Imagine a business that doesn’t extract value, but reinvests in its community; where employees aren’t just workers but owners, and where workers have a clear path to wealth building.
That’s the power of a cooperative, a model in which individuals work together to run a business, buy property, or provide a service. For decades, cooperatives have provided an option for groups and communities – esp. historically disinvested communities – to build wealth and self-determination.
Like any other businesses, cooperatives (co-ops) need investment to create that growth. Several years ago, we thought: what model could we create to help co-ops in disinvested communities grow and scale? That is how the Co-op Innovation Award was born. This year, we celebrate the 10th anniversary of the Co-op Innovation Award, which we still leverage to celebrate and expand this transformational business model and the access to economic opportunity that it affords.
Continuing A Deep History of Supporting Cooperatives
Capital Impact Partners, part of the Momentus Capital branded family of organizations, has provided co-ops with loans and strategic support since our founding in 1982. We were formed through legislation approved by the United States Congress to support the development of cooperatives in underserved communities. In 1978, Congress saw the need to better support the cooperative movement. That led to the passage of the National Consumer Cooperative Bank Act and the creation of the National Cooperative Bank (NCB).
Four years later, a tiny division of NCB known as the Office of Self-Help Development and Technical Assistance was launched to provide more focused work on bringing co-ops to underestimated communities and contribute to the economic development of people living with low-to-moderate incomes.
Over time, this effort grew and went through several different names before becoming Capital Impact Partners – the nonprofit Community Development Financial Institution we are today.
To date, we have provided more than $300 million in lending to cooperatives nationwide, fueling the kind of equitable ownership opportunities that allow communities to build wealth.
Supporting Promising Co-op Models through New Approach
However, in 2015, we realized that some of the most promising co-op projects – many of which are launched by women and diverse communities – needed a different approach from the norm.
“We saw that the real innovation was happening in smaller, scrappier co-ops,” said Alison Powers, director, Economic Opportunities at Capital Impact Partners. “We wanted to water the seeds they were planting, but folks don’t need to take on debt at the earliest stages.”
To support that goal, Capital Impact Partners launched the Co-op Innovation Award, an annual grant program that supports cooperatives operating in communities that experience systemic disinvestment. Each year, award winners receive a one-year grant (anywhere from $10,000-50,000) to support innovative, early-stage projects with potential for scale. While co-ops from all sectors may apply, preference goes to worker co-ops (product or service providers) and co-ops focused on affordable housing and food access in disinvested areas.
Award recipients use their funding to launch and market new programs, hire specialists, invest in training and professional development, and more. In addition to this core support, the award often acts as catalytic capital that attracts further investment in these co-ops. Investment dollars can be hard to come by without cash already in-hand; the Award provides that leverage for co-ops. From 2015-2024, the 30 award winners leveraged their combined $1.025 million in grants to secure more than $13 million in additional funding.
How Co-ops Transform Communities
At the heart of the cooperative model is the principle of employee/member ownership. Each employee/member contributes equity capital to start or purchase the business and has an equal say in the co-op’s governance, regardless of their financial investment. Profits are distributed among members or reinvested in the business, ensuring that wealth stays within the community and benefits those who contribute to its success.
There are currently more than 30,000 cooperative businesses in the United States supporting two million jobs and earning more than $600 billion in revenue annually, but the potential exists for even greater impact.
Shared ownership means that the cooperative model can offer employees/members a powerful opportunity to build financial equity, which can help disinvested communities bridge the wealth gap. Local control and ownership keeps each cooperative focused on what its community wants and needs, and successful cooperatives create high-quality jobs and opportunities for employees/members to develop valuable leadership skills.
The Co-op Innovation Award in Action
With 30 recipients to date, the Co-op Innovation Award has already had a significant impact nationwide.
For Co-op Cincy, a non-profit that supports a network of worker-owned businesses in the Cincinnati metro area, receiving its $35,000 award in 2021 made a game-changing new “co-op boot camp” possible. Power in Numbers builds on Co-op Cincy’s preexisting “Co-op U” training program with targeted, Black-led training for teams of Black entrepreneurs launching new cooperatives. Participants spend 14 weeks attending weekly classes and getting the hands-on support they need to get a cooperative up and running. So far, the program has launched cooperative businesses ranging from food trucks to a radio station.
“We used the Co-op Innovation Award to help individuals from marginalized communities take economic control of their lives, developing co-op businesses that build long-term wealth. The grant funded our 2nd and 3rd iterations of Power in Numbers.
“Our vision and mission is to create a community that works for all — especially those who have been historically underserved — and it will take all of us to do that. We are really excited to have partners like Momentus Capital,” said Co-op Cincy Co-Director Ellen Vera.
The Industrial Commons is a cooperative in Morgantown, NC, supporting its community by building workforce development. They offer training in a variety of skills, including sewing and upholstery, giving local community members tangible skills and opportunities for wealth building. The Industrial Commons leveraged their $30,000 award to gain a Department of Labor grant, which has funded the work of connecting local youth with their upholstery training.
“This award has been a part of the braid that is forming our overall story. It helped us learn in an active and hands-on way about the furniture manufacturing sector, and helped with learnings that we were able to integrate into our Accelerating Common Economies (co-op training) program, which has served nine communities in cooperative development,” said Aaron Dawson, senior director of Workplace Development at The Industrial Commons.
The Future of the Award: Supporting Equitable Economic Growth for All
The Co-op Innovation Award is not just about start-up funding; it’s about fostering a vibrant ecosystem of cooperative businesses that are building a more equitable and sustainable future for all.
“The ongoing legacy of the Co-op Innovation Award is meeting cooperatives and communities where they are and investing in them to determine their future and build wealth for themselves,” said Alison Powers. “Through the award, Momentus Capital will continue to foster peoples’ right to achieve the dreams they have for themselves and their future.”
To learn more about other co-ops we support, read the following stories:
Affordable Housing Preservation Project Comes to Fruition with Mission-Centric Capital
Immigrant Entrepreneurs Driving Change
Are you part of a cooperative that’s driving innovation and creating positive change in your community?
We encourage you to explore the resources and support offered by Momentus Capital and to consider applying for next year’s Co-op Innovation Award. Together, we can build a stronger cooperative movement and a more inclusive economy.
