This October, member-owners of GreenStar will be voting on setting up a patronage refund distribution system. What does this mean?

We’ll pay less taxes.
GreenStar is currently taxed at the standard corporate tax rate on all of its profits – 35%. Under a patronage scenario, co-ops are taxed only on the portion of the profit from non-member purchases. Since our members account for about 75% of purchases at GreenStar, that means 75% of our profits could be allocated and not taxed. This has the potential to bring our taxes down 75% while providing a benefit for member-owners, and contributing to the Co-op’s equity

You’ll receive a new Member Benefit.
In profitable years, GreenStar would determine the portion of its profit from member-owner purchases, declaring it an allocation. The Board of Directors would then decide how much to refund to member-owners. At a minimum, 20% of the allocation must be refunded to member-owners. The remainder of the allocation is retained as equity by the Co-op, and can be spent or saved, as determined by the Board of Directors.

Refunds are proportional to what each member-owner spent in the profitable year, so that one who spent $8,000 in a year would receive twice the refund of one who spent $4,000. Unlike discount-oriented benefits, all sale items purchased, such as Member Deals, Co+op Deals, and Co+op BASICS, will count towards patronage. Likewise, refunds correspond to how profitable the Co-op is, so the larger the surplus at the end of the year, the greater the refund. Refunds are distributed over a three-month window, during the following year. Member-owners will have the option to donate their refund to a charitable cause, if they prefer.

In summary, this proposal is about building equity in the Co-op. As owners of GreenStar, you build equity in the Co-op when you shop here. That equity is partially returned to you as a refund, and partially kept by the Co-op as retained equity. That equity can be leveraged for financing, saved for future projects, help replace equipment, and provide a cash buffer for slow periods.