3c hapter - Index of

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