Ask Not What Big Cooperatives Can Do For Platform Cooperatives, Ask What Platform Cooperatives Can Do For Big Cooperatives

15th April 2019
by Leo Sammallahti
Marketing Officer, Coop Exchange

Why Isnt There More Support From Big Cooperatives To Platform Cooperatives?

In order for platform cooperatives to grow large enough to challenge the economic status quo they need to tap into the resources of the already established, big cooperative sector. The Cooperatives UK and NESTA recently launched a platform cooperative investment fund with the goal of raising £1 million, with funding provided by institutional investors - hopefully including traditional cooperatives. If the 300 largest cooperatives and mutuals in the world would put 0.1% of their assets into such investment funds, it would allow 2000 such funds to be set up.
Why is this not happening?

One reason is the lack of new platform cooperatives, which itself is partly due to lack of funding. However, the lack of funding is not the full explanation as to why big cooperatives haven’t funded platform cooperatives. Platform Cooperative Development Kit has received a $1 million grant from Google - a grant larger than any traditional, old cooperative has given to any platform cooperative project. This is not to say big traditional cooperatives haven’t done great things for platform cooperatives; cooperative giant CCA Global Partners has supported start.coop, a platform cooperative incubator that gives $10,000 and 10 weeks of mentoring to 10 platform cooperatives. The co-founder and CEO of CCA Global Partners, Howard Brodsky, is also one of the mentors of the incubator.

A recent Cooperatives UK report, “The Governance of Large Co-operative Businesses” by Johnston Birchall offers a hint as to why many big cooperatives might have been reluctant to follow CCA Global Partners. The study states:
“It is when member-owned banks expand into other countries, and into investment banking activities that their own members do not need, that they become vulnerable. Provided they stick to their main purpose of meeting the members’ needs they are much safer than other types of bank.” Platform cooperatives that address the needs of existing members of big and traditional cooperatives might play a key role in channeling resources into the ecosystem.

A Need For A Global Network Of Cooperative Election Campaigners

There is a need for mutual support between platform cooperatives and the established cooperative giants.
One real life example of a cooperative giant supporting the establishment of a new cooperative can be found in Finland. In the 1980s, 8 truck drivers working in the warehouse of HOK Elanto, a cooperative (also the largest retailer and private employer in the country), established a worker-owned cooperative that has now expanded to comprise of 92 workers and €9.5 million in revenue. Getting contracts from the retail giant was a vital part of getting the cooperative off the ground.
Similar could be achieved for platform cooperatives. As an example, large cooperatives could use the services of a platform cooperative like Up&Go (cleaning service owned by the cleaners) to clean the offices of their credit union buildings.

How do we get big and old cooperatives to act as anchor institutions for platform cooperatives?

My proposal would be to set up a new platform cooperative that brings together platform coop enthusiasts who stand in cooperative elections with people who want to support them. Instead of a separate platform cooperative, it could also work as part of an existing platform cooperative like Platform6 or Social Coop (which I recommend everyone to join).
People who stand in coop elections could pitch themselves, and other members could provide them help with campaigning in various ways, such as funding, graphic design for campaign material, campaign video editing, etc. The cooperative could work together to make the electoral platform for the candidate.

For example, a quick Google Maps search gives 10 pages of results for credit unions in New York City. Perhaps the platform cooperative movement could find a person who is a member of one of those credit unions and would like to stand in the board elections with a policy proposals that include contracting the cleaning services of the credit union offices to Up&Go.

Alongside support for platform cooperatives, campaigning could also include support for non-intrusive and open source technology. This might mean a proposal for the credit union to move their website from using Google Analytics to a more privacy respecting alternative, such as Matumo. Another goal could be to expand member democracy. For example, NationWide building society in the UK gives community grants submitted and selected by members on one-member-one-vote basis. Similar participatory budgeting is used by some branches of the Finnish OP bank, Vermont State Employees Federal Credit Union and many other cooperatives. Imagine if the First Federal Tech Credit Union that has 450 000 members and 11.4 billion in assets would allocate some of the 30 000 hours of volunteering and 3.1$ million it contributed to charity last year to socially beneficial open source software, chosen and developed by its members using participatory budgeting.
The possibilities to modernize and energize cooperatives are endless. A global network of member elected representatives in large cooperatives sharing ideas and pushing for a common agenda in a coordinated manner is something that the internet enables with unprecedented ease.

This would be the opposite of hostile takeover of a shareholder company. The goal would not be take the cooperative over, but to give a revitalizing boost of energetic and enthusiastic member activism. Many cooperatives would (and those that wouldn’t should) love to have new people with new ideas putting effort into raising the voter participation. The platform cooperative should take full advantage of the democratic mechanisms within the existing cooperative sector and expand them.
The funding for election campaigns could be in the form of a loan that would only have to be paid back if the candidate is elected.

The successful candidate could also make an additional payment on top of paying back the loan. The successful candidate could also make an additional payment on top of paying back the loan.

I will be making a proposal to start such a coop as a part of Platform6 on Wednesday, and will contribute $100 to it. So if you are interested in standing in your local cooperative elections and want to push for a platform cooperative agenda, don’t hesitate to join Platform6!

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