New York City Worker Cooperative Business Development Initiative

New York City Worker Cooperative Business Development Initiative FY16

Final Report to City Council July 2016

BOC-NET Bronx Cooperative Development Initiative (BCDI) Center for Family Life/SCO Family of Services (CFL) CUNY Community Development Law Clinic Democracy at Work Institute (DAWI) Federation of Protestant Welfare Agencies (FPWA) Green Worker Cooperatives (GWC) ICA Group Make the Road New York (MTRNY) New York City Network of Worker Cooperatives (NYCNOWC) The Working World (TWW) Urban Justice Center (UJC) Urban Upbound (UU) Worker Justice Project (WJP)

2016 Funded Organizations Internal Document - Please do not disseminate

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Executive Summary A Year in Review

Looking forward to 2017, the Initiative will be leveraging its enhancement to $2.45M to ramp up its technical support and assistance services to the evergrowing community of fledgling worker cooperatives, to ensure they are connected to all the services they need to develop, scale, and provide their members with better opportunities.

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target : 138

cooperatives created final : 17

target : 16

TA service relationships final : 182

target : 114

entrepreneurs reached final : 2164

685= 997=

This business development contributed to the creation of 164 new, sustainable jobs which compete with industry standards in terms of pay and conditions.

Through its courses, events and outreach activities, the Initiative reached an additional 2164 entrepreneurs, business development professionals, and new partners who are now mobilized in support of worker cooperatives in the coming years.

841=

626= 1000=

The Initiative exceeded its anticipated outcomes, creating 17 new workerowned businesses, effectively tripling the number of cooperatives in three years. In FY16, Initiative members built on the successes of their inaugural year to develop 182 technical assistance service relationships to 114 individual businesses and amplify their reach to an ever-increasing pool of entrepreneurs and business owners interested in using the cooperative model to start, handoff or grow their business. The 14 organizations’ collaborative approach to business development and growth created a robust pipeline of service referrals and partnerships, shepherding cooperatives through their start up years. New partnerships were also built with City agencies and programs, notably with SBS and Best for NYC.

final : 164

941= 1000=

14 organizations collaborated through FY16 to provide workers, primarily unand underemployed people of color, with the tools and skills required to develop workplaces they will own and operate.

total hires 1000=

Mayor de Blasio has tasked all City agencies with a singular charge— provide inclusive economic development in New York City, building an economy that works for all New Yorkers. For the second year in a row, the City delivered on this charge through the Worker Cooperative Business Development Initiative, an effort in partnership with the de Blasio administration and the City Council.

Administered by the NYC Department of Small Business Services (SBS), this Initiative helps support worker cooperatives so that New Yorkers can achieve upward mobility by earning a better income, enjoying professional growth opportunities and accessing stable, quality employment.

target : 1483

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Progress on Key Metrics Cooperatives Created

Over the course of FY16, the Initiative brought 17 worker cooperatives from idea to operations (Fig. 1). Six of these were created through business conversions, wherein owners sell their businesses to their employees. The other 11 were created through business incubation and worker coop academies, which guide entrepreneurs through each step of business planning and development (Fig. 2). These 17 businesses operate in eight industries, as detailed in Table 1.

An additional 21 businesses were in the early stages of business development at the end of FY16, a promising beginning indicating continued demand and a consistent pipeline for these organisations’ services. The Initiative also launched its first cooperative in Staten Island, in addition to reaching new districts in Brooklyn, Queens and the Bronx. The total geographical reach of the Initiative’s cooperatives is detailed in Annex X.

Figure 1 Start-ups per stage, June 30 2016 Development stage

80= FY16 New Start-up

3

800=

2

440=

1

480= 10

20

# coops

Stage 1: Steps and Services Matching – Includes all consultations with prospective worker-owners where they are in the process of launching as a legal business entity but have not yet done so.

Stage 2: Registration and Structure – A business entity is ready to convert and/or launch as a worker cooperative and is in the process of registering their business and finding an appropriate legal structure.

Stage 3: Closed/Won – The worker cooperative has successfully launched wherein it has met the relevant legal requirements for doing business in the State of New York.

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Table 1 : Cooperatives Created by Industry #

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Sub-type

Industry*

Cooperatives Created in FY16 ([C] denotes a conversion)

Professional / Scientific Services

Advertising - PR & Related

The House of Spoof Collective

Computer System Design

Position Development, LLC [C]

Other professional services

Ometeotl

Other professional services

Strength in Numbers Co-op LLC

Food Services

All Hands & The Cook Bed-Stuy Fresh and Local [C]

Accomodation and Food Services

Brooklyn Packers [C]

3

Admin/Support & Security/Waste

Buildings & Dwellings

Dos Pinos Landscaping LLC

Other Support Services

Movement Netlab

Waste Management & Remediation Return Recycling [C] services Collectively Owned and Operated Platform, Inc. Transit & Ground Passenger

2

Transport / Warehousing / Aviation

2

Other (except Public Admin)

1

Construction

New Deal Home Improvement Company [C]

1

Healthcare / Social Assistance

Uptown Village

1

Arts / Entertainment / Recreation

The Illuminator Collective [C]

Workers Transport Luv Custom Prints Staten Island Childcare Cooperative

65+35+L

*North American Industry Classification System

Figure 2 : Start-up method 35% business conversion

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65% general development

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Technical Assistance Services Provided At the outset of FY16, the Initiative committed to build and strengthen the crop of newly created cooperatives emerging from City Council’s inaugural year of support for cooperative development.

The 14 organizations’ collaborative approach to business development and growth created a robust pipeline of service referrals and partnerships, shepherding cooperatives through these critical start up years. This allowed Initiative members to exceed their initial commitment : beyond growing and strengthening the 21 cooperatives created in FY15, they were able to provide support to 95 additional businesses, ranging from start-ups requesting business and market planning to established cooperative businesses seeking in-depth legal, financial and strategic assistance. The range and type of services provided by Initiative members are detailed in Figure 3.

Ultimately, 182 technical assistance service relationships were fostered with 114 individual businesses. Businesses received an average of 6.5 completed technical assistance services.

92+6+2L

Figure 3 Technical Assistance provided in FY16 1.5% financing

6% legal assistance

assistance

92.5% business

planning (see right)

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Business Planning 24%

Organizational Planning

18%

Strategic Planning

17%

Financial Planning

14%

Market Research

11%

Business Planning

7%

Governance Consultation

5%

Bookkeeping

3%

Internal Manuals

2%

Succession Planning

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Activities Report Assessing our Impact Our work touches New Yorkers’ lives by reaffirming their choice to opt for a small business ownership option with sustainability, justice and empowerment encoded in its DNA. Worker cooperatives offer entrepreneurs control over their working conditions and the fruits of their labor. They provide higher wages, more benefits and better job stability.

Worker cooperatives root wealth in New York City by allowing worker-owners to build both individual and community assets, and they give discouraged workers the opportunity to lift themselves into the middle class.

Teaming up with partners at the Solidarity Economy Research Project (SERP), Federation of Protestant Welfare Agencies (FPWA) sponsored a survey of the then-22 cooperatives in New York. Results compiled and analysed through early 2016 yielded compelling baseline data**: - 70% of New York City’s worker-owners are women, with 7 of the 22 cooperatives being fully woman-owned.

- 64% of worker-owners have no more than a high school degree; 31% completed college.

- 83% of worker-owners are non-white. 71% are Hispanic, while 5% are Black and 4% are Asian.

- the average base wage across all worker cooperatives was $25 per hour. The lowestpaying sector, Services (at 15$ per hour), nevertheless pays 50-88% above the industry’s 8-10$ per hour range.

The report concludes that as early as the start up phase, cooperatives demonstrate that they operate with the best interest of their worker-owners in mind, providing competitive wages to some of the City’s traditionally marginalized workers. This baseline data will be augmented by the second annual study in FY16, with updated data on cooperatives’ growing economic impact, available in the first quarter of calendar year 2017.

Capacity Within Organizations An important by-product of the City Council’s support has been the significant growth in the number of cooperative development experts and technical assistance professionals able to serve entrepreneurs on demand. Through attentive recruitment and a series of professional development courses and events, these individuals and their growing set of skills create a base for lasting impact across the City. **all data excludes Cooperative Home Care Associates, as they are statistical outliers. With a number of respondents nearly 20 times the size of the remaining sample, their inclusion would disproportionately skew the results.

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Collaboration & Ecosystem Development : Highlights This year has been one of consolidation and alignment for the Initiative members. As the rate of cooperative development has increased, developers worked more closely and intentionally with technical assistance providers to start, expand and grow new businesses.

Partnerships also ensured that cooperatives are introduced to the wealth of services at their disposal from the earliest stages of their business development. These partnerships have a multiplier effect on the quality and impact of services.

Alliances with City councillors and City agencies yielded development and visibility opportunities for cooperatives. In FY16, cooperatives participated in the 2nd annual Worker Cooperative Fair at City Hall, and were showcased in the inaugural Best for NYC award ceremony.

In addition, a number of organizations participating in the Initiative made a concerted effort to contract the services of local cooperatives in the course of developing cooperatives. It began to forge the complementary business support networks and market connections, as well as essential advocacy and outreach activities to continuously broaden the range of our audience and allies.

The Democracy at Work Institute conducted a number of workshops to developers on business and ecosystem development to Initiative partners, including BOCNET, cooperatives, developers, and other partners throughout New York City, including Citi Community Development, National Urban League and Catholic Charities.

The Working World (TWW) and the Center for Family Life (CFL) deepened their collaboration, organizing two “train the trainer” days to share curriculums and teach each other how to facilitate core trainings. Additionally, TWW gave basic financial trainings to CBO partners, such as Carroll Gardens Association and the members of the cooperatives they are incubating.

The Urban Justice Center (UJC) collaborated with cooperative developers, including Green Worker Cooperatives (GWC), Make the Road, CFL, Workers’ Justice Project, and CUNY Law to provide myriad legal services to start-up and existing cooperatives.

CFL and the ICA Group partnered to produce a feasibility study for the new Staten Island cooperative. ICA Group’s analytical skills and industry knowledge complemented CFL’s incubation expertise, with tangible benefits to this groundbreaking development project.

CFL also worked closely with UJC and the Staten Island Community Jobs Center to develop this worker cooperative.

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Impact on Cooperatives and their Members : Highlights Syllable, a t-shirt printing cooperative, saw the value of its contracts increase by 150% from the initial order to the final order. As a result of the experience and technical assistance Bronx Cooperative Development Initiative (BCDI) provided, Syllable has increased knowhow and experience in working with institutional purchasers and is better positioned for future contracting opportunities. The revenue from the orders is allowing the cooperative to upgrade some of its equipment.

After the workers of Bed-Stuy Fresh and Local agreed to move forward with conversion, TWW led and completed a customized training program to teach workers basic financial analysis and build ownership culture within the organization. TWW approved and disbursed a loan of $60,000 as a down payment of the purchase of the company by its workers and continues to assist in the transition to democratic ownership and governance. This amount represents the first payment from the workers to the owners in the cooperative conversion GWC’s coops, POLIDO, Diaspora Destinations, Bits & Bites, Bio-Classic, and Ginger Moon, received desk space at BOCNET’s BXL shared workspace. In addition, BOCNET provided Caracol Interpreters Cooperative, Goddess, Uptown Village, White Pine Community Farm, and Lxs Chilerxs with business counselling, following referrals from GWC. Through a partnership with CFL, BOCNET and the Consortium for Worker Education, ACTO for Safety was contracted to lead a number of OSHA trainings to United Handymen and a number of CFL’s cooperatives.

Urban Upbound continued supporting OnPoint Security by creating sales leads and cementing their partnership with LGI cameras, a security camera system provider. OnPoint secured its first contracts to provide security at private events. OnPoint Security launched its social media presence with the creation of a Facebook page and Twitter and LinkedIn accounts. .

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Appendix 1 : Where our Worker Cooperatives are Located

Total of 76 businesses, as remaining businesses did not have complete addresses in CRM.

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Industry*

Cooperatives & Businesses Served in FY16

15

Other (salon/cleaner/repair)

African Communities Together Apple Eco-Cleaning Beyond Care Child Care Cooperative Bio-Classic Cleaning Body Language Tattoo Celina Renal Childcare Coop Luv Custom Prints Nail Salon_Adhikari Pa'lante Forward Green Cleaning LLC Pre-Startup Child Care Carroll Gardens PreStartUp Cosmetology Cooperative SAMAMKAYA Si Se Puede Women's Cleaning Cooperative Third Root Community Health Center Trusty Amigos Pet Care Cooperative

8

Manufacturing

Food Manufacturing_Aigner HVAC_Lisiten Kings County Brewers Collective La Mies Bakery Manufacturing_Stephens Penn and Fletcher, Inc. Radix Media Syllable Cooperative

6

Accommodation & Food Services 3B Bed & Breakfast

Appendix 2 : Cooperatives and Businesses served, per Industry

#

Conscious Cuisine Diaspora Destination Ginger Moon Rockaway Food Coop United Business Cooperative 6

Education Services

A.C.T.O. for Safety LLC Caracol Interpreters Earth Living Skills OnPoint Educational Services Sunset Scholars Workers_Justice_Pre-Startup

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Industry*

5

Transport/Warehousing/Aviation Automotive_Landriscina Sunrise Cooperative Thoroughbred Pest Control Together Transportation Victory Bus Project

4

Admin/Support & Security/Waste Damayan Cleaning Cooperative Ecomundo Cleaning LLC OnPoint Property Management OnPoint Security

4

Construction

Build with Prospect ROCA MIA CONSTRUCTION INC Times Square Refrigeration A/C Corp.

United Handymen

3

Professional/Scientific Srvc

Bits and Bites, LLC Kaluk Marketing Over and Above

3

Retail Trade

BIG Reuse Heidi Lopez Flower Store Coop Nextdoorganics

2

Arts / Entertainment / Rec

Phil Shipman Sound POLIDO Skateboards

2

Healthcare/Social Assistance

Daycare Business_Coles Golden Steps Elder Care Cooperative

1

Agriculture/Forestry/Fishing

White Pine Community Farm

1

Finance & Insurance

A Bookkeeping Cooperative

1

Information/Media/Internet

GLOCAL

1

Real Estate & Rental Licensing

Urban Projects Collaborative, LLC

1

Wholesale Trade

Sanctuary Tea

Appendix 2 : Cooperatives and Businesses served, per Industry

Cooperatives & Businesses Served in FY16

#

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Appendix 3 : WCBDI Services to Cooperatives

Start-up services Courses Events Launch Consultation • STAGE 1 | Steps and Services Matching: Includes all consultations with prospective worker-owners where they are in the process of launching as a legal business entity but have not yet done so.

• STAGE 2 | Registration and Structure: A business entity is ready to convert and/or launch as a worker cooperative and is in the process of registering their business and finding an appropriate legal structure.

• STAGE 3 | Closed/Won: The worker cooperative has successfully launched wherein it has met the relevant legal requirements for doing business in the State of New York.

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Technical Assistance Services Legal Assistance Financing Assistance • Term Loans • Contract Financing • Lines of Credit • Equity Financing • Grants • Crowd funding

Business Planning • FINANCIAL PLANNING | This is a one-on-one consultation where you are assisting a business with financial planning; this does not include helping the business acquire funds.

• STRATEGIC PLANNING | This is a one-on-one consultation where you are assisting a business with determining any business strategies to utilize.

• MARKET RESEARCH | This is a one-on-one consultation where you are working with a business to conduct a market analysis and/or are providing them with marketing and outreach assistance. This service is provided once the business has completed a market analysis and/or has conducted marketing for their business.

• GOVERNANCE AND INTERNAL MANUALS | This is a one-on-one consultation where you are assisting a business in determining and/or writing their internal manuals. This service is provided once the business has written and/or finalized their internal manuals and/or governance structure.

• BUSINESS PLAN DEVELOPMENT | This is a one-on-one consultation where you are working with a business entity to write or modify a business plan. This service is provided once the business plan is written and/or finalized.

• ORGANISATIONAL PLANNING | This is a one-on-one consultation where the service provider assists a business with developing and/or maintaining any area within the business that needs assistance.

• TRANSLATION SERVICES | This is a one-on-one consultation with a business where you are assisting them with translating any language translation assistance. This service is provided once a particular translation service has been complete.

• BOOKKEEPING | This is a one-on-one consultation where you are assisting a business with any bookkeeping service. This service is provided once you have successfully provided assistance towards a bookkeeping issue that the business is experiencing.

• SUCCESSION PLANNING | This is a one-on-one consultation where you are assisting a business in selling their business to another entity, or transitioning the ownership of their business. This service is provided when you have helped the business create a complete succession plan.

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New York City Worker Cooperative Business Development Initiative Prepared by the WCBDI & SBS July 2016