Our projects: Goldleaf Model

Goldleaf Commercial Cleaning - A worker-owned co-op

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Intro: A project to create living wage jobs through worker-owned co-ops

Goldleaf is a project designed to create “shared value” for community anchors ( businesses like Universities or hospials that are unlikely to move), funders, civic leaders, underemployed residents, and the community as a whole. The term “shared value”1  does not imply social responsibility or philanthropy, but a way to both enhance business success and create a more stable community simutaneously. Research shows that the most efficient way for anchors to bolster their local economies is not by charitable giving but by employing local residents; this has a greater sustained impact on urban prosperity than any other public initiative.

The shared value approach stresses the fact that communities’ and anchor institutions’ needs are inextricaly tied together ; strengthening relationships between the community and anchor institutions can not only help anchors find better ways to sell their products and services but also help community residents gain stable jobs that then becomes a foundation for a healthy vibrant community base. These practices also build goodwill in the community and can reduce the town and gown tensions that often get exascerabated in economically depresed times.

 

The Process: Building Goldleaf

Project Goals

Solution Generators Network (SGN) is working to bring jobs to marginalized populations, specifically difficult-to-employ residents of NE Central, that

  1. pay a living wage with benefits
  2. provide equity ownership for employees
  3. serve the larger needs of the entire community.

Overall Model

The way this will be accomplished is via business creation through contracts for goods and services with anchor institutions. The main difference between this method and more traditional strategies is that contractual agreements are reached before businesses are created in order to lower the risks inherent in any startup by establishing a customer base before incurring expenses and to open up avenues of capital acquisition that might otherwise be inaccessible.

We will create a cluster of these co-ops that can serve as a stabilizing force in the community and can lead to other community wealth building opportunities. Workers will also gain access to low interest car and housing loans over time. The phases of development are described below.

Evergreen Co-operatives in Cleveland, Ohio has created 90 permanent worker-owner positions using a similar model in just four years.

Co-opPhases

A Sustainable Win- Win Scenario

SGN- worker-owned cooperatives will be for-profit entities. That is, after the operational phase, the businesses—and their workers—should be largely self-supporting and able to access additional capital and credit. In addition, businesses should have the capacity to pay for any continuing services from the nonprofit business unit in order to help support new cooperative starts.

Worker Owned Co-ops That Service Anchor Institutions :
Build Wealth for Employees and Their community

The advantages of  worker owned co-ops is that they provide an opportunity for workers to earn equity in their jobs and this creates an economic foundation that allows them to secure car loans and eventually real estate loans that allow them to purchase their own homes as well. They become jobs that build wealth as well as solid economic security.

The Goldleaf project is designed to replicate the practices in Mondragon, Spain and Cleveland, Ohio, both places where worker owned co-ops have significaantly changed the economic landscape in their region. These co-ops have created living wages, more job securty, and a collaborative work climate where workers can shift from one business to another based on shifting economic circumstances or personal growth.

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Evergreen Co-ops

These businesses provide goods and services to anchor institutions in Cleveland.  The Evergreen Co-operative initiative was started in 20082 with the goal of providing living wage jobs for six low wealth communities by creating co-ops that could service the anchor institutions and capture some of their $3 billion dollars’ worth of procurement dollars. The targeted area included 43,000 residents with a median income below $18,500 in an area called the Greater University Circle. So far they have created 3 co-operatives employing 90 workers through a laundry facility, a hydroponic greenhouse, and a green building business. In these jobs, worker-owners have health insurance, decent wage levels and earn equity in their company over time as well. These co-ops have also been able to employ many people that traditionally have trouble securing work because of a previous history of incarceration. This Model was based on earlier co-operative model started in the Basque region of Spain, in the town of Mondragon.

Mondragon Model & Principles

The Mondragon co-operative enterprise began in 19563 and was the inspiration for the 2008 Evergreen Model that was developed in Ohio. The Mondragon Corporation is still thriving as the tenth largest company is Spain. It employs (as of 2013) 74,061 people in 257 companies and organizations across four areas: finance, industry, retail and knowledge. It owns its own bank and school and in 2013 had revenues of 16 billion dollars. The following four principles have guided the community from the onset:

MondragonPriciples

The Benefits of the Goldleaf Enterprise for Anchors and the Community

Since research shows that the most efficient way for anchors to bolster their local economies is not by charitable giving but by employing local residents; this has a greater sustained impact on urban prosperity than any other public initiative. This shared value approach strengthens relationships, builds goodwill in the community and builds greater social and financial stability for both.

Anchors not only have the capacity to bring their own funds to community development but they can also leverage other funds and create bigger projects as well. For example, Gunderson Lutheran Healthcare Systems4 made a commitment to purchase 20% local food in order to create healthier food for their patients and support local farmers and producers. Then they brought together a number of other stakeholders who were also willing to commit to buying local food and by convening this larger group of partners, they could support the creation of the Fifth Season Co-operative Food store that purchases local vegetables, meat, and dairy products. This served their health goals while also enhancing the vibrancy of the local economy. This is just one of the many illustrations of ways that anchor institutions have been able to impact low wealth communities and these strategies are just beginning to unlock the vast potential of anchor institutions.

There are seven key ways that anchors can strategically assist the community in which they live5.

  1. They can help develop real estate that improves the value of the area
  2. They can purchase goods from local vendors
  3. They can hire local residents for their day to day operations.
  4. They can help with work force development so that unemployment due to low skills levels can be reduced
  5. They can stimulate related business development and research in the area
  6. They can invest in infrastructure building in ways that create vibrant neighborhood without stimulating the negative ramifications of destructive gentrification trends
  7. By developing strong relationships within the community they can provide additional services and needed products to the community in ways that also increase the anchor’s  revenues.

The anchor institutions in the Triangle have already made powerful commitments to the community. Duke University’s Office of Durham and Regional Affairs (DARA) especially has invested in the community in numerable ways, including $4 million worth of loans to Self- Help to build affordable housing, and $400,000 deposited in the Latino Community Credit Union to help establish it, with $5 million more funds promised. Even as early as 1996, they have worked with the community to identify community needs and then have been particularly helpful in creating programs to address their identified needs (neighborhood stabilization, crime reduction, health care, affordable housing and education).

As a result of those conversations identifying community needs, Duke created a healthcare clinic, more affordable housing, and a multitude of education programs. Since Duke has been so involved in community development, we anticipate that having worker-owned co-ops provide services and products to the university would be in keeping with their mission to invest in the community in ways that further maximize the benefits of their other investments.

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