It’s hard to turn on the news these days without hearing an update on jobs and unemployment. The federal government has invested millions in new projects to help create jobs across the US. For the city of Cleveland, waiting for federal assistance just isn’t enough. That is where a partnership of organizations including the Cleveland Foundation, the City of Cleveland, Case Western Reserve University, and the Cleveland Clinic, has stepped in.
The Cleveland Foundation, as part of its Greater University Circle Initiative, is spearheading a new strategy for community-based job creation and, more notably wealth creation, through the Evergreen Cooperatives. The cooperatives, based on the Mondragon model in Spain, give individuals who would normally be excluded from ownership opportunities the chance to both gain stable employment and to become equity owners in the businesses in which they are employed. The co-ops hire individuals from the local community to work in living wage jobs with good health care benefits. After six months, employees can start to contribute towards their ownership fund. By the end of this year, Evergreen hopes to have at least $60,000 in equity that will be distributed back to the employee/owners of its businesses.
The co-ops opened in October 2009 in response to opportunities identified by the Cleveland Foundation. Cleveland’s “anchor institutions,” which include the Cleveland Clinic and Case Western University, spend $3 billion each year on products and services. In addition, these institutions are looking for ways to green their operations. Cleveland’s health care clinics generate around 250 million pounds of hospital laundry every year. Seeing an enormous procurement opportunity, the Evergreen Cooperative Laundry was created to service area hospital laundry needs in a green, energy efficient manner. In addition, a state mandate in Ohio has regulated that the state must generate 60 solar megawatts of energy by 2012; existing energy providers are currently only generating around 2 megawatts. To capitalize on this opportunity, the Foundation, in cooperation with the Cleveland Clinic, started the Ohio Solar Cooperative to build and install solar panels and provide year-round weatherization services.
Evergreen is looking to expand this year with three new businesses: Green City Growers Cooperative, which will grow leafy greens and herbs to sell to local institutions and food providers; Evergreen Business Services, a B2B co-op that will provide back office services to the Evergreen network of businesses; and Neighborhood Voice, a student co-op that will employ local high school and college students to create media that will link and provide publicity for the seven Cleveland neighborhoods involved in the initiative.
While the model is not entirely unique (the federation of worker co-ops on which it is based has been operating in Spain since 1956), it is certainly innovative in the way that it is scaling a grassroots solution to the current unemployment crisis in the United States. Getting off the ground has not been easy, as India Pierce Lee, Program Director for Neighborhoods, Housing, and Community Development at the Cleveland Foundation, explained during a plenary session at the 2010 Annual BALLE Business Conference. The co-ops were initially turned away when they applied for loans from banks who were hesitant to funds risky start-ups (the operation is currently funded by a combination of new markets tax credits, bank debt, and a grant from the Cleveland Founation). However, the Foundation found a wide based of support for the co-op model including that of Cleveland Mayor Frank Jackson and local anchor institutions who understood the value of creating not just jobs but wealth through ownership in local, distressed communities. Following with this year’s theme for the BALLE conference, Evergreen is a clear example of how communities are bailing themselves out of the current economic crisis through community-based, locally-owned strategies.
Vale is a first year MBA student at Duke University’s Fuqua School of Business and is interested in how for-profit businesses are finding innovative ways to create social and environmental value. Her specific interests are around community economic development, local economies, and impact investing. Prior to enrolling at Fuqua she was the Deputy Director at Empowerment Group, a non-profit micro- enterprise development organization based in Philadelphia. Vale has a BA in Economics and Political Science from Swarthmore College.