EVERGREEN COOPERATIVE DEVELOPMENT FUND

Managed by ShoreBank Enterprise Group, Cleveland (SEC), the mission of the Evergreen Cooperative Development Fund (the Fund) is to provide low-interest, long-term financing through a dedicated community development revolving loan fund to improve the neighborhoods of Greater University Circle by investing in the start-up of enterprises serving the needs of anchor institutions, and creating wealth for the Greater University Circle residents who work in these enterprises.

The Fund is designed to play a role somewhat similar to the Caja Laboral, the central financial institution of the Mondragon cooperatives in the Basque Region of Spain.  The Mondragon co-ops have grown from a single co-op with a handful of members in 1956 to more than a 110 industrial, financial, and retail cooperatives employing more than 100,000 co-op members today.  The umbrella organization, the Mondragon Cooperative Corporation, is the 4th largest industrial and 7th largest financial group in Spain.  Its story is a remarkable half-century saga of self-help growth and development by an ethnic minority systematically excluded by the central government and Spanish economic society.

Central to the Fund’s model is the idea that truly sustainable community economic development requires more than the creation of affordable housing and jobs. It requires the generation of wealth that is earned and held in the community. The Fund operates proactively to identify new lines of business to meet these ends.  The Fund does this through a deliberative process that involves assessing financial feasibility, developing a business plan, raising capital to ensure adequate capitalization, recruiting capable management, helping establish contracts, monitoring success, and providing the technical assistance necessary to buttress the profitability of these enterprises.

In keeping with the wealth building goals of the Fund, the Fund also works to ensure the availability of “wrap around services” so that neighborhood residents may become effective employees and organizes the businesses to have an ownership structure that makes employees into employee-owners, who not only have the ability to earn a living wage, but also the chance to build wealth and assets as part-owners of the companies where they work.

The Fund makes maximum use of New Markets and other tax credits and available low-cost funding. The Fund also seeks investment from anchor institutions, foundations, government programs, and individuals in the form of grants, social responsible investment, and program related investment (PRI) funds. 

The employee-owned companies created through the Fund’s investments will themselves become investors. Indeed, one condition of accepting investment capital from the Fund is that, when cash flow permits, the recipient employee-owned companies will be contractually bound to dedicate at least 10% of their profits to seeding new investments by becoming co-investors in the Fund. SEC envisions the Fund to be $10,000,000 to $15,000,000 in asset size. At any point in time, 60-80% will be deployed in portfolio investments. The average investment will depend on the type of business. Fully deployed, the Fund expects to create 350 to 500 new jobs, resulting in employee holdings of $25,000,000 to $30,000,000. 

Please take some time to visit the three Evergreen Cooperative Development Fund financed companies: Evergreen Cooperative Laundry, Ohio Cooperative Solar, and Green City Growers.