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178 Locavesting<br />
have locked in the 6 percent returns that Organic Valley investors<br />
enjoyed over the past several years?<br />
Will the interest in cooperatives fade when the economy is<br />
again chugging and investor expectations rise along with the Dow?<br />
Gillotte, for one, believes co- ops have staying power. “ Co- ops are<br />
starting to establish a track record that shows that we are resilient,<br />
so even if we run into disasters we get through them and people<br />
get their money back. Typically we are more responsible than the<br />
average business and people have a lot <strong>of</strong> trust in their co- ops,<br />
which helps,” he says. Sure enough, a 2008 study by the Quebec<br />
Ministry <strong>of</strong> Economic Development, Innovation and Export<br />
Trade found that the survival rate for cooperatives was twice that<br />
<strong>of</strong> other businesses. 11 And there is tangible benefi t, says Gillotte.<br />
“Investors can see what happens with their money. People don’t<br />
<strong>of</strong>ten get to build things or really feel connected with something<br />
that their money goes into. To see it go into your grocery store<br />
that is doing really cool things or your brewpub—that’s really gratifying<br />
for people, I think.”<br />
As head <strong>of</strong> the National Cooperative Business Association<br />
(NCBA), Paul Hazen is, naturally, bullish on co- ops. But his views<br />
have an indisputable logic. “If you’re interested in creating local<br />
jobs and economic activity, it’s the perfect model, because the<br />
people running the business are from the community and are<br />
going to do what’s in the best interest <strong>of</strong> the community,” he says.<br />
“You don’t have to worry about your investment going to China or<br />
Mexico with a cooperative.”<br />
Preferred share <strong>of</strong>ferings by co- ops, however, are not all<br />
that common. “You kind <strong>of</strong> have to trip over them by luck,” says<br />
Hazen. What’s more, registered fi nancial planners like Neil, who<br />
are regulated by the Financial Industry Regulatory Authority<br />
(FINRA), are not allowed to recommend co- op <strong>of</strong>ferings or other<br />
unregistered securities. (Although Neil’s fi rm, LPL Financial, has<br />
recently begun vetting such investments for clients upon request.)<br />
Two developments are worth noting. A new form <strong>of</strong> cooperative,<br />
the limited cooperative association (LCA), has been<br />
approved by fi ve states (Wyoming, Tennessee, Iowa, Minnesota,<br />
and Wisconsin). Designed to help co-ops raise capital, the LCA