Not for profits encouraged towards a co-operative solution

23 September 2015

Australian not for profits should consider the formation of enterprise co-operatives as a viable alternative to the more difficult process of mergers. With the not for profit sector being encouraged to consider mergers as an efficiency measure to supposedly reduce overlap and excess numbers, consideration needs to be given to a viable alternative to this difficult process.

Commenting on the issue, Melina Morrison, CEO of the BCCM said that while “…it might not be easier to do an enterprise cooperative it is an alternative structure that all depends on what the not for profit is trying to achieve.”

“If you want to retain organisational sovereignty and connection with your community and upscale capacity…and you want to share power and work collaboratively, then joining as a co-operative legal model might be something to think about”, she added.

According to Alan Greig from Social Business Australia, these “Enterprise co-operatives in the not for profit sector  –  based on a membership of NFP associations  –  can achieve the same benefits of sharing overheads, services and assets through cooperation as a merger will achieve through a ‘joined up’ management structure – but while still retaining each member’s own identity and heritage.”

Mr Greig pointed to the most recent example of an enterprise co-operative in the community transport sector in Western Sydney – a cooperative start-up formed through the mutualisation of three existing not for profit community transport providers under the umbrella of the Greater Western Sydney Community Transport Cooperative.

The BCCM’s submission to the current Senate Economics References Committee into co-operative, mutual and member-owned firms highlights shared services co-operatives provide members with services designed specifically to meet their needs so that the members can remain autonomous enterprises. Shared services make up 4.9 per cent of the Top 100 co-operative and mutual enterprises in Australia.

Pro Bono Australia