Raising Capital for Worker Cooperatives | Grassroots Economic Organizing
At the National Conference of Democratic Workplaces, two workshops focused on the challenges of raising capital for worker cooperatives. The first workshop presented a series of case studies of innovative strategies for raising capital. In the second workshop “Building Community Wealth,” lenders and foundations with a track record of investing in worker cooperatives described their mission.
Saru Jayaraman, co-founder and executive director of the Restaurant Opportunities Center of New York (ROC-NY) described the odyssey of raising money to found the cooperative restaurant, COLORS. COLORS was the dream of a group of employees of the former Windows on the World restaurant which had been at the top of the World Trade Center. At first, the workers hoped to get some of the money contributed by people all over the country that poured into lower Manhattan following the 9/11 incident. More than $2 billion dollars was sent by people to New York to help in the aftermath of the attacks, according to the Sept. 18, 2005 Pittsburgh Post Gazette. However, the Lower Manhattan Development Corporation did not come through. The workers resorted to aggressive activist tactics including protesting during a board meeting, yet none of the money was forthcoming.
Not to be deterred, over the next several years COLORS painstakingly pieced together $2.2 million from small lenders and foundations. A major breakthrough occurred when COLORS secured a groundbreaking $500,000 loan from a co-op in the Legaco-op network in the Emilia-Romagna region of Italy. Legacoop is a network of 8,000 consumer, farmer and worker cooperatives which produces everything from fashion to specialty cheeses. Each co-op returns 3% of profits to a national fund for cooperative development.
It takes several years for a new restaurant in NYC to start generating profits and COLORS’ fund raising is ongoing. Saru pointed out that co-ops with members who are primarily people of color face a double hurdle–overcoming capitalist financial institutions’ hesitancy to lend not only to co-ops but also to non-white people.