Start an Opportunity Development Co-Operative in your community

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Opportunity Development Co-operatives (ODC) are locally owned and democratically controlled enterprises that invest capital locally to drive economic development. An ODC combines local capital with the local expertise to build economic development solutions that create both a financial and social return on investment.


ODCs tend to start when a small group of people begin discussing how local solutions, and local capital, play a role in local economic development. Perhaps there is an opportunity or a challenge in the community where local capital could be used to bolster a business, creating social gains and financial returns to the investors.


Co-operatives are led by a board of directors and engage in pooling capital through the sale of TFSA and RRSP eligible shares within a designated community; identity and assess local business opportunities that will create a financial and social return; investing in local businesses through lending, taking an equity position, or owning property; and, being active in supporting a strong local economy.


The board is responsible to ensure the ongoing activities of the co-operative, such as training and education of membership and new board members; building a portfolio of local businesses to invest in engaging membership on the activities and financial health of the ODC; and, administration and reporting required by co-operatives as required by Service Alberta and the CRA.

One of the main steps to starting an ODC is to form a steering committee of people who want to learn more about forming a co-operative; together they can help to spark ideas, and build some momentum within the group.


This group becomes the founding board of directors. They are tasked with developing the group’s expertise, finding additional members to incorporate the co-operative, and most importantly to find an opportunity to invest in. Part of their work involves learning about local investing, co-operatives, and economic development to build up their own expertise in pursuing this work. The steering committee may focus their initial work on exploring what has worked well in other communities, doing research on effective strategies and learning about how capital is raised and deployed locally. 


It is important for the group to formalize how they will operate. The next step will be the organizational mapping put into place: the incorporation process, how the group will work effectively, roles and responsibilities and appointing an executive committee.


A strategy and budget must be developed for the capital raising process; an investment criterion must be created, along with medium and long-term goals. Within this work the steering committee should also devise a criterion to assess local investment opportunities. The steering committee needs to know the potential return on investment, the costs associated with running their ODC, and the estimated returns to the investor members. Further, there are several administrative costs that need to be identified and budgeted for. At this point in the development process the steering committee will likely need to contribute to some of the initial costs, such as banking fees, directors’ insurance, and legal fees.


Investing other people`s savings requires substantial due diligence. It is important to enlist a lawyer to create all the key documents to incorporate a co-operative that can sell local securities (shares) in addition to articles of incorporation, insurance for the board of directors is important to obtain in order to mitigate the risk of liability. The lawyer should also understand the eligibility requirements for Community Economic Development Corporations, and any updates regarding exempt market shares with the Alberta Securities Commission.


The group must retain a law firm to  prepare an offering document to raise capital. The number of investors, share-amount, and overall amount of capital to be raised will determine the various securities exemptions the ODC can apply, and the process for the sale of shares. The ODC will also identify a trustee to hold the funds in trust until the successful completion of the capital raising process.


As the ODC is being developed it should also be applying to be a Community Economic Development Corporation, to be able to offer provincial income tax credits, as well as a member of the Canadian Worker Co-operative Federation RRSP/TFSA program.


For further information on development co-operatives in the province, contact Sean Leon, Manager, Alberta Community and Co-operative Association (ACCA) at sleon@acca.coop or by cellphone at (587) 216-2144.

Posted on:
Wednesday, September 26, 2018