridan, general manager of the Ocean Beach store, which was employee-owned when it began in 1972 and in 1985 became a full-fledged cooperative.
Last year, the store did $3.6 million in sales. After operating costs, that still wasn’t enough to return profits to the store’s nearly 7,000 members, but the figures are strong for a natural foods store, says Sheridan.
Cooperatives encompass everything from preschools to mobile home parks to food stores to funeral societies to financial institutions. Some are for profit, though most are nonprofit. But they all have one thing in common; members own and control the business. Many members say a cooperative, with its one-member one-vote structure is one of the best examples of democracy in action in the United States.
“I think cooperative members truly believe in democracy as a form that can work in business as well as government,” says Leon Garoyan, director of the University of California’s Center for Cooperatives, based in Davis. The university center is just one example of the sophisticated national network of resources that support cooperatives. It conducts research, offers workshops and tracks cooperatives in every sector, from housing to health-care to funeral societies. It also publishes a comprehensive directory of all California cooperatives.
Financing for many cooperatives comes from the National Cooperative Bank in Washington.
Another resource is the National Cooperative Business Assn. in Washington. The group estimates that there are 45,000 cooperatives in the United States, with 100 million members. (Sixty million of those belong to credit unions.)
Although the number of cooperatives has fallen in the past two decades, the number of members has risen, suggesting a consolidation of groups. Paul Hazen, the association’s vice president for government relations, said the cooperative model is used throughout the world, especially in Europe. In this country, he sees cooperatives branching into health care organizations and low-income, tenant-owned housing as a way of saving money and giving people more control over their lives.
“A cooperative is a business with a social content,” Hazen says. “In many communities, cooperatives are a very positive force, a tool for community change and development.”
One example is the Ocean Beach coop’s bulletin board, which has become a barometer for the changes in the off-beat beach community. It’s also a neighborhood voice. People meet roommates, air political gripes, reveal nutritional, spiritual and financial tips. Usually there’s lots of advice on how the store can do better.
Locally, several longtime cooperatives thrive because they have adjusted to deep social changes of the past two decades. Sandy Hill Nursery was started by parents in 1966. The nonprofit preschool, perched on the side of an undeveloped wild and rustic hill overlooking Solana Beach, offers 60 children, ages 2 to 6, the chance to “explore life with gentle guidance,” as the dreamily written brochure puts it. It also offers the chance for parents to work alongside teachers in classrooms and to make decisions in the education of their children.
But both teachers and parents struggle with some not-so-gentle realities. There are the parents who want homework for 3-year-olds. There are the teachers who couldn’t adjust to the idea of being equals with parents. There are the working parents who have less and less time to work in the classroom.
“Being part of a cooperative school requires a lot of time and energy. It’s not just parents dropping off their kids and letting teachers do the job,” said director Jackie Tonnaer.
At both Sandy Hill and another longtime nonprofit cooperative, the Unitarian Cooperative Preschool in Hillcrest, parents are expected to do much of the work. They share in teaching, serve on the all-parent board, raise funds, scrub floors and hammer nails during cleanup days.
“Sometimes the learning process of what is a cooperative takes people sixth months to a year,” says Patty Eschleman, director of the Unitarian preschool, founded in 1965.
Even so, at both preschools there is a yearlong waiting list. The cooperatives are in such demand, not because they’re less expensive than other preschools (they’re not), but because some parents jump at the chance to work alongside teachers as equals. They also want to be more directly involved in their children’s early education.
Cooperatives have long been misunderstood. First, most co-ops are not counterculture; in California more than 200 agricultural marketing cooperatives have an annual net volume of about $5 billion. These co-ops conduct one-third of the marketing of farm products in the state and serve as powerful lobbying groups for growers’ interests. And cooperative groups have a long history. According to Hazen, the first cooperative was an insurance company, founded by Benjamin Franklin in the 1650s in Philadelphia.
The first big wave of cooperative business growth came in the 1920s and 30s, during the Depression, when farmers formed large agricultural cooperatives to ensure better markets for their crops.
Credit unions are one of the most successful types of cooperatively run businesses. The first credit union opened in New Hampshire in 1909, but it wasn’t until the federal Credit Union Act passed in 1934 that an explosion of the member-owned banks developed. Today nearly 63 million people belong to credit unions, which have total assets of $242 billion. “At a bank you’re a customer. At a credit union you’re a member. . . . We believe credit unions are a financial alternative,” said Lucy Harr, spokeswoman for the Credit Union National Assn. The group, with headquarters in Madison, Wis., represents 13,896 credit unions, 90% of the total nationwide.
The San Diego Memorial Society is a cooperative that offers its 12,000 members low-cost funeral services. Founded in 1958, the local group is one of 14 California memorial society cooperatives. Members pay a one-time $20 fee to join and vote for the society’s board of directors. The group works exclusively with Humphrey Mortuary in Chula Vista, which ensures that members get a lower-cost funeral and helps families plan in advance.
“We are a great help to consumers,” says Ruth Porte, the society’s director and only paid member.
Shoppers at Recreational Equipment Inc., or REI, in North Park may not realize that they are buying at the nation’s most successful consumer cooperative, but the Seattle-based chain, founded in 1938, has 32 outdoors equipment stores literally owned by its more than one million members. In 1991, those members received $15.3 million in the form of what REI calls “patronage dividends.”
Anyone can join this cooperative; all it takes is a $10 fee. Dividends are based on the amount a member buys. Last year, for every $100 a member spent, REI returned $10. Members also vote for the company’s board of directors.
“We work really hard on getting people to become members. . .to share the benefits of the cooperative and become loyal customers,” says Michael Collins, company spokesman in Seattle.
On a smaller scale, San Diego has several dozen neighborhood baby-sitting cooperatives and food buying clubs. In the former, parents exchange baby-sitting hours to save money and make sure their children are in responsible hands. Food buying clubs offer families a chance to buy in bulk, mostly from natural foods warehouses. These small co-ops are both economic and social.
“Our cooperative is about more than just groceries. It’s a breeding point for sharing and for new ideas between members,” says Marianne Hornlein, who started a food cooperative a year ago. The group, GoodFood Co-op, based in Lemon Grove, now has a dozen families who buy bulk organically grown food and produce twice a month from a natural foods warehouse in northern California.
San Diego lacks any form of cooperative housing--notably limited equity housing in which tenants of low-income developments own their own units. (The other type of cooperative housing is market-rate cooperatives, in which a luxury apartment building is owned by a cooperative of tenants, who are able to choose who lives there or not.) “Housing cooperatives are common on the East Coast (but) here people are unfamiliar with them . . . and in the public sector there is still a tendency to build low-income housing and keep control of it,” said Ken Grimes, a senior policy analyst with the San Diego Housing Commission.
Times have changed and so have cooperatives. For some, the price in work hours and responsibility is too high. It’s not an easy system for a business to be responsible to all its members--whether 35 or 3,500. Decisions take a lot longer than in a one-owner operation. And, members say, working with so many opinions and personalities can be a struggle.
And, many people raised in a society that thrives on competition do not understand the cooperative philosophy.
“Most cooperatives came about in the 1960s, and now we’re dealing with people who weren’t even born during the 1960s. . .They grew up during the ‘me’ generation where it’s ‘I’m doing this for me’ and you just can’t explain a cooperative to them,” said potter Lynn Wolsey, a member of Many Hands Crafts Gallery for nearly 20 years.
The downtown gallery, on G Street, marks its 20th anniversary this year. About 35 artists display their work in the gallery in exchange for a monthly fee and 17 hours a month working in the store. Members bring their concerns to monthly board meetings where everyone has a say--and a vote. Cooperative members everywhere may complain about the hardships, but they are quick to extol the virtues of being an owner and not just a consumer.
“There’s a great sense of community. We belong to this community not to enrich our pockets, but our lives. That’s something I’ve never experienced before,” said Kathy Adams, whose two sons have attended Sandy Hill, where she also serves as president of the board.
This sense of belonging, say members, is especially valuable in the 1990s, when financial and career pressures cut into family life. There seems less time to build support systems, to nurture family and neighborhood, to preserve rituals and traditions--and cooperatives are one way to belong. This same sense of belonging also engenders fierce loyalty. When officials at the University of San Diego attempted to close the General Store food cooperative in January, several hundred students broke windows and forced their way inside. Several days later, more than 500 students showed their support for UCSD’s five student-run cooperatives at a rally.
“We’re the only thing left with the capability of standing up for student rights on this campus,” said Andy Howard, who helps run the campus United Cooperative Association.
The association was formed last year in response to continuing struggles between the administration and students over the running of the campus co-ops. A court restraining order now prevents UCSD officials from closing the cooperatives.
Like many students involved in the university’s cooperatives, Howard sees them as a voice for social change:
“Cooperatives provide people with an education in how to work in a democratic organization and how to deal with group skills. Where else do you get group skills in a competitive society?”
