A new initiative by Vermont State Employees Credit Union (VSECU) leverages credit union capital and cooperative principles to help cooperative businesses drive growth in Vermont’s economy and boost their presence in local communities.
Through the Co-op Capital initiative, VSECU makes strategic equity investments in local cooperatives.
VSECU President/CEO Rob Miller believes that investing in Vermont’s thriving co-op community—130 cooperative businesses serve the state—will create living-wage jobs, support a sustainable and fair food system, provide affordable housing, and develop democratic workplaces and community ownership.
About two years ago, Miller succeeded Steven Post (Credit Union Magazine’s 2016 CU Hero of the Year) , as the credit union’s president/CEO. Under Post’s leadership, the credit union grew from $80 million in assets to more than $600 million, and expanded its membership to 50,000.
Miller understood the challenge of carrying on that legacy.
“We’ve spent a great deal of time over the last couple years thinking what our vision for the future was,” Miller says. “The more we thought about the challenges that face Vermont, Vermonters, and our members, the more we connected to our cooperative origins and our cooperative principles and values.
“We really do see ourselves as a cooperative as much as we see ourselves as a financial institution,” he continues. “And what is a cooperative but a group of people that come together to benefit each other in ways they could not do individually. That’s at the core of Co-op Capital and, more broadly, our vision to empower possibilities for social, financial, and environmental prosperity.”
At the heart of Co-op Capital is the belief that co-ops provide for more stable, diverse, and vibrant local economies, Miller says.
“Given that they are locally owned and democratically controlled, they are inherently more sustainable because the owners are also the members,” he says, adding that co-ops create healthier communities and healthier members. “And that will translate into more opportunities for us to be successful.”
Co-op Capital backs up those beliefs by fulfilling a vital financial need. Co-ops historically have had difficulty attracting institutional private equity.
“Typically, the value that private equity investments bring is influence and control in the operations and ventures in which they invest, and that isn’t allowed in a cooperative,” Miller says.
“I also think equity investment in co-ops is relatively new phenomenon,” he adds. “Some of the financing tools that have been developed for noncooperative businesses have been around longer and are a little more sophisticated and well accepted. That’s part of what we’re trying to change here. And we hope others will follow.”