The Fund for New Food Coops
About the Fund for New Food Coops
The Fund for New Food Coops supports start-up food coops that rely on member labor. Using donations from the Park Slope Food Coop, its members and other supporters, the Fund for New Food Coops offers low-cost loans to help new food coops pay for the critical items that enable them to grow and to generate income. Examples of appropriate uses for loan funds include rent deposit, refrigeration and other major equipment, and physical upgrades to shopping or storage space.
The purpose of the Fund for New Food Coops is to expand the role of member-run cooperatives in bringing healthy food at low prices to residents across Brooklyn and beyond. New, strong food coops will ultimately help the Park Slope Food Coop better satisfy its burgeoning membership and help meet the skyrocketing interest in food cooperatives. Providing favorable financing and, thereby, demonstrating the credit worthiness of new coops is one concrete way the Park Slope Food Coop supports nascent food coops and is aligned with the Cooperative Principles that encourage mutual support.
How We Started
In January 2012, the General Membership voted to create a Revolving Loan Fund Committee to support new member labor food coops and to annually donate $20,000 to the fund, contingent upon the fiscal well-being of the Coop. The Fund will also solicit donations from Park Slope Food Coop members and other supporters. The Fund received its first donation of $20,000 from the Park Slope Food Coop at the end of 2012 and began receiving donations from individuals in the spring of 2013. We plan to make our first loan in 2015.
Who We Are and How We Work
The Fund for New Food Coops is overseen on behalf of the membership by the Revolving Loan Committee. The current Committee of Park Slope Food Coop members was approved by the Park Slope Food Coop general membership in May 2012. The Committee may include up to seven members; committee members serve terms of one to three years. Should you wish to join this Committee, write to loancommittee@psfc.coop.
The FJC, a public charity that provides management of charitable giving, was chosen by the Revolving Loan Committee to serve as the fiscal administrator for the Fund for New Food Coops. FJC accepts donations for the Fund for New Food Coops and will make the loans to qualified new member-labor coops on the recommendation of the Revolving Loan Committee. Donations for the Fund for New Food Coops should be made to FJC; donations are tax-deductible. FJC charges minimal administrative fees for their services.
Please address questions about the Fund for New Food Coops to: loancommittee@psfc.coop.
Donate: Support The Fund for New Food Coops!
The Fund for New Food Coops is seeking tax-deductible donations to support new coops in Brooklyn, the other boroughs of New York City and beyond.
Donations to the Fund for New Food Coops are made to FJC, our fiscal administrator. Until distributed, funds are held in a managed account sponsored by FJC in the name of the Fund for New Food Coops. The account is chosen by the Park Slope Food Coop’s Revolving Loan Fund Committee and earns interest which accumulates to the benefit of the Fund.
Once the Committee approves a borrower’s application and makes a recommendation to FJC, donations are used to make a loan to a member-labor coop. A loan may be used for equipment, renovation or other purpose as approved by the Committee. Over time, the borrower will repay the loan and the repaid funds will be recycled to provide new loans.
How to Donate
The Fund for New Coops accepts donations of any size. You may support the fund:
- Online – You may donate via PayPal or credit card here: Donate
- At checkout at the Park Slope Food Coop—Donate up to $249 at the register with a Fund for New Food Coops Donation Card available from wall racks in the coop. Make your donation with Cash, Check or debit card. Checkout cards can also be obtained in the membership office.
- By check made payable to the Fund for New Food Coops(write FJC on the memo line):
Mail to:
FJC
31 W 34th St, Suite 8026
New York, NY 10001
Information for New Food Coops/Applicants
Who Should Apply & What to Expect?
The Fund for New Food Coops is eager to work with prospective borrowers to make the process of applying for a loan as simple and straightforward as possible. The Fund was created and is supported by the Park Slope Food Coop and its members to help new, member labor food coops grow. The Fund’s financing is in the form of loans so that the moneys can be recycled to continue to support member-run coops. We do not anticipate lending to coops that use tiered pricing models.
Loan amounts: During the initial start-up period, the Fund for New Food Coops will consider loans starting at $5,000 up to the amount of the Fund’s current resources.
Loan Purposes: Loans will be made to support requests that help increase revenue, for example, inventory, equipment, renovation, rental deposits. We will not support salaries or major construction projects. Please contact us at loancommittee@psfc.coop to discuss your specific needs.
Borrower Eligibility: The Fund for New Food Coops will support member-labor grocery cooperatives that are able to project positive cash flow. At this time, priority will be given to food coops located in New York City. Applicants should be prepared to provide basic operating documentation to the Fund for New Food Coops, e.g., financial statements and projections, membership policies, evidence of adequate insurance.
Loan terms: The Fund is offering loans at an annual interest rate of 2%. Other loan terms and conditions will be structured based on the loan’s purpose and the coop’s ability to pay. The Fund will work with borrowers to create repayment terms that support the borrower’s growth. All interest payments are used to cover administrative costs and to grow the loan fund to support member run coops.
Timing: The Fund will endeavor to fund loans within six to eight weeks from the time a completed application is submitted.
Steps to Apply for a loan
- Initial Contact: The first step for prospective borrowers, prior to filling out an application, is to email the Fund for New Food Coops at: loancommittee@psfc.coop. The Fund will designate a primary contact within two weeks of receipt of a prospective borrower’s email inquiry. The Fund’s primary contact will discuss the prospective borrower’s interest in a loan, the loan purpose and eligibility requirements.
- Application completion and submission: After the Fund’s primary contact has determined that the potential borrower meets the basic eligibility requirements the prospective borrower should complete and submit their application including all required supporting documentation via email to: loancommittee@psfc.coop. The Fund’s primary contact will be available to respond to borrowers’ questions about completing the application.
- Interview and Site Visit: After a preliminary review of the application the Fund’s primary contact will reach out to the prospective borrower with any follow-up questions and arrange for an interview and site visit. Members of the Fund will meet with the decision makers of the prospective borrower who are responsible for finances, membership, inventory and other key functions related to the loan request. At the site visit, the Fund members will want to see the store in operation, as well as its equipment, inventory system, accounting systems, and membership systems.
- Application Review and Decision: Within two weeks of the interview and site visit assuming all additional requested information has been received, the Fund will meet to review the application, supporting materials and site visit findings. The Fund may request further information or make a decision on whether to approve the loan, and if approved, discuss loan terms. The Fund’s designated contact will notify the borrower of the Fund’s decision as soon as practically possible.
- Documentation: Once the committee recommends a loan, the borrower will receive the loan documents from FJC, the fiscal administrator for the food coop. The Note and Loan Agreement will describe the loan terms, the principal and interest payment schedule, performance requirements of the Borrower, and events that would constitute a “default” by the Borrower.
- Execution and Funding: Once the borrower, the Fund and FJC have finalized the documentation, the loan note will be executed and funded. FJC will service the loan; the borrower will receive invoices for principle and interest payments from FJC.
Why Member Labor Coops?
The Fund for New Food Coops will fund emerging coops that adhere to the model of full member participation. In this model, anyone may become a member, only members may shop, all members contribute labor, and food prices are kept very low because of resulting low labor costs.
The Park Slope Food Coop has successfully provided good food at low prices for more than 40 years in large part because of its rarely implemented model of full member participation in labor. The system of total member participation allows the Park Slope Food Coop to save money on what is otherwise the largest expense for a grocery store of its size: labor. Prices reflect this savings and are typically significantly lower than supermarkets and other food coops.
Unlike many other cooperative grocery stores, all members pay the same price for each item. In other coops that do not require all able-bodied members to work, prices vary depending on one or more of several conditions including whether a shopper is a member and whether a shopper works. Savings in labor costs allow the Park Slope Food Coop to treat the 70 people employed by the Coop exceptionally well, by providing not only fair wages but also excellent benefits, leave policies and retirement funds for staff.
Full member participation results in the Coop’s unique and uniquely inclusive community. Everyone is welcomed to join and diversity is celebrated. The cooperative structure of participation has proved durable, adding new members every year and withstanding many challenges over four decades.
Charitable Contributions to the Fund for new food coops are Tax-deductible!
The Fund for New Food Coops selected FJC to administer our loans, in part because FJC is a nonprofit 501 (C) 3 charitable organization enabling contributions made to the Fund to be tax-deductible. As with any charitable contribution a receipt is required to quantify the contribution with the U.S. Internal Revenue Service (IRS).
Supporters contributing online will receive an electronic receipt as proof of contribution. An on-line contribution in an amount over $250 will be acknowledged in correspondence directly from FJC as required to meet IRS rules. A cancelled check or credit card statement will serve as a receipt for supporters making contributions via check or credit card. For in-store contributions made with donation cards at the register, the tax-deductible contribution is noted as a line item on the purchase receipt. Any cash contribution of $250 or more requires a written acknowledgment from FJC. A cash register receipt is not sufficient to satisfy the IRS.