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Wellspring

Creating good jobs through worker cooperatives serving anchor institutions and communities.

Background

Founded in 2011, Wellspring is building a network of worker-owned cooperatives in Springfield to create local jobs and build wealth for low-income and unemployed residents. Located in western Massachusetts, Springfield is the third largest city in the state (~150,000). It is home to a majority people of color and suffers from high concentrations of poverty. Wellspring was inspired by the Cleveland Evergreen Cooperatives, which launched in 2008 to develop worker-owned businesses to provide goods and services to the region’s anchor institutions (universities and hospitals). Evergreen now has three cooperatives employing 120, including a commercial green laundry, a green energy business, and a hydroponic greenhouse.[i] Evergreen was itself modeled on the Mondragon cooperatives in Spain, which started in the 1950s and now has more than 200 cooperatives and affiliated businesses employing more than 74,000 people.[ii]

With a seed grant from Robert Wood Johnson Foundation and matching support from Baystate Health, University of Massachusetts Amherst, and others, Wellspring quickly drew interest from the major hospitals and universities in the area as a way to create good jobs. As a Vice President of Baystate Health said, “as soon as you can get people to see it’s another business model that just happens to be worker-owned, that it can seed the local economy in ways that the market doesn’t, that it can provide both asset building and living wages, help people to buy homes – then you can get them on board.”[iii] Less than ten percent of the $1.5 billion spent by anchor institutions in the area goes to businesses in Springfield, so Wellspring saw an opportunity to start worker-owned businesses to capture more of this spending.

So far, Wellspring has three coops in its network with another three in the pipeline. Wellspring Upholstery Cooperative was launched in 2013 and now has seven workers (four of whom are becoming worker-owners). It is just starting to achieve financial stability and develop long-term contracts, such as managing furniture inventory for Baystate Health. Wellspring Harvest is an urban greenhouse business for which Wellspring has raised $900,000 in capital. Wellspring purchased a two-acre plot of land from City of Springfield in Fall 2016, and construction of the 10,000 square foot hydroponic greenhouse will begin early in 2017. Old Windows Workshop is a women-owned window restoration business that officially became part of the Wellspring network in December 2016. It currently employs four women, and is converting into a worker cooperative.

The network is linked together by the nonprofit Wellspring Cooperative Corporation (WCC). WCC provides technical and financial support to Wellspring coops and research and planning for new businesses. WCC strives for democratic governance through a board that includes representatives of its cooperative businesses, anchor institutions, community and labor groups, and other stakeholders. Like Mondragon, WCC plans to grow by investing the surplus from its member coops to develop more coops and create even more good jobs.

Key Learnings

Wellspring’s focus has been on creating alternative enterprises, or in Wellspring co-founder Emily Kawano’s words, “stories of viable models.” For the workers, the story is simple. “Wellspring really does put food on my table,” says Gary Roby of Wellspring Upholstery. Nanette Bowie of Old Windows Workshop says that the business “allows the flexibility of a working mom … to take care of your family responsibilities and keep a full time job.” But beyond a job, the cooperatives are giving them a new sense of ownership and possibility. Roby, who is applying to become an owner, says “if you are going to put the title on yourself of worker-owner, you have to live up to that title.” Bowie, who had not heard about coops before joining the Workshop, says “I have family members that didn’t know what a coop was and I had a few who are very negative. … I try to reassure them that I am doing this because I have a future here.”

By focusing on building good jobs, Wellspring has created a space where people from diverse backgrounds are learning more about cooperatives and solidarity economy. According to Wellspring co-founder Fred Rose “we can say we are trying to change capitalism, [but] lots of the people in the room don’t see it that way.” Rather “they connect with this idea that people should have some control in their lives and that we can create good jobs by capturing the purchasing power of local anchor institutions.” Kawano notes that some of the Wellspring board members “are very mainstream and not familiar with the solidarity economy.” Yet they voted for WCC to join the US Solidarity Economy Network. Kawano says that “there are probably some people who aren’t at all familiar with the solidarity economy, but it’s okay… Some people get it; some people don’t quite but are a little more open to learning about it.” WCC board member Frank Robinson of Baystate Health, says that “five years ago nobody got it… Now with the Greenhouse and Upholstery Coop as part of the business case, there is something tangible for people to respond and react to.”

Courtesy of Wellspring

A source of strength for Wellspring is its anchor institution partners. Their support lends credibility and legitimacy, which has been particularly important for gaining support from the City of Springfield. The Mayor has come to various events. However, this mainstream support has not automatically translated into resources, policies, or customers for Wellspring businesses. In the beginning, Wellspring focused on developing businesses that would meet anchor institution demand rather than the interests of coop members, which is the more traditional route for developing cooperatives, according to Rose. As Wellspring has matured, it has developed a more flexible approach to cooperative development, including the more traditional “bottom up” route. For example, Wellspring is supporting a group of immigrant workers to create a lawncare cooperative.

Despite their progress, Wellspring still faces challenges in working with government and the broader community. When working to secure public land from the Springfield Redevelopment Authority, Rose said that they faced an attitude of “prove it to me” that their greenhouse model was viable. This skepticism and lack of understanding of the model also extends to the community, where according to Robinson, some people think that “coops are something that happen in Amherst or Northampton,” which are more white and wealthy communities.

While the vision of a network that is self-sustained by the surplus from its member cooperatives is compelling, Wellspring is still building its first coops. During this initial phase, they have found that startup is very time and resource intensive. It requires finding managers who not only have the specific business skills, but also a coop mentality. Financing the businesses is also a challenge, though according to Kawano, “we’ve been a whole lot more successful getting funding for the business than getting funding for the nonprofit.” The nonprofit WCC, which provides critical incubation support, is struggling to raise general support funds. Though it got some initial funding from anchor partners, the partners have a harder time justifying grant support over the long term, as they do not see economic development as core to their mission.

At the same time that Wellspring is getting its first businesses off the ground, it is also building up its governance structure. Robinson says “the notion of a worker assembly that produces board members is a big concept, but from a governance standpoint we have yet to fully operationalize it.” Bowie serves on the WCC board, but while Roby would like to be more involved, his time is limited because he sometimes puts in ten to twelve hour work days. Though WCC has several board seats for community and organizing partners, it has been difficult to sustain participation from this sector, because, according to Kawano, “their capacity is pretty limited,” and they struggle just to keep their organizations afloat.

Wellspring’s progress is starting to prove the viability of the anchor institution and worker ownership model. It has brought together a remarkably diverse set of partners from community and anchor institutions and gotten the attention of key decision makers. However, more resources and investment are necessary to build out the model so that Wellspring can become “an engine for new, community-based, worker-owned companies in inner-city Springfield.”[iv]

 

[i] http://www.usnews.com/opinion/articles/2016-07-21/evergreen-cooperative-is-a-cleveland-jobs-success-story

[ii] http://www.mondragon-corporation.com/eng/about-us/economic-and-financial-indicators/highlights/

[iii] Emily Earle, Towards a More Transformative Community Economic Development (Master’s Thesis, Tufts University Department of Urban & Environmental Policy and Planning, 2012), p. 85.

[iv] http://wellspring.coop/