Crowdfunding, an innovative way to save your cooperative

Crowdfunding to save a cooperative?  It’s an idea so radical and innovative it took a very special food co-op, and a very supportive community to spearhead what is quickly becoming the most creatively cooperative way for co-ops to attain funding.

[caption id="attachment_2742" align="alignleft" width="200"] Aja Lawson
Marketing Associate & Social Media Manager. National Cooperative Bank[/caption]

The Isla Vista Food Co-op, in Isla Vista, California, is a consumer owned food co-op with 1300 members. In spite of the fact that roughly 90 percent of the typical members/shoppers at the co-op are students who attend the University of California-Santa Barbara (leading to a three to five year turnover rate), the Isla Vista Food Co-op has been able to attain and maintain a membership that is incredibly committed to the co-op. This loyalty can largely be attributed to the active role that the Isla Vista Food co-op plays in the community through education and outreach programs, as well as teaching incoming freshmen at UCSB how to have a values-based shopping experience.

Last October, the Isla Vista Food Co-op received news that would make it necessary to draw upon its tradition of innovation to meet its biggest challenge to date: the seemingly impossible goal of raising $200,000 to make the down payment to purchase the building it had been occupying for over 32 years - in just 40 days. Melissa Cohen, Isla Vista Food Co-op’s General Manager, knew that it was imperative to keep the co-op in the community and refused to leave its fate to a buyer with no invested interest. “The closure of the Isla Vista Food Co-op would negatively affect not only its members and shoppers, but the more than 30 local farmers the co-op purchases fresh produce from, as well as the countless other local (non-farm) producers who buy ingredients there and then sell their products back to the co-op.”

In the cooperative custom of keeping things local, Cohen sought funding from a bank that understand the unique needs of co-ops and was able to secure the $1.2 million dollar real estate loan it needed from National Cooperative Bank.  In addition, NorthCountry Cooperative Development Fund provided a subordinated loan of $200,000.  With financing secured, Isla Vista food co-op now had to raise the $200,000 it needed for the down payment.  Because of the transient nature of the cooperative’s membership, traditional methods for raising equity (i.e. through member loans) was not an option.  The Isla Vista Food Co-op would have to think very creatively.

Since the co-op was built upon the activism of the community, it was important to involve the entire community in the fundraising process. “It was critical to create something inspiring around this effort in order to create a culture of support,” says Cohen. “The co-op is only as strong as the community that’s around it”.  Crowdfunding, a relatively new type of fundraising made popular by sites like Kickstarter and Indiegogo, uses peer-to-peer donations to raise small amounts of capital from a large number of people for projects and ventures.  While crowdfunding has been widely successful for a number of causes, organizations and individuals, it had rarely – if ever – been used as a source of real estate funding for a co-op.  Although choosing crowdfunding meant the Isla Vista Food Co-op would be heading into unchartered territory, Cohen never lost faith that the money would be raised.  “This is a very unique type of business.  I look at this co-op as a ripple effect business.  So I decided we can take ripples and make waves. The power of the ripple is insurmountable. We have an opportunity to make the Isla Vista Food Co-op – and the Isla Vista Community – go down in history as a community that took a stand for this resource.  It’s a crazy idea…crazy enough to work.”

Abby Wolff – a former University of California-Santa Barbara student and long-time member or the Isla Vista Food Co-op – became the enthusiastic Campaign Manager for the fundraising effort that would be dubbed Project We Own It.  Wolff viewed Project We Own It as“an opportunity to bring an entire community together for positive change” and “a rare opportunity in Isla Vista for a real goal that’s tangible for our community”. Wolff created an impressive and ambitious grassroots fundraising campaign that would pull from the entire community of Isla Vista.  Though the co-op knew that the fundraising journey would be challenging, Cohen and Wolff were surprised at how easy it was to assemble a group of 75 volunteers to execute creative “guerilla-style” fundraising tactics during conferences, campus sports and other events.

The ripple effect that Cohen described became a reality and, in just 40 days the funds had been raised from donations from over 1,000 people, turning Project We Own It into Project We DID It. The residents of Isla Vista and Santa Barbara had taken ownership of their community, proving that united in a co-op, people can overcome even the most difficult obstacle to safeguard what matters most.

The leaders of the Isla Vista Food Co-op hope that the success of Project We Own It will serve as a positive example for other co-ops facing similar challenges.  Cohen and Wolff are currently working together to create a crowdfunding replication plan that would be readily available to co-ops as an online resource. Crowdfunding for co-ops has already been evidenced as a spreading concept. The Arroyo Food Co-op in Pasadena, California has a current campaign on Indiegogo, in which they are raising $10,000 for store improvements and the number of campaigns we see are sure to increase in the near future.

When asked for the most important advice she could offer to co-ops facing fundraising challenges, Cohen says, “First you need to find someone who is willing to work with your vision and do it fearlessly. Confidence in the process is the next biggest things.  Nothing is impossible. We are only limited by our own personal limitations. If you truly believe something is going to happen, it will.”

For more information about the Isla Vista Food Co-op and Project We Own It, visit:

http://islavistafoodcoop.blogspot.com/

http://projectweownit.wordpress.com/