Rebuilding with resiliency and equity through employee ownership: Full webinar recording

i'm anna lisa miller director of development and regional engagement at project equity thank you so much for joining us for rebuilding with resiliency and equity through employee ownership the evidence is clear and the time is now project equity is a national nonprofit that fosters economic resiliency with frontline workers and workers of color through employee ownership our main strategy is to transition small strong businesses with low income and diverse workforces to employee ownership resulting in quality jobs empowered workers and strong local economies and our core leverage point for facilitating these transitions is harnessing the silver tsunami of retiring baby boomer business owners most of whom lack succession plans and whose businesses would otherwise close upon their retirement so what we do is we work with these business owners and transition ownership to their employees and in doing so we preserve long-term local ownership of vital community businesses and we also create tremendous wealth building potential for the next generation of diverse business owners this is particularly important right now as covid19 is accelerating the pace of small business closures and as a movement for black lives calls upon all of us to address systemic racism in all areas of our society including the racial wealth gap so what is employee ownership it is a high impact but little known business structure in which a broad base of employees owns the business where they work so a lot of us are familiar with stock options that's the most common form of employee ownership today but it's usually available only to management in contrast broad-based employee ownership gives all employees who meet basic criteria the opportunity to become employee owners and reap the benefits of employee ownership so there are three main forms of broad-based employee ownership employee stock ownership plans otherwise known as esops worker cooperatives and employee ownership trusts which are less common and newer to the u.s today you'll hear us discuss esops and work cooperatives they are different in structure from each other but they both offer employee owners tremendous benefits in terms of quality jobs and asset building so we have a powerful and engaging agenda for today i will briefly introduce our speakers our project equities co-founder hilary abell will present the evidence-based case for employee ownership and why it's a powerful tool for addressing working poverty and well income and wealth inequality ren bulgarian employee owner with a slice of new york will share his story we'll have an engaging conversation with leaders from philanthropy and local government who have invested in employee ownership they'll share why they've invested it and what they've seen over the years in terms of progress in the movement and then we'll have some time at the end for questions and answers so if you have any questions we encourage you to put them in the chat and we'll pick a few at the end to address to our speakers so our conversation that we'll have later on in the in the webinar will feature diane ives from the candida fund as our moderator gene wardford from the kellogg foundation jordan klein from the city of berkeley and christina correa from city community investing and development so the first part of the webinar hillary abell is going to present the case for employee ownership project equity's recent white paper that goes through the over hundreds of studies that document the major benefits of employee ownership for businesses workers and communities hillary will share some facts and figures and charts from the uh white paper that show the benefits on you know business growth and profitability on worker well-being and asset building and wages and benefits to the community and she'll also share some stories of employee-owned companies so i'm going to turn it over to hillary now who's going to tell you share a little bit about the story of recology provides waste management or as they call it resource recovery services they're one of the greenest waste management companies you can find all up and down the west coast they have nearly 4 000 employees and are employee owned one of the beautiful things that they have done for their community was the recology recoveries policy that they implemented early in the cobit 19 pandemic so for several months they guaranteed full pay and benefits to all of their employees even if they didn't have enough work for everybody that's just one way in which employee-owned companies support their communities i also want to tell you about mandela grocery cooperative in west oakland which is a food desert they've been around for about 12 years now they're a black-owned co-op in in the community of west oakland which is a historic black community that suffers from a lot of challenges including lack of access to fresh food this is their general manager andrea talley at the farmers market talking with one of the black farmers from whom they purchase they do a lot of local purchasing so in addition to being open as an essential business and adapting for their workers and the community's safety they created a new program to provide to help elders in the community do their shopping without having to come into the store so they created online ordering for the first time and knowing that a lot of elders would not be able to be ready to do ordering online they also created an outreach program where volunteers were calling um elderly people in their community taking their orders and then bringing it to the store and and getting that food delivered to them their sales have increased 35 so we're hoping that um the company will come through stronger than ever that is the most studied way that employee ownership benefits society is through creating stronger locally owned businesses the democracy at work institute did an analysis a couple of years ago that compared the profit margins and worker cooperatives in several industries to those in other companies in their same industries and the profit margin of those cooperatives was almost nine percent higher than their peers there's been many studies in the esop sector on this issue one by the national center for employee ownership showed that sales and employment grew two percent faster each year after the company became instituted in esop than before there's also ample evidence that employee-owned companies provide better wages one of the studies that i was excited to find very recent one was the first large-scale national study of worker cooperatives in the united states and it was done by the democracy at work institute and the university of wisconsin at madison and one of the exciting data points was that they found that employees in these cooperatives were earning two dollars more per hour than they had in their previous jobs similar data has come from large studies of esop companies one found that the esop employees were earning 53 more than employees in other companies truly truly dramatic and in my own work prior to co-founding project equity in 2014 i had worked with home cleaning cooperatives in the san francisco bay area we did very rigorous impact measurement and actually found that the family incomes of the women in these companies were increasing by 40 to 80 percent so their individual incomes were doubling and tripling but the family incomes were growing dramatically as well which is really um the most powerful measure of economic stability and security we've also found that employee ownership has has wonderful wealth building benefits um we've referenced the racial wealth gap and one of the groundbreaking um studies done in recent years focused on that it's called building the assets of low and moderate income workers and their families the role of employee ownership it was done by the rutgers institute for the study of employee ownership and profit sharing and funded by the kellogg foundation and you'll hear from gene who had a lot to do with that shortly the findings were very exciting and this chart in in the case for employee ownership i took data from that study and compiled it in this format to show uh the breakdown across um genders and races of the savings not only in the esop retirement plan so esops are fundamentally retirement plans and those stock the value of that stock doesn't get paid out until the person retires but there are other things like profiteering and other benefits during their time in the company it's also true that esau companies are much more likely to provide 401ks than other companies so the combined retirement savings i'm just going to give you the example of men of color in this study were dramatically more for black men they were 232 000 for latino men 270 000 and this compares to the the poultry almost non-existent less than one thousand dollars for the median black or latino man worker in the united states i want to speak now a little bit to the community benefits of employee ownership which are too many to name but you can read about them in the paper you can you can talk with any of us on the call or any of the other wonderful organizations that work on employee ownership about the community benefits one that was studied recently is the benefits for formerly incarcerated employees so a professor named robin cox published a paper this year called the role of broad-based employee ownership opportunities in prison or re-entry and found that the formerly incarcerated workers who were working in esop companies had 25 higher annual income very very substantial than their their peers other folks who had been incarcerated and were working at firms that were not employee owned we know that there are so many barriers for folks who have been directly impacted by the system of mass incarceration in their country as they as they come out and look for work one of them is not finding part not finding work at all or not finding full-time work so it was also really meaningful that the these workers had nine percent more hours each week than um non-esop employees and of course by virtue of being in an employee-owned company in this case they were esop esops they have higher wealth building potential over time so this was really exciting data i think this issue had never been studied before and states a really clear benefit for all of us in society i want to wrap up by speaking about the the broader societal benefits especially in the context of an economic crisis like the one we're living right now there is lots of data over many decades ranging from mondragon the largest cooperative complex in the world which did not lay off a single worker during the great recession they had a large company close but they moved those workers over to others of the companies and their conglomerates so extraordinary example in spain but this data is actually from the united states a large study of esop companies compared to non-esop companies looking at layoffs in those companies over four different years and the gray bars here are for employees who are not employee owners just in typical companies the blue bars are for employee owners in employee-owned companies and as you can see the difference is is really dramatic i want to draw your eye to the year 2010 where the layoff rates among employee owners were a quarter almost a quarter of the layoffs among the broader population and in that year there was another analysis that showed that these layoffs that were not done by employee-owned companies saved the federal government 37 billion dollars so that is an amazing value proposition for our government to invest in employee ownership which which it does through some tax advantages but one of our opportunities today is to encourage our government at every level local government state and federal to do more to advance employee ownership and the business case is very strong because it actually does save the government money on the other end when they don't have when the government doesn't have to support folks who lose their jobs so i'll wrap up with just a few comments of some of the highlights of the end of the paper um really the message that you're you're getting already i'm sure from our conversation today is that there couldn't be a better time to to accelerate the the uptake of employee ownership to create economic resiliency we need it now more than ever the opportunities are greater than ever right now and the the paper talks about some of the ways that people in philanthropy and government some of whom you'll hear from today are helping to advance and accelerate the uptake of employee ownership and it ends with um you know kind of a call to action for all of us there's there's something everyone can do to promote employee ownership and some of the recommendations specifically that we have are to get involved in government engagement and and policy work to embed employee ownership into our economic recovery um also if you if you are if you don't fit into any of the categories we're specifically addressing today you can do a lot just by spreading the word and we encourage you to reach out to project equity to others on the call or to other organizations involved in the space to find out how you can help unlocking capital both philanthropic and investment dollars is also key to raise awareness and to reach more businesses and we also need to accelerate proven methods of transitioning businesses to to employee ownership um you'll hear from from ren bogiern in just a minute about how his company transitioned well or what it was what it's been able to do after the transition um there are many great organizations that work on this type of work and helping us accelerate that um during this time will do a lot to help businesses not only survive the current crisis but also thrive afterwards and finally this is a unique moment and we we do need innovation so we're really encouraging everyone to get involved in finding new ways to incentivize we're actually working on a business continuity loan fund with incentives for employee ownership or that would enable companies to set up partial employee ownership if it's not the right time for now if they just need to get through the crisis but they have a chance to be strong on the other end we're finding new ways to help them do that when we get through the crisis so i want to um yeah thank you for for walking with me through some of the data and now i'm going to invite my friend ren boheren to join me on the screen um i've had the pleasure of working with ren for about four years we helped his company a slice of new york transition to become a worker cooperative in 2017 and um they've done incredible things since then including not only surviving but actually um you know really innovating and managing to thrive in the midst of this pandemic so ren i want to welcome you and and just start off by asking you to share a little bit about how a slice of new york has fared during the koch 19 pandemic right hello everybody pleasure to be with you all today and uh you know it's been a crazy time for everyone i would say but it's a time where we all have to learn to adapt so even before shelter in place had gone through uh my colleagues kurt joseph and i all proactively met like a band to make a decision to prepare for a shutdown so once the shutdown actually hit the key moves that we made were to stop selling slices to reconfigure the layouts of our shops as well as stop dining the main goal of this was to keep everyone safe now this was a definite hit in our profit and loss statements and to add to damage we lost our lunch rush due to shelter in place and had to eliminate items such as salads and tap the beer from our sunnyvale shop but what we found was that people were ordering anywhere between two to four whole pizzas at a time between four to nine o'clock with at least four to five lines and hold at the same time would wait times up to almost two hours so we had to collectively rewire the way both our shops functioned in terms to find a recipe for success and a streamlined process and one of the coolest things that actually happened was one of our owners as well as our non-owners collaborated together and proposed that we should make a personal tenants pizza that could be taken out fresh or taken home frozen so that we could minimize that loss between not being able to sling slices out to our actual guests wow and your name is a slice of new york and i think the tagline is new york pizza in the bay area so i know that slices are a big deal for you guys so that really shows a significant adjustment and a lot of um innovation it really does and you know coming back to the prof and lost statement you know we were learning a lot through our uh data analysis angela is our cfo and she was collaborating with us to help us take a look at the key performance indicators kpis that were generating profits for us so anywhere between how many pizzas we were actually selling what kind were they uh what should we be prepping on and focusing on in order to have a more streamlined refined process and to actually prepare for one big massive dinner rush rather than uh just waiting for the time to pass by we had to reallocate all of our hours what i think that was one of the coolest moves we're trying to provide in terms of live data analytics for both shops is to get the key data points that our crew would like to know by simply using an ipad or a tablet in order to understand what is making us profitable and um you know what we found is when people are seeing what we're losing in profit they want to find out how we can drive the profit back up by actually seeing you know where where are we actually making the sales at and where can we compensate wow yeah that's really i think one of the greatest promises of employee ownership is that it engages everybody across the company and it makes everyone more successful now speaking of profit i have to say i love hearing you talk about your p l and your kpis and all of that because part of what organizations like us do is you know business financial literacy and it just rolls off your tongue um you know tell us about how that that's turned out for you today you know how are things looking in august for a slice of new york um after going through the pandemic you know it was really rough and grim between march and april sales had plummeted down about 20 to 30 percent but they slowly picked back up to where they were in february um after relocating our cruise schedules and finding successful hours to capitalize on for a dinner rush uh on top of that too you know we were thinking of the well-being of everybody else and we provided uh hazard pay after having a very inclusive dialogue with our crew within the first few months of seltzer in place but then we had another dialogue after that to really see if we wanted the profits to go back into our pockets personally or if people felt that the money should go back into the business and that dialogue ended up being emotional and heartfelt because everybody wanted the profits to go back into the business because that's what was keeping them afloat well it's it's extraordinary to hear about that that kind of win-win mutually supportive relationship between a company and it's and its workers and its worker owners i i know one incredible example of that is that you and all of your co-workers right now are are taking the week off it's a paid week of vacation for the entire company and you've shut down operations so tell us a little bit about that yeah so um you know honestly after having a big conclusive dialogue again you know this dialogue allowed us to be supportive realistic adapting and also acknowledging each other the fact is as a board we decided to give our whole team a paid week off because everybody was physically mentally and emotionally trained and we knew that if we didn't take care of each other then we wouldn't have a business we value our crew way more than the profits that we'd rather take a calculated hit loss than actually wrecker crew yeah and you you have been a quite profitable company overall and i i know that you and and kirk your general manager and the original owner of the company have shared that in 2018 and 2019 your first two years after being employee owned you distributed something like three hundred thousand dollars each year in profit yeah which is quite remarkable you know a company of 30 some employees that's that's really really meaningful um so we'd just love to recognize that and say that we're all looking forward to the day when you guys will be doing that again and i'm glad that that you know former strong state has helped you get through helping you get through this crisis um and ren i'd love to end on more of a personal note so i've you know having known you for a few years i think you've given some great examples in this conversation about how you serve on the board you're clearly a leader in the company you've started other efforts on accountability and culture in the company um so i've really seen how employee ownership has given given space and platforms for your leadership which is which is really inspiring um but i'd love to just end by asking you in your own words what has being an employee owner meant to you taking a lot of thought into this during such a rough time i think what it means to me is that becoming an owner has allowed me to have purposeful adaptive transformative growth and enrichment which i'm truly thankful for because through all these challenges my team and i can actually collaborate and support each other and all the issues that we're going through in order to build a community enriches each other for the long run and that i feel is one of the truest and biggest blessings to be able to work together and not butt heads and to actually find common ground to help each other succeed we really we all need that right now ryan thank you so much for for inspiring us and for being part of the conversation today cheers much and thank you for the time if you all have questions feel free to inbox me i'll be able to answer them terrific thank you and with that i'm going to hand it over to another good friend of of project equity and of employee ownership um diane eyes of the candida fund has been an incredible champion for employee ownership and she is going to facilitate our panel discussion welcome diane thank you so much that was so fabulous it was just wonderful hearing from ren and hillary thank you for inviting me on board here for today um the candida fund has been supporting community wealth building since 2007 but last year we made some four significant grants totaling a total of 24 million dollars to four organizations that are advancing democratic employee ownership across the united states the purpose of this was to raise awareness for alternative models of community wealth building in america while empowering thousands of workers who have traditionally lacked economic security the focus is on transitioning existing small and medium-sized businesses to democratic employee ownership to stem the tide of business closures and give employees a chance at ownership as rand so perfectly demonstrated our partners for our grant making our project equity the fund for employee ownership at evergreen the ica group and nexus community partners the focus among our grantees is on this concept of socializing democratic employee ownership which is part of what we're talking about today as well as building the pipelines of potential businesses funders and investors so i have three fabulous panelists here today colleagues and friends that i'm happy to introduce gene wardford is a program officer for family economic security at the wk kellogg foundation she spearheads kellogg's field building investments in employee ownership including research awareness raising and technical support for small businesses that are transitioning into powerful employee-owned companies christina korea is a vice president at city community investing and development she's a member of the asset funders network and leads cities investments in employee ownership as a tool for supporting small businesses and narrowing the racial wealth gap and jordan klein is the interim director of the city of berkeley's department of planning and development in his prior role as berkeley's economic development manager he led the city's groundbreaking program to preserve small businesses and build community wealth through employee ownership so welcome to all of you i have a few questions for you and um next to no time to have you answer them all so i know you're going to be smart and fast with all of these so the first question i just kind of want to put out to all of you is um a little bit about the journey so what led you to make employee ownership a priority and invest in it as a strategy and also how is it relevant now in light of covet 19 in the movement for black lives um and gene maybe i'll start with you thanks so much diane um it's always great to see you and be on a panel with you and have as well as tina and now meeting jordan um this the work is so important and um all of you really have been leaders in this work and so it has been really a great opportunity for us to really collaborate and join together and leverage this work employee opportu ownership really has provided an opportunity for businesses to leave legacies in communities but also to save jobs and at the foundation our our real interest in pursuing employee ownership was directly tied to workers workers with families and particularly those families that have small children how do we close the racial wealth gap for those families and so we have been looking at different ways and different strategies and you know we listened to the information that hillary shared with us earlier this is right on target you see employees with higher wages living wages short-term wealth as weather as well as long-term wealth through ira uh um before and 401k programs and so i think that this is just really um you know it's while it's not a novel idea they've been doing it in other parts of the world um for years um that this is something that really momentum is starting to take off um for employee ownership how do we uh support those businesses who are actually hiring people who live in communities um how do we support um the transfer of wealth to those employees they see those jobs um the real estate is staying in the community and so you know i think it's really important and i think that um while we have always been focused on um racial equity that this even lifted has lifted this work up um and made it more visible um and that much more critical um to what's going on in communities right now particularly with black lives matter because this is really giving um individuals an opportunity to say how do we move the needle for poor people for black people for brown people um and so we really are um while we're excited that we have this opportunity we also know that it's a challenge and it's a lot of hard work ahead of us but i think people really are positioning themselves and particularly those people and communities to become more empowered um so employee ownership for us is just one of the keys i think to unlocking that wealth thank you so much that was great i appreciate it jordan you want to take the same question sure thanks diane and uh and thanks to my my fellow panelists and thanks to uh project equity for inviting me to participate in this today uh it was really a perfect storm of a bunch of different factors that led to the city of berkeley investing in worker ownership uh we had project equity and um and also sustainable economies law center which is an oakland-based economic justice organization um leading grassroots efforts to educate policymakers and community members about the value of uh of worker ownership that was such a crucial element and that i think led to another important factor which was political leadership we had um then council member now mayor of berkeley jesse adeguine has been a very passionate and very effective and vocal leader for uh to an advocate for work ownership really important for municipal for a municipality like ours to have that kind of political leadership and then we also had real alignment with our economic development goals around small business retention and equitable economic development small businesses in berkeley like many uh urban areas around the country have really been struggling over the last couple of years with being squeezed on both ends they've got increasing operating costs and they're increasing competition especially from from the internet for retailers um and and other really existential threats that are that are threatening legacy and long-time businesses um to go out of business and as a economic development agency it was our job come up with strategies to help them keep their doors open we partnered in 2016 with the bay area organization of black owned businesses to survey and outreach to black-owned businesses in berkeley to learn about what the what are the factors impacting them what kind of support did they want to see from the city of berkeley and one of the things we heard was we need help with succession planning we have business business owners who are aging out we need help figuring out what to do so when we conducted a request for proposals to recruit economic development partners um to help us come up with small business retention strategies and then project equity applied it was like a match made in heaven it was all kind of lined up and came together uh for the second part of your question diane um i mean obviously i think this is more relevant than ever in the era of kovid um you heard from from hillary about all the evidence that shows that working on co-ops are are more resilient and more able to withstand crises and um amidst this incredible movement for black lives as we see so many people in the country kind of awakening to the reality of white oppression in so many facets of our society and especially as gene talked about disparities in income and wealth um you know amidst that so i've spent my 20-year career in planning and community development here in the bay area which is of course a bastion of progressive values but we've got the disparities here as well and as a planner my whole career i've been asking myself why does economic growth and neighborhood improvement always seem to have to come along with gentrification and displacement as well how do we pursue economic development that reduces disparities in wealth and income for black and latino people and their families and we've got in the bay area we've got all the policies all these progressive policies like inclusionary zoning and these robust workforce development systems and career pathways we got community benefits agreements and yes still we have these these disparities and um worker ownership of the as i've learned about this strategy and as we've started this work it's i've been so excited about it because i see it as a strategy that doesn't necessarily require a huge financial commitment from governments but it has the potential to produce really huge results so again more relevant than ever now yeah jordan thank you so much for that that was so helpful and i just want to commend the city of berkeley for being such a leader in this and and digging deep and not looking for the silver bullet which they're not going to find so thank you for that tina what's your journey i appreciate it um i just want to reiterate everyone's thanks to project equity hillary and annalisa and the team thanks rendell for your amazing account of your experience and diane gene and jordan just always a pleasure to be with you and um so much of what you already said resonates i know time is short so i'll um just pick up where where we were and um you know i think in this moment we're really proud at city that we've been investing in economic empowerment and ownership in the black community for years and alongside many of you especially eugene in the last five years we've been even more intentional and targeted in these partnerships we know that the racial wealth gap exists and is widening it can't be ignored that in the last several months have underscored that these communities cannot be ignored and are disproportionately impacted uh and struggle to gain equitable access to capital financing and other opportunities within this realm so we're fortunate to have long standing core collaboration examples and in addition including the asset building policy network which was formed in 2018 2008 excuse me and chiefly utilizes a racial lens to inform programs and public policies especially those which impact low-income communities of color focus on the racial wealth gap and as you were mentioning jordan focus on anti-displacement of small businesses as well so as another example you know we've expanded our portfolio around six years ago to really include organizations that were unapologetic and talking about race including the democracy at work institute which hillary mentioned and it's specifically at dowie it's legacy business investment fund which preserves long-standing or legacy small businesses um especially black owned businesses who were in danger of closing and together we've worked with dowie the legacy business fund and the national urban league along with its entrepreneurship centers we focused on a strategy that would combat closures and address the racial wealth loss that you all at project equity along with dowie democracy collaborative and others helped develop a few years ago to model some of this work out so again so grateful for that contribution to the field and to be a part of it so just lastly i think you know acknowledging um what has been said black businesses make up a really significant and material portion of owners nationally play a huge role in our economy as we all know but the values of those businesses comparatively are often low this is in no small part due to historical patterns of owners being shut out of capital markets and you know not receiving equal access so i think with employee ownership in particular there's an opportunity for white owners to instead of concentrating wealth in their family or in you know private sector investors might sell the businesses to their employees many of whom may be of color and already run and know the business in every aspect and are contributing um you know tremendous gains every day so these types of ownership conversions can further economic power among black under-operated businesses and we think they hold tremendous promise in this moment right now with the closure rates being you know as high as they are i think 41 percent of black owned firms have seen closures according to the national bureau of economic research that came out so it's really certainly um a moment to be having this conversation and again appreciate being a part of it thank you so much that was great and i you know you're the way you said that like you know it's a moment to be having this conversation i want to acknowledge that all of you are so um conversant in this language and talking about it but some one of the challenges that we have is that we need to socialize this idea um more broadly and so i'm curious if um if you've had any pushback on the strategy or how you approached talking about this work in a way that brought along your colleagues and perhaps some of your detractors um jordan you want to start yes absolutely because the pushback is there i mean from the municipal perspective we've got businesses um who might be skeptical about uh seeing their city investing in worker ownership just because they don't you know i don't want to sell my business um and so we have been really careful and thoughtful about how we communicate to our business community about this and i want to thank project equity for their patience and partnership in that work you know we had we sent a letter out to business owners around berkeley of a certain age and i think we went through like six drafts of that letter going back and forth just to make sure that we're choosing the right language that shows the businesses that we value them acknowledging that work ownership might not be the right solution for everyone but at the same time while trying to get the value and opportunity across to them there's also i think skepticism that just comes from a lack of familiarity and you know lack of knowledge about work ownership you we we talk sometimes about the um the myths of worker ownership and and selk sustainable economies lost center has been has been a great partner about this like these myths like oh every decision you make has to be through consensus and there are no managers allowed in worker cooperatives and so people these myths are out there and so we we take time to educate people in our community about that and that goes a long way that we've really incorporated that into our pro our initiative in berkeley um with partnership with project equity and so we um we put together a workshop where we educated um staff not just in the city of berkeley but we invited staff from around the region economic development and planning staff from around the region to come participate in staff in our finance department to really educate people about what what like the realities of worker cooperatives um and we and and project we put together great materials customized for the berkeley context that we can use every new economic development employee that we hire is going to have access to these training materials so they're going to you know in their first week on the job they're going to learn about worker co-ops that's great thank you so much tina how about you i mean you're coming from a big company right i'm curious like what what pushback you might have seen or how you went about socializing this like socializing yeah a great question thanks diane i mean i think strategically we didn't want to go it alone and we didn't need to luckily um the need is so much bigger than us so we really collaborated and cohesively developed these cross-functional cross-sectoral strategies really with cerna ford and kellogg foundation to be thought partners with us um we're also you know grateful to the candida fund for putting your sake in the ground so uh thank you diane and especially to eugene who's been alongside us the entire time coming up with the approach and um really working across the funding community to to put our ideas in motion and and catalyze new effort so i think it's more powerful to think and invest really as this kind of a collective than on our own and we wanted to model the types of employee ownership investments that can accelerate what has already been done and really also to push that conversation on both race as well as gender and even think about intersectional um ownership in certain industries like within child care and certain other care industries specifically all within the context of employee ownership um so you know i mean i wouldn't say we had pushback internally i think instead we did really recognize that we had um a unique role right we had to consider as a financial institution what was our um sort of purpose here and potential value ads since we didn't actually finance the conversions um but what we did do was we held convenings with our nonprofit and cdfi partners around how to finance deals specifically you know requiring those requiring more complex arrangements or sort of know-how and transactional assistance at bankers cdfis and other financiers could get more familiar if they weren't already um and our colleagues took our calls internally and and one of the really interesting things that we did was explore which businesses in our group could take advantage of um some of these services so we worked with our m a lawyers to lead pro bono engagements with our nonprofit partners on fund structuring on how to position employee ownership and provide that legal framework and advice so that the black businesses who were working black owned businesses who were working with the fund would essentially have the benefits of the same tax credit that perhaps um their white owned firm counterparts may have have had in the past or you know may have been familiar with through their advisors we wanted to make sure um that everyone had had access to that knowledge and that expertise so again we engaged our business to lean in with us and to bring the full weight of our expertise and resources and relationships not just you know write a check from the philanthropy side but essentially try to to bring all the resources to bear and collaborate among many players because we all have a hands on this and i think a lot of the you know funders come at it from a different angle there's so many lenses to this work and it's so robust and touches so many areas of policy and of um all of our lives including the employee owner's lives so i i just think that it has been incredibly helpful to have that collective and shared shared sort of view on how to promote this work thank you so much i love the this notion of you know like addressing the why with the how i mean i think that's really important that you that it's not just like yes we should be able to do this it's like no here's how we have to do it um i think that's great so we just have a little bit of time left and i'm going to try and squeeze into more questions for y'all um and one is just real quickly um what successes you're seeing in the field thus far i mean i know it's still early but i'm just curious if you could like you know real quickly just give us an example so jordan successes in berkeley yeah many layers of successes from our partnership with project equity uh the education piece i talked about um already um the data analysis the project we helped us look at the data about our business population we glean a lot of knowledge and information about that um there's the the outreach um to our business community i think there's a huge value in a municipal organization reaching out to their businesses we reached out to a thousand businesses through our partnership with project equity again while work our ownership isn't necessarily the right solution for every business i think just the value of the businesses hearing from the the city that we care about them we're thinking about them this service is available to them that's a real that's an outcome and and it's important um and then of course there's the actual the that the outcomes with the the business that we are working with we um we've had i think a couple of dozen businesses indicate that they're interested and have engaged in consultations with us around what it would mean to transition we've had a handful of businesses move forward with the feasibility analysis that the city of berkeley's helped to subsidize um uh so analyzing what it would mean to transition to working ownership and we've had one business complete the transition uh to work our ownership with in berkeley um and of course the outcome for those businesses all of their employees it's it's really uh robust and exciting excellent thank you so much for that gene how about you successes have we lost gene i think we may be having some technical difficulties okay i'm gonna i'm gonna just keep us moving and if gene comes back we'll ask her about that but of course in the like the nanosecond of time that we have left the biggest question of all is like where do we go from here and how do we scale um jordan you want to take that one and then we'll get tina and then hopefully we'll get gene back sure i mean you know real quick i think there's room for growth via both top-down and bottom-up approaches i think that um you know we i would love to see the federal and state governments around the country doing more to incentivize um you know support worker cooperatives through through incentives and i think hillary talked about this earlier i think there's a real strong case for that and also redirect existing resources towards economic development towards the worker cooperative model i think we're seeing such results such great results from this model that it makes sense to do more investment and then from the bottom up you know the berkeley example you know um educating policymakers doing the storytelling when people hear the stories about from worker owners like ren told his incredible compelling story dude that storytelling is so valuable and when you do that i think municipalities around the country will want to make the investment to um build this to build a program locally thank you so much for that and just tina before you say anything i just want to remind people if you have questions put them in the chat um because we're going to switch to q a really soon but um kind of where do you see scaling opportunities in the work great thanks and and thanks jordan for that context around um the municipal work because i think that is an area where we really see a burgeoning interest and capacity and we were fortunate to work with the national league of cities and dowie around a program called the shared equity and economic development fellowship so you know um you covered it i don't need to to go into dust but i think just bringing those the full capability and scale uh from the municipal lens is a huge asset that's that's burgeoning around the area um i think first you know we should do more to save existing black owned businesses that are right from play ownership conversions now we should step in to do everything and anything we can to prevent closures and convert them as soon as possible and really make those tools to do so more scalable more nimble and tactically speaking i'll say what i mean by that i think accelerating the transition in the transition timeline taking conversion projects in the pipeline and really helping to finalize and convert them to deal flow to pair with lenders to pair with ta providers and others is really critical and a few of our non-profit partners especially project equity and the working world who is also a cdfi institution among others have done this effectively through use of not only technology and um you know tools like you know standardized mechanisms to look at company value to understand the context of of decision making in terms of data around their business and how it relates to others in the industry et cetera and pairing that information and those tools with direct hands-on assistance to selling owners and acquiring employee owners is really powerful and i think we just need to get you know um sort of quicker models for how to do all of those things that are inherently time intensive and and can be complex but there are ways that that a lot of this can be rolled up i think and done in a in a more holistic way that also recognizes the unique uh business you know concerns and needs that every company will have uh third i think expanded analysis and mapping of the businesses that would be a good fit for transitions and conversions so the field is advanced i think we've moved away from the conversation about employee ownership awareness building well of course no not everyone will know about every option when selling or thinking about retiring or selling their business you know i think we really now are at the point of more so honing and building that business case on an individual level um and and yet there's still more to be done about getting granular and specific businesses will have their own process and procedure around that um but we're getting there so i think that's really um exciting and then lastly from a donor perspective helping new entrants to the field you know among investors and others who want to be involved in these transactions and projects as hillary mentioned earlier to understand the landscape of players you know who are the ta providers how do they work together who's really invested in aggregating capital structures and what are some of these new models that even in the last two or three years you know diane you've done so much in this regard and um the federal home loan bank and others that that work with with you all to really make different types of capital available and to make it kind of cohesive and nimble and fit together for a project structure and what the needs might be um so how does this connect to a broader agenda that may align with other funders priority areas you know some may be interested in employee ownership as a tool to promote quality jobs well you know hillary made the case very clear you know this really has an income boosting effect as long as well as an asset and wealth building effect so how do we do that but at the same time some funders may be more interested in the business case and directly investing in those companies so i think there's an opportunity to open a tent for greater participation among more interested donors and capital providers and that um you know the next stage is going to be a really exciting one taking what we've learned and scaling that up in a major way that's wonderful thank you so much and gene your timing is perfect you're back to give your elevator pitch on how we can scale what comes next for us i well um i'm really sorry about um technology you know when it works it's wonderful right maybe my uh laptop is all zoomed out but i think that there are um a couple of ways that we really can begin to scale and i don't know if you already covered these and so please you know forgive the redundancy if you have um about how we can work with not only local and state municipalities to understand what the economic advantage is to their state if they really begin to invest and support transitions to employee ownership um as well as i think there's a big role for the sba to play um in terms of you know with the main street act that passed i think it's been almost two years now um and we have not seen that really um implement it and i think that that's also another way for us to uh begin to build in some capacity um and some momentum um nationwide if we can get um those entities really involved in this movement because we what we know is is that it's not going to survive on just the backs of philanthropy we need um you know municipalities and government to become partners and this is not a opportu this is this is an opportunity for them to reap some economic benefits as well um with businesses staying in their community than being able to keep jobs there it can help them toward their economic development goals in addition to their tax base so there are a lot of benefits for doing this this is not a program where we're asking for you know handouts we're saying that if you support this work it will benefit not only the states and the cities but it will benefit the people who live there as well thank you so much that was great you really kind of took it to scale in a very short period of time i love that thank you so much um annalise i think we're going to turn it back to you in case there's any questions from the audience thank you all stay on don't don't turn your cameras off wonderful thank you so much so we don't have a lot of time for questions but one came up about what policy recommendation if you could make a policy recommendation to congress to support this work what would it be um so i i invite any of you to chime in on that question uh i can i can just throw out a a response to that and it will address one of the other questions that came in um so several months ago uh project equity was was talking to some national policy organizations about ideas that we thought would would foster employee ownership as part of the pandemic survival and recovery and one of those was very similar to the temporary employee ownership act that was introduced by senator johnson recently which involves providing grant funds from the federal government to facilitate the establishment of esops we would want to see it applied to worker cooperatives as well but i think the paycheck protection program made a really good case that the government and society can have an interest in actually subsidizing in a short-term way something that does create benefits in the long term so i think it's worth all of us checking out that new act and and considering supporting it um at the state level i do think that awareness raising and the federal government can support this as well as gene said through the maine student employee ownership act so getting getting the word out because the infrastructure is there to support these transitions so getting the word out is really critical and funding for example state employee ownership centers are similar programs that raise awareness and also it's it's pretty widely embraced by the field the notion that one of the key things for uptake of employee ownership is tax incentives for selling business owners and those exist at the federal level those could be improved i think to be more accessible to more businesses and smaller businesses including worker cooperatives and they could also be put into place in more powerful ways at the state level so that's another thing i think we should all be considering great thank you um anybody else want to weigh in on that one if not i have another question i can throw out there you know one thing that we've talked about berkeley haven't quite haven't sealed the deal and finished gotten across the finish line yet is a is a purchasing preference so when we go out for bid um on any kind of service give a preference we have an existing preference i think to for women and minority owned business extending that same preference so it's like bonus points um for worker-owned cooperatives and i think instituting that at the federal level would be would be a powerful thing thank you a question came in asking if business owners always lose money when they sell to their employees as opposed to selling to another individual or company um who wants to answer that one it's a short answer the answer is no they definitely do not always lose money and sometimes they can even do do better but our general educational information that we share with business owners and people who interact with business owners is that owners generally can get a fair a fair value a fair price that would be pretty competitive with other other purchase offers with the exception of maybe a strategic buyer or someone who just wanted to buy it at something above market price for their own reasons and we all know that um private equity firms for example are you know potentially really gonna take advantage of the current crisis to buy companies in ways that will further consolidate well and we believe that there are opportunities potentially to to work with private equity firms to to mitigate some of that impact um and more importantly to outside of that landscape to be to be getting businesses uh buying businesses for prices that that are fair perfectly fair to that owner and often very competitive with other offers thank you so much hillary so we only have a couple minutes left i'm gonna share a few concluding thoughts and then um we do have a couple minutes to stay on to address some additional questions so folks want to hang on for that you're very welcome too um i just want to thank jean and jordan and tina and diane and fran um for joining us today and contributing your thoughts and experience and expertise to the conversation um so we're in a moment where crisis has created opportunity to do things differently we know that we have to address the problems of working poverty and wage and wealth consolidation that has created so much wage and income inequality in the country we have to think big and outside of the box to solve these problems and you know here we have a new idea that really isn't new at all it's been proven and it's tested it's just not very well known or understood and you don't find that every day but what employee ownership offers us is a way to structurally embed equity and resiliency into the workplace into small businesses and thereby embed equity and resiliency into the broader economy that small businesses fuel so we know that small businesses employ about 50 percent of the workforce in america and we know the small businesses of today become the big businesses of tomorrow so how do we move employee ownership from a best kept secret to the new business as usual and how do we take this moment of this twin small business closure crises of the silver tsunami of retiring baby boomers and covet 19 and turn it into an opportunity to build worker wealth for the next generation of um you know workers and workers of color and low-income workers and so we need you to help us do that we need you to join this movement um we need you to continue this learning journey that um you've been in on employee ownership that you've joined in with us today we encourage you to read the white paper and share it with as many people as possible and also to please consider how your organization can join us in this movement to help us scale employee ownership so thank you so much for taking time to be with us today and to learn more i encourage you to connect with project equity with our speakers and with our peers in the movement many of whom are mentioned in the white paper which is attached as a handout to this webinar and also available on project equity's website so thank you thank you so much and for those who want to stay on and if any of the speakers have a moment to stay on i'll probably just throw out one or two more questions for us to address