How do we get our co-op grass-roots organized, energized, and growing? While there are many possible approaches, one in particular has recently caught my attention and imagination: cooperative investment clubs.
Under American securities law, a group may form an organization that is exempt from the regulations governing “investment companies” so long as it meets certain conditions, such as including all members in decision making and being organized as a “pass through” entity such as a partnership or an LLC (which limits clubs to a maximum of 100 members). People have been forming such clubs for the better part of a century, but the focus has generally been around investing in publicly traded securities while saving money on brokerage fees and learning about finance.
The jump to applying this time-tested model to investing in cooperatives was first made in Minneapolis in 2013, when Co-op Principal was established. Club members agree to invest $50 per month, and they meet monthly (often at a local brewery) to discuss and vote on co-op investment opportunities. Since its founding, Co-op Principal has had a five-figure capital impact on its local co-op economy, and the club has generated annual returns for its members in the 2-4% range.
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