1. An Introduction to the Cooperative Business Model
Co-op Campaign Academies 2018
Executive Director Janice Brown

2. What is a Cooperative Business?
A type of corporation chartered under MCA Title 35 Chapters 15-18
A business owned and controlled by the very people who use its services
Earnings are allocated annually to member-owners based on their total purchases of co-op products/services
Profits are taxed once – either as corporate income or as distributed income to the member-owners

3. Basic Principles/Practices
User-Benefits: Member-owners have access to goods and services not otherwise available and at best possible price point. They share in business earnings.
User-Owned: – Members jointly own assets and have an obligation to finance and patronize the business.
User-Controlled: Members elect governing boards and have an equitable voice: one member, one vote.
All cooperatives also follow seven internationally recognized principles that guide their business conduct including cooperating with other co-ops and investing in education as well as their communities.

4. Cooperative Types & Functions
May be: consumer-owned, worker-owned; or owned by independent entities – farms, stores & hotels– that seek efficiencies through group purchasing or shared services
May be: local & centralized or federated (operating as a “co-op of co-ops” such as CHS, Inc.)
May have one or more functions:
To collectively market agricultural products
To purchase in bulk for better wholesale prices
To provide an essential service or product in the absence of sufficient ROI for others to enter market

5. MT Co-op Legal Structures
Cooperative Association (for profit)
Agricultural Association (for profit)
Cooperative Agricultural Marketing Association (not-for-profit)
Cooperative Utilities - Electric and telecommunications (not-for-profit)
In other states, cooperatives are most commonly formed as nonprofit corporations with exempted stock

6. More than 160 Montana Co-ops
51 credit unions
25 rural electric co-ops
Eight telecommunications co-ops
Due to consolidation, there are now fewer than 30 farm supply co-ops
Increasing number of ag co-ops for aggregation, distribution & marketing
Regional co-ops like NW Farm Credit
Growing variety of consumer, worker housing and investment cooperatives

7. Montana’s Credit Unions
Working to promote and enhance a thriving credit union community
The 501(c)6 Montana Credit Union League advocates and protects credit union interests
League Service Group – for-profit arm provides business services to credit unions
Montana Credit Unions for Community Development – 501(c)3 for charitable giving
Montana Credit Union Group Benefit Trust – health insurance and wellness programs
51 members in 10 chapters across the state

8. Montana Electric Cooperatives’ Association (MECA)
Not-for-profit statewide trade association based in Great Falls
25 consumer-owned, locally-controlled electric distribution co-ops; not-for-profit
Three generation & transmission co-ops
Serves more than 400,000 Montanans across all 56 counties
Collectively, Montana co-ops own and operate 56,000+ miles of power lines
Publisher of Rural Montana with state’s largest magazine circulation of 120,000

9. Montana Council of Cooperatives
Working to unite, promote and strengthen cooperative businesses across Montana
The Council helps 81 member cooperatives:
Connect & Engage
Learn & Grow
Assess Their Impact
Tell Their Story
Publishes biennial Economic Impact Study and supports development of new co-ops

10. Technical Assistance by Region
10 CRDCs help to promote co-ops

11. Montana LILA = Food Deserts
Montana has 13 low-income Census tracts (at least 20% of households at poverty level) where at least 500 people or 1/3 of population live more than 20 miles from the nearest supermarket or large grocery.
Most lie in farm- dependent areas

12. When the last grocery closes….
…rural cooperatives can continue to provide services in response to a market failure or when privately-held operations simply cannot survive.
“Fresh Start”
Grocery Co-op
Geraldine
Population 261

13. Neihart Store Cooperative
The conversion from private to co-op ownership has taken nearly two years to complete
Market survey identified $126,000 in investment potential and support from seasonal residents
Some 128 subscribers and $65K in equity raised
Neihart Store Cooperative
Neihart, MT
Population 51

14. Crucible Worker Cooperative
Custom design and fabrication studio that uses metal and wood in creative applications. The four owners each hold one share of common stock in the co-op enterprise and also are its employees.
Belgrade-based business

15. Housing Co-op Soon to Launch
Hamilton, MT
Population 4,348
Co-op to own 51 cottages, gardens and infrastructure
Riverside Crossing Adult Cottage Cooperative in the Bitterroot Valley expects to break ground in March 2018

16. Montana Cooperative Impact Project
Helping the next generation understand the economic importance of local co-ops
Fall Eastern Montana pilot week
Early April 2018: Flathead/Lincoln counties
May 1-5: Bitterroot Valley
Week of May 7: Northeast Montana counties
Week of May 14: Park/Meagher/Sweet Grass
Funded by a $25,000
CHS Foundation Education Grant