Paul Batalden said, “Every system is perfectly designed to get the results it gets.” That being the case, it seems that our economic is perfectly designed to multiply wealth for those who have it, while holding the promise of wealth just beyond the reach of those without. I find this reality troubling and find myself under increasing compulsion to do something about it. I call that something “The Equity Project.”
Redesigning the economic system so that it brings life to everyone in it is a tall order, though. Instead, the goal of The Equity Project is to use the systems currently available (free-market economics, philanthropic investment, and community development) to break cycles of poverty and replace them with sustainable cycles of life. The centerpiece of this approach is the cooperative business structure, where employees themselves provide governance and ownership, aligning business decisions with the long-term interest of those within the business.
Cooperatives are common structures in certain niches in the US economy such as rural electric service providers, small-scale farming, and credit unions. Internationally, The Mondragon Corporation is one of the best examples available of taking cooperatives to a large scale. Started in 1956, Mondragon currently generates annual revenues approaching 12 Billion € and employs a workforce in excess of 74,000 people, making it the 10th largest business group in Spain.
On a smaller scale, and closer to home, the Evergreen Cooperatives in Cleveland, Ohio provide another remarkable example. “The Cleveland model” relies on a partnership between philanthropy, local government, and “anchor institutions” to establish and grow businesses designed to provide employment and build wealth in underinvested neighborhoods. So far, Evergreen has launched the following ventures:
Evergreen came to life when the City of Cleveland, and the city-focused Cleveland Foundation, assessed their efforts to address poverty and homelessness. They were not satisfied with the results and wanted to try something different. They partnered with Ted Howard of Democracy Collaborative, to develop agrass-roots approach to economic development.[i]
In a recent conversation with Ted Howard, I learned that the inclusion of anchor institutions in the development process was one of the central innovations in the Cleveland model. University Hospitals, The Cleveland Clinic, and Case Western Reserve University formed the core group of institutional stakeholders for Evergreen and represent combined annual procurements of $392.8 Million.[ii] The idea was to provide a product or service that could effectively serve the need represented by some portion of that budget and, in the process, improve the lives of the people involved.
Seems like a fantastic plan if you’re in Cleveland. What about everywhere else? While I’ve shared a story from Cleveland, I’m willing to bet that somewhere near where you live we could find:
- Neighborhoods left behind by economic and commercial development
- Place-based institutions with a long-term interest in the success of their surrounding community
- People who want to work but struggle to find jobs near their homes
- People born into poverty but desperate to break free of it
I’m willing to bet you might even have names and faces to go with those descriptions because, to my shame and dismay, those situations are everywhere. I’d like to do something about that. Let’s work on it together!
[i] (The Evergreen Cooperative Corporation, 2016) The Evergreen Cooperative Corporation. (2016). About Us. Retrieved from Evergreen Cooperatives: http://www.evgoh.com/about-us/
[ii] (Wright, Hexter, & Downer, 2016, p. 9) Wright, W., Hexter, K. W., & Downer, N. (2016). Cleveland’s Greater University Circle Initiative: An Anchor-Based Strategy for Change. Cleveland, OH: The Democracy Collaborative. Retrieved 05 10, 2017, from http://democracycollaborative.org/greater-university-circle-initiative