A Unique Take on How the Cooperative Business Model Serves Today's Needs

Now that local authors know each other, Kurtz, along with his business partner Sion Lidster, is expanding his mission to provide a brick and mortar venue where South Dakota authors and other artists can gather, share and market their works.

 To bring this lofty dream to fruition, Kurtz turned to the cooperative business model.

 “This is a low-cost model that helps an entire community, by centralizing similar organizations and providing opportunities to grow,” Kurtz says of Full Circle Book Co-op. Kurtz hopes to open up shop in downtown Sioux Falls this winter.

 Although a book cooperative falls outside the tradition of the many agricultural, electric or communications cooperatives housed within South Dakota, it’s a great example of the flexibility and opportunity found within the cooperative business model, explains Brenda Forman, Executive Director of the South Dakota Association of Cooperatives. “A cooperative is a good way to get a new idea off the ground because everyone involved in the business also owns the business – they have a vested interest to make sure the business is strong, profitable and provides a service that is needed.”

 She recalls the history of the state’s first cooperatives, which were started by rural citizens more than a century ago to fill needs – like marketing grain and providing electricity and telephone services to rural homes. These cooperatives were chartered because private industry didn’t see the financial value in providing the infrastructure necessary to meet the needs of sparse, rural populations.

 Sioux Falls-based Co-op Natural Foods shares a similar history.

 In the early 1970s there wasn’t a store in Sioux Falls where you could buy organic and whole foods, so about a dozen families organized and each month a family would travel to a large city to buy bulk, organic pantry staples and bring them back and divide them among the 12 families.

 “Over time more families wanted in and pretty soon, no one had a vehicle large enough to haul the food, so they started a cooperative and opened a storefront,” says Patrick Sayler, Co-op Natural Foods general manager.

 Today, Co-op Natural Foods boasts 2,000 active members and serves about 2,000 customers each week. And, even though organic and whole foods can be purchased in nearly every grocery store throughout the Sioux Empire, the cooperative model keeps the prices at Co-op Natural Foods below the competition. “As a cooperative, we are a member of a national cooperative, which adds up to $2 billion in buying power and a stronger ability to negotiate purchasing contracts,” Sayler explains.

 Better prices is a big reason Riverton Community Housing exists. As affordable student housing dwindled in the Minneapolis area, this non-profit cooperative owns and manages properties that are rented to its student-members at cost. 

 “When you talk with students and look at rising tuition costs, housing is a huge part of the affordability equation,” says Joe Goetzke, Leasing/Marketing and Member Services Manager for the Minneapolis-based student-housing cooperative developer.

 Goetzke explains that through cooperatives, the buildings they manage are able to pass the savings found within property tax breaks and utilities volume discounts on to members. The result? Cooperative members pay 10 to 20 percent less in rent than their neighbors.

 You have a voice

Advantages to the cooperative model are not only found in  members’ bank accounts, the fact that co-op members have a voice and are encouraged to get involved in the cooperative was a big draw for Lily Ng, 70, who owns a home in Becketwood Cooperative, a Minneapolis housing community for independent adults over 55.

 “The first thing I saw when I toured Becketwood was several activity sign-up sheets outside the main office – there were at least 10 activities or excursions to sign up for. That’s when I knew this was the place for me,” explains Ng, who moved to Becketwood and is a retired chemistry professor and department head.

 Ten activities was a little deceiving. Every month, residents of this independent living community, have more than 100 choices of activities or excursions to participate in, all organized by homeowner/members with help from cooperative staff.

 “When seniors retire, it is easy to become isolated and if they lose the ability to drive, their world shrinks even more,” explains Kari Tweiten Macdonald, Marketing Coordinator for Becketwood. “Becketwood was designed so this would not happen. In fact, if a member has not seen their neighbor for one or two days, they may call us to check in with them.”

 When Ng first moved in, she was assigned a member mentor who taught her about what cooperative membership was all about. She fully embraced the concept and quickly began volunteering. In 2014, she was asked to run for the board of directors and was elected to serve as vice president. Today, she serves as board president.

 Because Ng moved from Cleveland to be close to her daughter who lives and works in Minneapolis, she didn’t know anyone. Living in Becketwood, that soon changed.

 “You get to know people when you serve on committees together. Becketwood reminds me a lot of life on a university campus – everything is decided by committees. The same thing here at Becketwood.”

 And, when Ng wants to explore her new city, she doesn’t have to drive unless she wants to. Becketwood cooperative owns its own bus.

 All the no-maintenance amenities and other member benefits found within the Becketwood community don’t cost members more than owning a home of the same size. In fact, members pay less. And, because Becketwood is set up as a market-rate cooperative, when members do decide to move on, they set the sale price of their homes and retain equity when they sell.

 “I like the control of my living environment living in a cooperative gives me. I have friends who are retired and live in condos. They are nice, but they don’t know their neighbors, they don’t have transportation – Becketwood is very special to me,” Ng says.