Grants will catalyze at least 100 employee ownership
conversions over five years
by Karen Kahn
The Kendeda Fund is making one of its largest investments in its history to dramatically expand employee ownership. Over the next five years, Kendeda will invest more than $24 million via philanthropic grants to four organizations—Fund for Employee Ownership, The ICA Group, Nexus Community Partners, and Project Equity — that are working with communities and businesses to grow local economies and build community wealth through expanding democratic ownership.
Investing in Democratic Ownership
“Small businesses are the backbone of local economies. They ensure that communities are vibrant, retaining the wealth they generate, and are resourceful in hard times,” said Diane Ives, the Kendeda Fund advisor overseeing the grants. “Together, the Fund for Employee Ownership, the ICA Group, Nexus Community Partners, and Project Equity are shaping the future of business ownership in America, and transforming how the public and private sectors — including investors — approach small business succession, retention, and legacy preservation.”
Kendeda with these grants hopes to “inspire the philanthropic and impact investment communities to see democratic employee ownership as a necessary — and profitable — strategy for business growth,” said Diane Ives, Kendeda Fund advisor.
The Kendeda Fund, a private, Atlanta-based grant maker, has three primary goals for its $24 million investment:
- Make communities more vibrant by retaining more businesses and preserving local ownership.
- Improve job quality and confront the racial wealth gap that has long divided American communities and inhibited economic growth.
- Inspire the philanthropic and impact investment communities to see democratic employee ownership as a necessary — and profitable — strategy for business growth.
The grantees are leaders in framing the business succession crisis created by baby boomer retirements as an opportunity to grow a more democratic economy. With the Kendeda Fund investment, these organizations will be positioned to finance and support more than 100 business transitions. If successful, these transitions will serve as a visible model for tens of thousands of business owners searching for an exit plan.
“The Kendeda Fund’s investment dramatically expands our ability to create employee-owned businesses that will anchor healthy companies in the region, improve job quality, and grow a robust and more equitable economy in Cleveland and other communities,” said John McMicken, CEO of the Evergreen Cooperatives, which launched the Fund for Employee Ownership in early November 2018, with support from The Democracy Collaborative.
The Kendeda Fund’s investment dramatically expands our ability to create employee-owned businesses.–John McMicken, CEO of the Evergreen Cooperatives
The Fund for Employee Ownership aims to acquire businesses in northeast Ohio from exiting owners, convert those businesses to worker ownership, and bring some or all of those employee-owned businesses into the Evergreen network. The new businesses will be supported through the Evergreen Cooperative Corporation, which provides back-office services, technical assistance, and support for building an employee ownership culture.
The ICA Group, located in Northampton, MA, has long been a leader in building cooperative businesses that center worker voice, grow worker wealth, and build worker power. With the Kendeda investment, ICA will focus on conversions in two sectors that have shown promise for scaling worker cooperatives: home care and child care.
Nexus Community Partners, based in St. Paul, MN, supports cooperative ecosystems with the goal of ensuring that workers of color own the wealth their labor creates. Nexus plans to focus on conversions in industries that employ people of color, including manufacturing, construction, and health care services.
Project Equity, located in the San Francisco Bay area, is raising awareness among business owners about employee ownership succession strategies and supporting successful transitions that retain legacy businesses and foster and sustain high-quality jobs. With funds from Kendeda, Project Equity will expand its work to scale employee ownership as baby boomers retire to 10 regions across the country.
“Business conversions sit at the intersection of multiple opportunities to build wealth and create sustainable change in our communities,” said Repa Mekha, president and CEO of Nexus. “In addition to business retention and job creation, worker ownership is a powerful strategy for disrupting patterns of gentrification. The model opens on-ramps for folks that very likely have no other entryway to entrepreneurship. In many ways, business conversions are like gifts with the capacity to keep on giving.”
Kendeda, too, hopes that its gift will keep on giving, proving that employee ownership is a path to just and fair economy that benefits everyone, not just a few at the top. As Ives put it, Kendeda with these grants hopes to “inspire the philanthropic and impact investment communities to see democratic employee ownership as a necessary — and profitable — strategy for business growth.”
Karen Kahn provides communications consulting and editorial support for Fifty by Fifty.