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What is a Co-op?
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co-op award

What is a Cooperative?

A cooperative, or co-op, is an organization that is owned by its members. Co-ops are formed when a group of individuals (organizations) come together to meet a common need. A co-op operates on a democratic system that specifies “one member, one vote”. This ensures that all members of the co-op have an equal say in how the co-op is run, regardless of how much money they have invested in the co-op.

The Seven Co-op Principles

Although cooperatives can operate in many different sectors and either as a for-profit or not-for-profit enterprise, there is one thing that every co-op has in common. Co-ops around the world are organized according to the seven international principles of cooperation.

1. Voluntary and open membership

2. Democratic member control

3. Member economic participation

4. Autonomy and independence

5. Education, training and information

6. Cooperation among cooperatives

7. Concern for community

Why a Co-op?

Because the Members and Community Both Benefit!

Co-ops have multiple bottom lines that include social as well as economic (or financial) objectives. Co-operatives work for the sustainable development of their communities through policies approved by their members.

Beth Coates, Brian Burch, Don Middleton, Arlene Kubiak, Valerie Lemieux, Mary Halder and Paul Plecash at the Co-operative Spirit Awards

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CAIC Honoured by Co-op Community

On October 15, 2009, the Ontario Cooperative Association recognized CAIC's innovative lending practices with a Special Recognition award. Members of CAIC's board, staff & advisors were on hand to accept the award on behalf of CAIC's membership. What follows is an account of CAIC's long-term commitment to non-profits, charities and social entrepreneurs and co-op.

CAIC (Canadian Alternative Investment Cooperative), a social lender, with roots in the social justice movement, has been quietly providing financing to non-profits, charities, social entrepreneurs and cooperatives for more than 25 years. In fact CAIC was an early pioneer in the burgeoning social lending sphere. Our borrowers have used these resources to operate women's & men's shelters, food banks, re-use it stores, fair trade & organic cooperatives, community loan funds, worker cooperatives, skills development centres, non-profit daycare centres and housing cooperatives to name a few.

CAIC was created in the early 1980's to provide access to capital for groups working in the charitable, non-profit, cooperative and social justice sectors. Our founding members wanted to create an investment vehicle that would ensure their resources were used to fuel their vision of a just world. A number of different options were explored but the cooperative model was chosen because the co-op principles and values such as democratic member participation, honesty, openness, social responsibility and concern for community resonated with the experience of our members.

CAIC invests in groups working for positive social change and community economic development in Canada that lack access to traditional financing. We are particularly interested in projects that promote alternative economic structures and act as a catalyst to structural change. When making an investment CAIC takes into consideration both the social benefit of a project and its business soundness. A project will not be considered unless it meets our criteria for both attributes.

With assets greater than $7 million CAIC provides mortgages, construction financing and working capital loans.

Although CAIC has all of the requirements of conventional lenders to safeguard our assets our cooperative structure allows us to tailor our lending to meet the needs of this sector. We are not faced with the kind of restrictions that can hinder conventional lending institutions. CAIC can be flexible and routinely provides open loans, step-up loans and principle repayment structures that suit our borrowers needs. CAIC wants its borrowers to succeed. We try to understand their financing requirements and work with applicants to ensure they are getting financing that works for them.

What is even more remarkable is that CAIC has been able to provide financing to groups turned down by conventional lenders and yet is able to offer rates, which are at or below market. CAIC's collaborative approach has resulted in a very low loan loss rate throughout our 25 year history.

In considering applicants CAIC's experience allows us to see value beyond the numbers which is often not readily apparent to a conventional lender. CAIC understands that non-traditional sources of revenue and community support are assets that are often hard to measure but can be vital to a non profit or social entrepreneur. CAIC's risk model has allowed it to extend loans based on the strength and commitment of management, the collateral available and a demonstration of strong broad based community support.

CAIC has provided financial support to more than 17 worker cooperatives, food cooperatives, day care cooperatives and fair trade cooperatives which in turn has allowed them to develop, expand and maintain a thriving business. CAIC has also been able to play a pivotal role in development of more than 7 cooperative housing projects. In fact many of our earliest loans were in support of large housing cooperatives. As government support withdrew, CAIC adapted and has found a new role in providing 2nd mortgage financing to housing cooperatives that find themselves in need of capital for maintenance & upgrading to ensure that co-op units remain available.

The On Co-op Special Recognition Award is an acknowledgment by CAIC's peers of our past successes in supporting the non profit & cooperative sectors. It also challenges CAIC to reflect on how we can continue to play a role as a leader in the social finance community in ensuring that a lack of access to capital is not a barrier to success!

Read the Press Release: CAIC On Co-o Award.doc (MS Word)

Watch the CAIC video from the award presentation:
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CAIC
CSI Regent Park
585 Dundas St East, 3rd Floor
Toronto, Ontario M5A 2B7
Phone: 416-467-7797
Email: caic@caic.ca

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