For seasoned investors, this rather unique statement can come across like an alien
concept. “Put your money into Main Street?”
What does that even mean?
Whose street are we talking about here?
Why not do what everyone (and their dog) does and drop that hard-earned cash into the traditional financial markets found on Bay Street… or Wall Street? Why Main Street?
Well, I’m glad you asked.
How does investing in something that makes your heart grow two sizes sound to you? Better yet, how does putting your money into the heart of a local community make you feel? If the answer is “warm and fuzzy”, then I think you’re starting to get the picture.
The phenomenon that I’m talking about here is the wonderful world of investment co-operatives. These for-profit groups can work wonders to grow a local economy by supporting community projects and industries, save a beloved small business from closing and keep all of it locally-owned by people who actually call the area home.
That all sounds great, but I’m here to explain how the magic happens – how investment co-operatives can provide stability and grow small to medium enterprises to ensure a measurable economic impact to a community.
Funds From Investment Co-operatives Have the Power to Make Big Things Happen
We’ve all heard of local groups or charities fundraising to help out those in need, but that’s not what we’re talking about here. An investment co-operative is a legal entity that can accept self-directed RSPs and self-directed tax-free savings accounts as investments.
This access to capital is a real game changer, as community members aren’t simply making a one-time donation to a worthy cause.
The money they put in is an actual investment that not only helps their local economy; it could also be a significant part of an individual’s investment portfolio and retirement savings plan.
While an investment co-operative definitely has the power to change entire communities, it’s also not something a local group can simply start up all “willy-nilly” on a wing and a prayer.
This is a real commitment that takes a boatload of administration, dedication and planning – so that means organizing a very committed group of like-minded individuals and forming a board of directors.
Extensive knowledge of legal and regulatory requirements is also essential, so securing the services or experts and consultants is a must-have for laying the groundwork to get a successful project up and running.
If this all sounds like a pretty big deal, it most certainly is. But, once all of the planning, funding and hard work pays off, the results can be incredible. Just take a look at how the following communities have made some pretty big things happen with the power of investment co-operatives.
Making a Real Difference in Local Economies
It would be really easy to simply tell you that investment co-operatives really work. However, it might be an easier sell to outline a few examples of how they’ve impacted communities looking for a way to kick start their local economy – or even change the social fabric of an inner city neighbourhood.
A great example of how an investment co-operative can transform a troubled area comes from the MacCauley neighbourhood in Edmonton, Alberta. A group of community leaders did exactly what my headline suggests – they actually “put their money into Main Street”… or rather, a strip mall on the main drag of their neighbourhood. But, I think you get my point.
For years, the Piazza strip mall in the centre of the MacCauley community was a magnet for violence, drug deals and property crime. Community leaders met with police, businesses and building owners to try and find a workable solution, but had no success with curbing the problems.
They finally decided that forming an investment co-operative to buy the troubled property was the only way to turn it around. With the help of the Edmonton Community Development Company, the good people of MacCauley did just that, and what was once a hub for poverty and negative stereotypes has become a commercial hotspot, with new tenants already moving in.
Rural Albertans Are Taking Advantage of Investment Co-operatives
While the MacCauley strip mall initiative is a great example of an urban community group using an investment co-operative to revitalize a neighbourhood, there are loads of projects happening in rural areas all over Alberta that have made a huge impact on local economies.
Battle River Railway
Based out of Forestburg, Alberta, the Battle River Railway is a co-operative that purchased the defunct, local rail line in 2010 and now offers three core services to the community and surrounding area: tourism, storage and commodity transportation. The railway serves its customers on a weekly basis with three 3000 horsepower locomotives and it’s become a great way to keep locals engaged in their economic development.
Sangudo Opportunity Development Co-op
The Hamlet of Sangudo, Alberta also hopped on the investment co-operative “train” with the help of the Alberta Community and Co-operative Association. The small community located 100km north west of Edmonton needed a jolt of energy and new investment; so local leaders formed the Sangudo Opportunity Development Co-op. The group bought the local abattoir, coffee shop and several downtown lots, with the intention of developing housing for new residents to the area.
I could go on and on (and on) but I think you get the point. There is a real opportunity out there for passionate groups who want to harness the power of investment co-operatives, keep money circulating in their community and make a real difference in their local economy.
At this point, you might be thinking: “This all sounds wonderful, but taking on a major project like this also feels a tad overwhelming! How can I get started? How do I get involved?”
Once again, I’m glad you asked.
It’s Time to Get Involved With an Investment Co-operative
There are a lot of very good reasons to start up or join an existing investment co- operative in your area. You can help a local business grow, keep it locally owned, support its ongoing financial needs, or even save it from closing. It’s true that locally owned small businesses can be a major benefactor of investment co-operatives, but they aren’t the only game in town. Other examples of projects that investment co-operatives have successfully supported include affordable housing, renewable energy, technology development, sustainable agriculture initiatives and community economic development.
But realistically, the sky is the limit. If you’ve got a great idea you feel can sustain and grow your local economy, now is the time to step up. There are multiple ways to get involved – you can form or join an investment co-operative leadership team, become an investor member, or become a community member or volunteer. The level of engagement you can offer is completely up to you, and if all of this sounds like something you’d like to explore, then contact the Alberta Community and Co-operative Association to be connected to a local investment co-operative.
The ACCA can hook you up with an existing group that could use a hand and it can also provide the valuable resources needed to start up a brand new investment co-op.
Remember, small and medium sized enterprises are the backbone of local economies, and there’s no better way to connect community investors with businesses and new projects than a local investment co-operative. Getting involved will not only help sustain a community’s economic health, it will also give you that “warm and fuzzy” feeling we talked about earlier.
So, aren’t you glad you asked about investment co-operatives?