Coop Innovation Awards, Congressional legislation and more
Coop Innovation Awards. Capital Impact Partners has announced the winners of its sixth annual Co-op Innovation Awards. The Guild of Atlanta and the Bronx Cooperative Development Initiative each received $25,000 awards; Chicago’s ChiFresh Kitchen, recently profiled in Employee Ownership News, received a $50,000 award.
The Coop Innovation Awards aim to increase co-op development in low-income communities and communities of color. This year, said Ellis Carr, president and CEO of Capital Impact Partners, “we are turning our minds not just to innovative ideas, but also toward ideas that expand the co-op model to more communities that could benefit from it.”
With their awards, ChiFresh Kitchen will be expanding its commercial kitchen; Bronx Cooperative Development Initiative will be launching a new worker-owned integrated pest management cooperative to provide living-wage jobs; and The Guild will be developing an alternative housing model, the Groundcover Community Investment Trust.
Rutgers NJ/NY Center for Employee Ownership (NJ/NYCEO) launches new program. With support from the W.K. Kellogg Foundation, NJ/NYCEO is launching a new program to preserve minority- and women-owned businesses, save jobs and build employee wealth. In response to the COVID-19 economic crisis, NJ/NYCEO, which is a branch of the Rutgers Institute for the Study of Employee Ownership and Profit Sharing, will develop a national awareness-building campaign that will include outreach to businesses about employee ownership succession strategies, online learning programs, and education for professional service providers. Kellogg will also fund scholarships for professors at historically black colleges and universities to attend the Institute’s annual employee ownership conferences. The Democracy at Work Institute will be partnering with the center to develop the online learning programs.
Employee Ownership Gains Congressional Support: Senator Ron Johnson, on July 20, introduced the Temporary Federal ESOP Grant Program Act, legislation designed to recapitalize businesses as they resume operations following the economic shutdown. To receive the grant funds, businesses would be required to grant equity to employees by creating an Employee Stock Ownership Plan (ESOP) or expand an already existing ESOP. In expressing their support of the legislation, The ESOP Association (TEA) called on leaders of both parties to include it in the next round of COVID-19 relief.
TEA has also been actively lobbying U.S. House members to sponsor H.R. 2258, Promotion and Expansion of Private Employee Ownership Act of 2019, a bill that expands tax incentives and federal assistance for employee stock ownership plans sponsored by S corporations. The bill now has bipartisan support from 52 sponsors. Rep. Sharice Davids (D-KS), Rep. Bill Foster (D-IL), and Rep. W. Gregory Steube (R-FL) all signed on to the legislation in June.
Additionally, Rep. Alexandria Ocasio-Cortez (D-NY) has introduced H.R. 6851, a bill requiring “major corporations receiving federal aid related to COVID-19 to make annual payments of equity to employees of the corporation while such aid is still outstanding.” All publicly traded firms would have to make equity grants to full- and part-time employees, in the form of shares, restricted stock grants, or an ESOP.
Finally, the House Armed Services Committee added a provision to the National Defense Authorization Act making it easier for ESOPs to win defense contracts. According to the National Center for Employee Ownership, the two key supporters of this provision are Rep. Joe Courtney (D-CT) and Rep. Mo Brooks (R-AL).
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