CO-OP DEVELOPMENT ACTION
Nurturing Caregiver Co-ops
NCDF helps finance critical need for in-home rural healthcare services
merging and mature coops
have proven invaluable
for creating and
retaining good jobs. Both
can serve as powerful
tools to leverage opportunities in tough
times and tight industries. Across the
country, the cooperative development
centers of the Cooperation Works! network
are helping working men and
women start new cooperative businesses
and reshape existing ones, including
worker-owned healthcare provider
cooperatives.
Northcountry Cooperative
Development Fund (NCDF), founded
in 1978 in Minneapolis, issues loans to
producer, worker and consumer cooperatives
in 11 states of the Upper
Midwest. NCDF also provides technical
assistance, training and advisory services,
and is a member of Cooperation
Works!
One of NCDF’s recent loan disbursements
was to the Circle of Care
Cooperative, a home healthcare worker-owned cooperative based in
Wisconsin. In addition to the $205,000
loan that enabled it to open for business,
NCDF staff also assisted with the
co-op's business plan.
Home healthcare is a low-profile
industry, says NCDF Executive
Director Margaret Lund, but its potential
is sky-high as institutional care costs
rise and the population ages. The caregiver
co-ops are creating new jobs and
making existing ones better. They offer
workers' compensation to people who
often do a lot of heavy lifting and provide
trusted back-up when a caregiver
needs someone to step in.
Co-op members form support networks
to help one another deal with the
challenges of doing some of society's
most important work, work that is too
often undervalued. Lund also notes
that, as member-owners, "the co-op
provides leadership opportunities for
these women. The also clients have
much more continuity of care because
that's what really matters to the caregivers.
So, when they run the agency,
that's naturally a priority."
Homecare co-op rises to challenge
A major contract fell through just as
Circle of Care was getting ready to
open for business, forcing members to
rethink their business strategy in a
hurry. They had the help of NCDF
staff, which “rolled with the punches”
and helped seek a solution.
NCDF also
offered collective experience,
intelligence and
a positive attitude for
dealing with the situation.
The co-op was also
assisted by Margaret
Bau, cooperative
development specialist
with USDA Rural
Development in
Wisconsin and nationally
recognized proponent
for, and organizer
of, rural worker-owned
homecare cooperatives.
Like others, she
recognizes that the
already huge need for
home-based care will
only grow, and caregiver
co-ops offer a low-equity way to
increase and improve services. She and
others are looking for ways to overcome
obstacles to starting such co-ops.
Challenged industry
"Until recently, I believed that in
order to organize a homecare worker
co-op, you would need a major contract
with a public body (e.g., county or
state) and a good relationship with a
benevolent public agency," Bau says.
Such co-ops have proven successful in
urban settings for many years, such as
Cooperative Home Care Associates,
based in New York's Bronx, and Home
Care Associates in Philadelphia.
But the upheaval at the Circle of
Care forced members to overhaul the
business plan and offer their services to
private-pay clients, who are more affluent
than the elderly and disabled people
covered by Medicare and Medicaid.
Bau explains, "This is an experiment
that offers interesting opportunities to
the rest of the country. Remember that
50 or 100 years ago, farmer co-op
members were not getting advanced
degrees and running multimillion-dollar
operations. Homecare co-ops are just
getting started, and they could use the
same kind of help the farmer co-ops
received.
"Breaking into the private pay market
will require a significant marketing
plan," Bau continues. "This means a
larger initial loan. It also means the coop
probably won't be profitable for two
to three years, more like a conventional
business start-up. But unlike most businesses,
this is a service industry of mostly
low-income women, so there isn't
much collateral."
Co-op advantages
Homecare worker co-ops do have
some significant market advantages.
Because they don’t have to turn profits
for investors or pay franchise fees, they
can offer workers higher wages, benefits
and patronage refunds.
"In the case of the Circle of Care
Cooperative," Bau says, "experienced
caregivers are coming out of the woodwork
to become members." They are
drawn by wages $2 to $4 per hour higher
than local agencies offer, plus health
insurance, mileage reimbursements and
patronage refunds.
Meanwhile, at five-year-old
Cooperative Care in Wautoma, Wis.,
members have initiated a mentoring
program, a self-evaluation process and
an ongoing exploration of what it
means to be an owner of the business,
which serves public-pay clients.
"What I find most telling about
them," observes Bau, "is the number of
two-generation memberships they have
—there are at least six now. Mothers are
encouraging their adult sons and
daughters to become member-owners!"
Guide to go on Web
The Cooperative Development
Foundation in Washington, D.C.,
recently awarded a $27,800 grant to the
regional community action agency,
which fostered the development of both
caregiver co-ops. A guide of "lessons
learned" by the pioneers in rural homecare
cooperatives is to be published on
the Web.
The guide will pay special attention
to replicable aspects of development
and those policies each co-ops needs to
create "from scratch." A collection of
resources will be made available on the
University of Wisconsin's Center for
Cooperatives Web site:
www.wisc.edu/uwcc early in 2007.
Mississippi produce co-op supplying casino
Most of Indian Springs Farmers
Association market outlets were temporarily
shut down in the wake of the
2005 hurricane season. This included a
big offshore Gulf Coast gambling casino
that had been one of the co-op's most
promising customers. But the business
lobby rallied to pass legislation to allow
onshore gambling, and by May the casino
was rebuilt on land and back in operation.
Not long after, the two parties
signed a memorandum in which the
casino agreed that if Indian Springs produced
a food on the casino's grocery
list, the casino would buy all that the coop
could supply of the item.
Indian Springs is one of four cooperatives
currently on a fast track for technical
assistance from the Mississippi
Center for Cooperative Development.
Center staff is helping the co-ops concentrate
on three niche markets: casinos,
schools and farmers markets. Projected
outcomes are stated in a strategic plan the co-ops
created with the help of the center's advisory board and
the elected board of its parent organization,
the Mississippi Association of
Cooperatives (MAC).
Goals include having all four co-ops
combined hit $1 million in sales by 2011,
and for at least one of them to reach the
$1 million mark by 2013.
Members see the value in linking to a
larger member base, such as MAC, says
Melbah Smith, the center's executive
director. Just as the center is a member
of the CooperationWorks! national network
of co-op development centers, the
association itself is a member of the
Federation of Southern Cooperatives,
which serves mostly black farm families
in 10 states and forms a considerable
constituency.
In addition to being “solidarity
savvy,” one thing these farmers share is
vision. “Co-ops like Indian Springs are
trailblazers,” Smith says. “They are getting
out there, opening eyes and ears—and doors. All they need is a little leadership and direction.
They can do the rest.”
