Nonprofit organizations are considering worker-owned business development as a tool for community economic development. Worker-owned businesses and cooperatives often align with the mission of the nonprofit organizations that are seeking to build economic empowerment and opportunity. For more information about the ins and outs of using a non-profit cooperative as the sponsoring organization see the Think Outside the Boss Manual.
Profits are Funneled into the Community
The profit from services can be dedicated to the non-profit organization’s greater purpose. Excess revenues are dedicated to reinvesting the profit back into the community.
- 10% Time – workers build mini farms on co-worker’ lands
- 10% Talent – workers give time by assisting, training, and coaching others in the community – building mini-farms and gardens and
- 10% Produce – farm donates produce to a local food pantry.
Benefits to Individuals: Needs are Met through Community Based Nonprofits
Faith organizations are best positioned to wrap around the whole person by addressing the individual’s needs in a holistic way by providing access to:
- Workplace – The church has land located in the community.
- Wages & Education – Pay underemployed individuals with missing skills with a living wage while providing skills development through partnerships with education institutions.
- Transportation – the need for transportation is minimized by employing community members in close proximity to workplace.
- Child Care – The individual work schedule may be structured around their children’s education schedule.
- Food – The workplace provides access to healthy food for the local community and community training around healthy food choices.
A General Concern to Nonprofit Organizations Incubating Worker Cooperatives
Generally, the IRS wants to know if the work is primarily charitable in nature and helping the public. If the answer is yes, the business qualifies for tax exemption. It’s important to note if the activity is primarily benefiting private individuals the activity will be considered non-exempt. The bottom line is that a section 501(c)(3) organization must not be organized or operated for the benefit of private interests. No part of the net earnings of a section 501(c)(3) organization may inure to the benefit of any private shareholder or individual interest in the activities of the organization.
If you are interested in starting a cooperative effort, feel free to call me at (918) 565-0070 to assist you with your endeavor!