The Cooperative Fund of New England

by Rebecca Dunn

The Cooperative Fund of New England (CFNE) was founded in 1975 by co-op activists and social investors as the first lender to provide financial and technical assistance to food cooperatives in the Northeast. During the next three decades, CFNE expanded its focus to include different types of cooperatives (housing, worker, producer, etc.) as well as employee-owned businesses and community-based nonprofits. One thing all CFNE borrowers have in common is that they provide basic human needs such as food, shelter, health care, or education. Further, the Fund’s mission statement specifically notes a priority to serve people of low income. Borrowers share the vision of CFNE and its investors: an economy that supports equality, justice, and social responsibility.

CFNE is proud of a 30-year track record in which no investor has ever lost a dime. The Fund has shown that the cooperative model, when adequately supported, is a viable form of economic development and can act as a social change agent to undo systemic patterns that keep people poor. The impacts of CFNE’s loans include the creation and retention of thousands of jobs and housing units throughout the Northeast.

Since its founding, CFNE has lent more than $13 million to more than 375 community-based or cooperative groups. The loans have helped cooperatives launch successful businesses; purchase property, inventory and equipment; expand or relocate; meet cash shortages with working capital; and obtain technical assistance to boost the borrower’s financial or other business capacity.

When Boston-based Red Sun Press (printer of Values) needed new equipment to bring its operations up to date, the worker co-op contacted CFNE to apply for a loan, which was approved. Other worker co-ops CFNE has helped include the 30-year old champion of organics, FEDCO Seeds in Maine, and Collective Copies in Amherst, Massachusetts, whose workers galvanized the college community to help them buy the shop when an absentee owner moved to shut it down.

Another early borrower from CFNE was Equal Exchange (EE), the coffee company that led the way in the Fair Trade beverage industry. Cofounder Rink Dickinson recalls that it was only natural for EE to turn to the mission-based CFNE for a loan when it was trying to get off the ground. “The Fair Trade model is all about buying farmers’ coffee when it’s available. It’s very capital intensive. It takes mountains of cash to buy mountains of coffee this way. From the beginning CFNE was a strong ally, and for many years they were one of the major sources of capital for us. It’s what enabled us to do fair trade. Our relationship with CFNE has been a phenomenal success, from our point of view.”

CFNE’s first loan was to a consumer-owned food co-op. CFNE has continued to be a major contributor to the success of stores that compete successfully with natural food chains because they are organized around cooperative principles and values. Food co-ops—like housing co-ops, co-op daycare and health care providers, worker-owned businesses, agricultural producer co-ops, and community- based nonprofits—have similar and compatible visions. CFNE helps turn those visions into realities.

Today, CFNE is looking at more ways to help move its mission forward. In addition to loans many cooperatives need ‘patient capital,’ or equity. In response, CFNE is seeking investors for an equity capital fund as well as the investment fund.