Shared Equity Models: A New Look at Community Development

NACEDA intern Barbara Anne Kozee outlines the place for worker cooperatives and sustainable local economies in the future of economic development.

August 9, 2016

I come to the community development field with academic experience in economics, inequality, and development, and extracurricular experience engaging with the labor movement and specifically with organizing campaigns for worker justice on Georgetown University’s campus. Through this experience as well as my time interning with NACEDA, I have become familiar with the all too common challenges of those living in low-income communities. Failing schools, expensive or inadequate housing, unemployment, poor health, just to name a few. For both a small, neighborhood-focused nonprofit organization as well as a bright-eyed, soon-to-be-graduated college student concentrated in economic justice, tackling all these challenges at once can seem overwhelming.

Perhaps the biggest frustration that I have encountered in my experience so far has been reconciling the perceived dichotomy between theory and practice, between systemic change and daily subsistence. I have seen the short-term resource needs of different organizations create competition and distract these organizations from focusing on the root causes of poverty and inequality in a given neighborhood.

However, this polarization of the short-term with the long-term does not have to exist. On an alternative spring break trip that I attended a few years ago focused on worker justice in the DC area, I was introduced to the concept of worker cooperatives and the idea of broadly shared capital. Through my internship at NACEDA, I have seen how worker cooperatives can fit into a community development model that reconciles immediate relief with systemic change. I feel strongly that encouraging community development organizations to adapt more shared equity strategies can have better outcomes for the community, while preserving the capacity and strengths of the neighborhood organization. And I am not alone. An increasing number of organizations are turning to shared equity community development as a unique and promising strategy that could cut across the wide variety of issues needing to be addressed.

The Democracy Collaborative
Shared equity models stress collaboration between local actors. The Democracy Collaborative (a non-profit organization founded in 2000 providing research, advisory services, and wealth building activities in the community development field) refers to this type of collective development as community wealth-building, in which community actors work together by using their assets to create equitably distributed income and opportunity for all residents. Instead of competing for resources, the organization aptly emphasizes a collaboration of resources.

Worker cooperatives are a well-known, employee-owned business model built upon the principles of equity, democracy, and solidarity. They benefit employees by distributing profit equally among members and offering support services, such as job trainings and home buyer support. At first glance, worker cooperatives seem to approach economic justice from a different perspective than traditional aspects of community development. While certainly nontraditional in nature, worker cooperatives support community development by combating the resource challenge through the creation of resources and by aiming for systemic change with the idea of broadly-shared profit.

Evergreen Cooperative Cleveland The Evergreen Cooperatives in Cleveland, Ohio, is a familiar cooperative model to many community developers. The Cooperatives are an important example of how community partners can work together to build community wealth. Known as the Cleveland Model, the Evergreen Cooperatives are currently a group of three worker cooperatives focused on providing the community with energy solutions, fresh produce, and laundry—all at the local level. In Cleveland, half of the city’s children live below the poverty line. To combat this striking statistic, the worker cooperatives partner with local institutions and nonprofits to redistribute wealth and opportunity through local purchasing and hiring. In short, the model tries to keep resources generated by the model in the community. Cleveland is known for its world class hospitals and universities—two economic powerhouses. By providing goods and services that these institutions need, the worker cooperatives create a sustainable model for community development. Non-profit lenders add to the cooperatives’ success by providing technical assistance and a revolving loan fund that both the city and the cooperatives pay into. Worker cooperatives emphasize a devotion to place. Both jobs and profit are retained in the community. With a greater income, community members are able both to afford homes and to reinvest in the local economy.

The Cleveland Model shows the interconnected nature of community development and the power of the worker cooperative model’s broadly-shared wealth. Beyond Cleveland, the shared equity model is also taking off on the Pine Ridge reservation in South Dakota as a culturally relevant strategy for rebuilding a struggling economy.

Solar Panels On the Pine Ridge Reservation in South Dakota, 48% of residents live below the poverty line, and 80% are unemployed. Thunder Valley CDC is working with the Oglala Lakota people of the Pine Ridge reservation to create a sustainable, local economy in which wealth is shared by the community. Tribe members participated in the Learning/Action Lab for Community Wealth Building. Through the lab, they learned tools and strategies for implementing a shared equity model in which wealth is both locally and broadly owned, bringing back these ideals that historically created strong, sustainable economies for the Oglala Lakota people. In line with that model, Thunder Valley CDC is currently building durable, affordable homes with solar panels and creating native-owned enterprises that can transition to an employee-owned model one day. Community leaders are visiting native-owned businesses as well as the Evergreen and other cooperatives to see how these successful shared equity models can create change. Although in the early stages of development, the shared equity model is creating real and promising change on Native American reservations in the northwest. And most importantly, the culture of community-owned wealth is familiar and accessible to the Oglala Lakota people.

Thunder Valley CDCToday, building community means building solidarity and fighting for change at both the community and systemic level. This is the heart of the shared equity model. To me, the importance is that, instead of juxtaposing the short-term and the long-term, shared equity models view the two as inherently connected. We cannot theorize new economic models without taking into account the immediate problems of communities, and we cannot work at a community level without acknowledging problems at the roots of our systems. The two are cyclical in nature, constantly in contact and collaboration. I see the work of the Democracy Collaborative, Thunder Valley CDC and Evergreen Cooperatives as having successfully created a community economic development model that both serves the community and begins to address systemic inequality. More community development corporations should take heed of the work being done by these communities and organizations that emphasize the importance of broadly owned, community-focused wealth.

A special thanks to Sarah McKinley, Manager of Community Development Programs at the Democracy Collaborative, for providing information for this blog post.

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