Question 2: Should GreenStar’s bylaws and certificate of incorporation be amended to allow for the purchase of optional member-owner equity investments, for the purpose of raising funds, by its Member-Owners?
By Laura Buttenbaum, GreenStar Board member and Governance Committee Chair
All projects need adequate capital to be successful. As a community-owned, cooperative business, GreenStar doesn’t have a corporate parent or distant stockholders to raise capital from. Instead, we rely on the investment of our member-owners, through their required equity payments (membership renewals, also called ‘common shares’ in our bylaws) to provide GreenStar with capital. While the capital raised through these payments is sufficient to meet the Co-op’s needs in normal operating years, it is not enough to meet the needs of major expansion or relocation projects. Across the country, our sister co-ops have successfully raised significant funds from their owners as a part of their project capitalization through capital campaigns, and GreenStar hopes to do the same. But first, we need to amend our bylaws and certificate of incorporation to allow GreenStar to be able to offer optional member-owner equity investments or “Investment Shares” (legally referred to as ‘non-voting preferred shares’).
Offering our community of in-state owners the opportunity to have a clear and direct role in our proposed relocation and retail expansion project, through their financial investments, is unique to co-ops. One important piece in funding our relocation project includes providing our owners with the option to purchase the aforementioned Investment Shares. These Investment Shares represent an additional benefit to being a GreenStar owner, providing a responsible, local investment opportunity available only to our owners. By reducing the amount of outside financing needed, our Co-op keeps more control in the hands of the owners, where it belongs. Investing in our Co-op builds community wealth, and brings the benefits of cooperation to more of our community, and owners who invest will receive a fair return on their investment. It’s a win-win for all involved.
Raising capital from owners has other, farther-reaching effects, such as making our communities and country more just. A great deal of injustice in our country, both historically and today, is deeply rooted in concentration of capital. Keeping more of our money out of large lending institutions, and keeping it in our communities, being used by locally owned organizations like our Co-op and earning a fair return for our co-op owners, is a not-so-small way we can make our voices heard and stand up for our community. The suggested changes to our bylaws and certificate of incorporation will give GreenStar owners the opportunity to invest in a more just, sustainable, and cooperative future. If you would like to find out more, contact firstname.lastname@example.org.
Learn more about the Special Vote on the West End expansion project here.