BOARD TRAINING AND MEMBER EDUCATION:
A Learning and Training Toolkit for Understanding Worker Cooperative Finances
Newly Revised and Available in Spanish
December 2018
This learning and training toolkit has been developed for member education and board training
about basic worker cooperative finance. It consists of a document and a set
of linked spreadsheets that allow users to explore the relationship between
the primary financial statements that are used for business reporting and
decision-making.
The document describes a simplified, fictional worker-owned cafe and
coffee shop, and the business assumptions that drive the financial reports
in the spreadsheets. Users can easily change spreadsheet assumptions about
business conditions, or financial decisions by the board or management, and
see the effects of these changes flow through to the financial statements.
The document also presents several scenarios in which the worker
cooperative must decide whether to proceed with an expansion, how to finance
it, and whether to change its salary structure. The spreadsheets allow the
user to test out different assumptions and approaches, and see the financial
effects of these decisions.
DOWNLOAD THE EXCEL SPREADSHEET AND PDF DOCUMENT HERE:
English Version
Spanish
Version
This learning and training toolkit will continue to be a work-in-progress. Please contact us with
questions or suggestions at
info@uwcc.wisc.edu.
2018 Revision supported by a grant from The
Cooperative Foundation.
Additional Resources on Worker Cooperatives
The learning and training toolkit on this webpage uses general cooperative terms such as
allocated equity and patronage refunds in describing the illustrated
financial practices. However, there are a variety of ways to organize and
describe a worker cooperative and its financial structure. Worker
cooperatives may manage retained allocated equity through internal capital
accounts, and may have distinctive interpretations and expectations around
these practices. Other resources about worker cooperatives can be
found
at:
U.S. Federation of Worker
Cooperatives
The ICA Group
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About Cooperative Finance
A cooperative's primary value to its members is its ability to deliver
the goods or services needed by its members. These benefits of
membership are accompanied by the responsibility of financial participation
in the cooperative. Like any other business, a cooperative requires
reserves for financial stability, and resources for reinvestment so it can
continue to meet the needs of its members. Members, as owners of the
cooperative business, can help meet these capital needs in a variety of
ways.
In the case of worker cooperatives, worker members use the cooperative to meet
their needs for good jobs and benefits through
the democratic control of their business. Worker members function as
both workers and business owners, and have different interests
associated with each role:
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Member interests include well-paying jobs, benefits, and working conditions.
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As business owners, the worker member interest is in the
financial health of the business, and its profitability. Members invest in
the cooperative through the purchase of initial membership shares. These
shares establish ownership and a right to a share of the profits based
worker "patronage" -- in the case of worker cooperatives, a combination of
labor, skill, and seniority. Member owners reinvest in the cooperative by
allowing the cooperative to retain a portion of the patronage "refund".
These two sets of interests sometimes conflict. As cooperative members,
worker members participate in strategic decision-making that equitably
manages the tradeoffs between worker and owner interests, either directly
or through a democratically elected board of directors.
Additional Resources on Basic Cooperative Finance
Cooperatives in Wisconsin (see pages 7-9)
Cooperative Equity and Ownership: An Introduction
UW Center for Cooperatives website:
Finance