Employee Ownership at the Crossroads

In 2018, the Kendeda Fund launched a series of Big-Bet grantmaking opportunities – one-time focused investments in timely and critical issues, to help propel work to new levels of capacity and reach. One of those Big Bets focused on Employee Ownership, where we identified four goals for our funding:

• Grow the number and variety of businesses implementing employee ownership as a core operating principle, with an emphasis on strategies that build democratic decision-making and work to address the economic and racial wealth gap.
• Use patient-capital (grant money used for revolving debt-investments and loan loss reserves) to leverage investments.
• Strengthen core elements of the ecosystem needed for employee ownership to thrive (build for scale, accelerate growth, and popularize the ownership culture).
• Amplify the communication and media coverage of employee ownership in ways that encourage more mainstream acceptance.

With this as our compass, the Kendeda Fund granted over $24 million to four organizations that were exploring ways to transition small and medium sized companies to employee ownership: The Fund for Employee Ownership at Evergreen Cooperatives, Nexus Community Partners, the ICA Group and Project Equity. As part of this Big Bet, the Kendeda Fund also invested over $1 million in a shared communications campaign called EO Equals. Grantees were given planning grants to assess their capacities, needs and capabilities. 

Based on those internal explorations, they were invited to apply for funding that would lead to meaningful growth and expansion, as well as depth and strategy for their work. Each group grappled with some targets for how many businesses would be transitioned to employee ownership, and how many workers would become employee owners. While there was never an attempt to harmonize work across the four groups, they all held a shared vision for tapping the power of employee ownership to grow the field in new and creative ways. It is still too early to know how this Big Bet has impacted the trajectory for employee ownership into the future. But, as Chris Cooper says in his introduction to this document, Kendeda’s funding has helped accelerate employee ownership towards a vibrant crossroads where creativity and capacity are converging in non-linear ways.

This document, Employee Ownership at The Crossroads, is based on the reflections of Kendeda’s EO grantees that were part of the Big Bet. Through in-person conversations, in interviews and in writing, they have honestly assessed how their expectations and plans advanced, and also needed to be adjusted to the realities of larger societal and economic issues at-play (a pandemic, an ongoing racial-reckoning, inflation, recessionary fears, quiet-quitting, and war, to name a few). 

Working to advance employee ownership in these turbulent times has had its challenges, but in every way, these grantee partners have worked in respectful and thoughtful ways to advance the power and magic that employee ownership can bring – the pride and dignity derived from meaningful work, and more stable and sustainable communities where wealth earned through work stays in-place for a ripple effect of shared prosperity.

I am grateful to Chris Cooper and Mike Palmieri, and the deeply knowledgeable and committed team at the Ohio Employee Ownership Center (OEOC) for facilitating this reflection process. Their deep understanding of the history of employee ownership in the US, and their passion for its future, provided all who participated the trusted guides needed for this journey of discovery. Chris and Mike have written this report based on the reflections and data gathered from our grantee partners. A shout out to Dominic Bertolini for his creative design to make this information accessible and usable. Dr. Ashley Nickels of the School of Peace and Conflict Studies at Kent State University played an integral role in interviewing key partners, and demonstrated a useful role for AI in aggregating meaning. And, much gratitude to the Kendeda Fund’s grantee partners whose hard work continues to amaze and inspire me every day.

Finally, as part of this Reflections process, the OEOC team interviewed the leaders of the four organizations that participated in Kendeda’s Employee Ownership big bet. In the 'Owners at Work' podcast, those leaders reflect on how and why they do the work they do, how Kendeda’s investment helped them expand their impact, and where they see their work going in the future.