TFW you have to do a refresher around what a #PatronageRefund is and how it works with several people you're on a #coop board with...

🤣 😭 :TwinPines:

The #PatronageRefund is an important ritual affirmation of ownership in #coops.

I think one of the hardest things for people with traditional biz backgrounds to understand about #coops is that the #coop model seeks to de-commodify the firm.

In particular, that means that thinking in terms of % of #ownership doesn't work, which throws many for a loop. Instead, value is delivered to members as the return of profits that would have otherwise been extracted from their labor or custom, but the value of the firm itself is generally not part of the equation.

#PatronageRefund

@paulfree14 One long-running strategic debate in the #coop movement is around pricing & the #PatronageRefund.

Should #coops conform their pricing to market rates, and benefit their members via larger patronage refunds? Or should they seek to minimize their surplus and move the larger market by paying above-market wages or charging below-market prices, thereby narrowing the margins of their capitalist competitors?

@paulfree14 The #PatronageRefund is the mechanism by which a #coop operates on a not-for-profit basis towards its members in the context of market pricing.

Say a #ConsumerCoop made a 5% profit/surplus last year. If you spent $100 there and I spent $1000, I would get $50 back while you would get $5 in your Patronage Refund.

For #WorkerCoops, patronage is based on labor contributed, of which the simplest formula is hours worked, so if I worked 2x your hours, I'd get 2x your share of the surplus.

@peter @saturno If it fits under this rubric, it counts as a #coop: https://ica.coop/en/whats-co-op/co-operative-identity-values-principles

Key features include democratic member control and operation on a not-for-profit basis towards members by returning profit on the basis of use (the #PatronageRefund).

#WorkerCoops seek to return profit as a #PatronageRefund to their worker-owners on the basis of labor contribution, and there are three variables that are commonly used in the formula to do so: hours worked, W-2 income, and seniority.

What are folks' thoughts on the merits and issues with each approach? I'm working to design a worker/consumer hybrid co-op, and am considering a concocting a blend of the 3 for the worker portion.

See page 7 of this for cotnext: http://www.oeockent.org/wp-content/uploads/2013/05/whatisacooperative-ncdfversion.pdf

@woozle In the #coop world, this is expressed in the nuance between "non-profit" and "not-for-profit".

#Coops are the latter, and strive to produce an operating surplus, which is then returned to members pro-rated on the basis of use via the #PatronageRefund, so they can retain/build capital while operating on a not-for-profit basis towards their members.