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People are becoming more conscious of where their money goes. Whether they want to support Canadian companies or seek out local small business owners over large corporations, they want to ensure their hard-earned dollars support people close to home — not in far-off corporate board rooms.
People are realizing they don’t care about The Shareholders. They care about their neighbours.
This is one of the great things about co-operatives: they are owned by the people who use them, their purpose is to provide their members with what they want, and they give their profits back to those members and their communities.
Compare that to companies owned by a small group of wealthy shareholders who make decisions based only on what will enrich them the most.
Keeping wealth local in Old Crow
Consider the community of Old Crow in the far northern part of the Yukon. Old Crow can’t be reached by vehicle – goods have to be flown into the community, and groceries are expensive.
For many years, Old Crow had a Northern Store – a grocery retailer owned by The Northwest Company. Headquartered in Winnipeg with brands and locations around the world, The Northwest Company lacked a local perspective or concern about the community itself – and residents of Old Crow took notice.
People in the community had no say over what the Northern Store did, what products it sold, or what it did with its profits.
“The thing with Northern is I didn’t see any benefits coming to the community,” said Old Crow resident, Tracy Rispin. “One day they boosted about how much of a profit they made out of the communities and Old Crow was third on that list with $1.8 million. To see that and not to see it in the community – I didn’t like it.”
When the Northern Store’s 25-year lease came up for renewal, the community decided to go another route. Instead of giving another quarter century to a company that didn’t have its community’s best interests at heart, it decided to partner with Arctic Co-operatives Limited to create a Co-op grocery store.
Now, owned by local residents, the Co-op focuses on bringing in healthy, fresh food the community wants, and redistributing its profits to members and community projects. That wealth no longer flows to far-off shareholders – it stays and circulates in Old Crow.
How co-ops keep wealth local
How do co-ops keep wealth circulating locally? Unlike corporations that distribute profits to the people who own the most shares, co-ops’ approach to profit is more widely beneficial. A for-profit co-op’s options for allocating its profits are:
- Patronage
When co-ops make a profit, they can give it (or at least a portion of it) back to their member-owners. How much an individual gets is based on how much they used the co-op that year. Instead of heading out of the community, those profits go back into the pockets of people who can turn around and spend them, again, at local businesses.
2. Investment dividends
If your co-op has financed itself partially by selling investment shares, those investors are most likely local – not buying shares on a stock exchange. So when the co-op issues investment dividends, local people get a return on their investment, which builds local wealth.
3. Donations
Co-ops often donate some of their profits to local initiatives or charitable organizations. So your local park, sports league, or childcare centre can get a boost thanks to the money co-op members spend.
An easy way to support your local economy
Supporting a co-operative is one of the easiest ways to give your community a boost. So if you want your pay cheque to do some extra good, spend it at a co-op!
