Hold meetings and prepare materials describing the co-op for new members. Establish member investment options and conduct an active member equity drive.
GOAL: To secure the written and financial commitments of members.
WHAT TO DO: Set goals for how many members, how much equity, and how much in member loans the co-op needs to obtain by a certain deadline. Create an action plan to achieve those goals. Consider creating visual aids to show progress — in a newsletter, at an office, or on a website.
For the membership system:
- Research consumer co-op membership structures.
- Create a proposal covering all aspects of the co-op’s membership system. Be sure to address member equity requirement, types of memberships, minimum payment to join and payment options, additional fees, share repurchase (refund) options and limitations, member benefits.
- Once the board (or steering committee) has approved a membership structure, prepare a simple, clear brochure explaining the co-op’s membership system. Consider setting up a website or at least a web page with membership information. Prepare a membership application and other administrative materials. If possible, have these materials reviewed by an expert or an attorney to make sure that proper representations are made and that terminology is used accurately and legally.
- Establish goals for member recruitment and investment. Develop a method to track progress on those goals. Report back to the board on progress and share successes with co-op members and volunteers.
- Set up record keeping systems to track membership and member benefits.
- Develop a plan for member recruitment. Identify events and opportunities where you can get the word out about the co-op; mail brochures and information to those who have indicated an interest in the co-op; use networks of existing co-op members and supporters; send information to the local newspaper, radio, and in other media outlets.
For a member loan program:
- Research member loan programs used by other co-ops and get sample materials from by those co-ops.
- Determine how much the co-op will need in member loans. Based on that information, set limits such as the minimum size or term of the loan. Set interest rates for loans.
- Create materials for member loans: a brochure or background information, a promissory note
- Publicize the co-op’s member loan program among members.
- Have an attorney knowledgeable in co-op and securities laws review your member loan program and materials. State laws differ and you need to make sure that your program is legal and won’t cause the co-op problems in the future.
KEEP IN MIND:
The membership structure is the foundation of your co-op. Carefully research membership issues and learn from the best practices and mistakes of other, similar co-ops. Set up a system that will work for your co-op as a whole and for your members individually. By doing your homework and thoroughly researching options, you will avoid the need to change your membership system in the future. And, be sure to learn what words to use and what to avoid, in membership system. Members join by making an investment, not paying a fee; avoid the term “lifetime members,” in case the co-op needs to change its membership requirements in the future.
KEY DECISION: DO WE HAVE SUFFICIENT MEMBERSHIP COMMITMENT TO THE CO-OP? Can we get sufficient financing from members to leverage further funding and to keep debt costs within reason?