This is the second of an eight-part series centered around the themes of an inspiring new book, “Assets in Common,” published by Common Trust and Purpose. The series explores several topics, including innovative employee ownership models, shared services cooperatives, mutual credit systems, and steward-owned holding companies through in-depth research into real initiatives working at scale. More than a dozen practical, working examples are profiled, which light the way for an economy that can reverse troubling trends of wealth concentration, community fragmentation, and environmental destruction. Learn more and check out their new book at www.assetsincommon.org.
Drive through almost any town in America and you’ll see the same glossy plastic signs. Chain restaurants, chain hardware stores, big box grocery stores, and corporate gas stations. Anytown, USA, Population 341,814,420. These large corporations dominate our economy. Old main streets, on the other hand, are rows of vacant skeletons where small businesses once served their neighbors. Meanwhile, profits are shipped off to tax havens to be pumped into shareholder pockets, and the people who work in these companies are left to fend for themselves.
These circumstances can’t go on forever. There has to be another way. We need creative solutions for small businesses to take back Main Street. We’re all too familiar with the problems, and we hear them repeated constantly. But we don’t hear enough viable, creative solutions.
So, the Infrastructure for Shared Ownership research team set out to scout for examples of what was already working. We talked to entrepreneurs, activists, lawyers, finance experts, and small business owners. What we discovered is extraordinary and hopeful. We’ve assembled it all into a book called “Assets in Common” (which you can find at https://www.assetsincommon.org).
This plight of small businesses isn’t the only problem we considered. We also care about who and what reaps the benefits in our economy. We want to see a world where more people live decently and share in the value they produce at work. Employee ownership and worker-owned cooperatives offer some glimmers of hope, but can we go even farther?
Sharing value is great, but if we just re-rationed the profits of our current economy, we would still be barreling toward climate disaster. We also need to update the physical operations of our economy, but how do we do that at scale? Policy changes are a long-game and may not take root enough to chart a different pathway. What can be done with the solutions that exist right now to reimagine our legal and financial infrastructure for good?
The changes we need in our world must happen quickly. We can’t wait for change to happen one company at a time, so we hunted for models that promise to shift multiple companies and organizations and marshall resources collectively.
A flower in the cracks of Main Street
We researched dozens of organizations, projects, finance tools and legal structures looking for fruits of hope. What we discovered surprised us. We found major common threads across the most successful solutions. While we outline fourteen distinct success factors in the book, we’ll share just a few here.
Internal Cooperation for External Competition
A majority of promising solutions used internal cooperation to make the overall group more resilient to the outside world. For example, CarpetOne appears to be a national chain of flooring stores. But under the hood, it’s actually a cooperative of independently-owned small businesses that together co-own their national brand. The group emerged from a coalition of small stores that were having trouble competing with the low prices of the big box stores. So they banded together and pooled their purchasing power so they could buy flooring at the same bulk prices as the big guys. This group of over 4,000 stores uses deep, intensive cooperation to compete with big business.
It’s not just CarpetOne. This concept is called a Shared Services Cooperative, and we’ve written multiple chapters about what they are and how to start them.
Shared Economic Destiny
When different stakeholders have fates that are inextricably linked, we might say they have a shared economic destiny. Rather than singularly pursuing financial gains for a few, the aim is to create value that benefits the entire ecosystem over the long run. This manifests in practices like employee ownership, distributed governance and decision-making, and shared balance sheets. It can also mean leveraging resources cooperatively. An example is a group in North Carolina called The Industrial Commons, which is focused on keeping the textile industry alive. Their nonprofit arm leverages its strong balance sheet to buy expensive sewing equipment that it then provides to for-profit worker co-ops. These small co-ops wouldn’t otherwise be able to get financing for industrial equipment, so their existence is made possible by another entity lending its power.
Conscious Consolidation
“Consolidation” refers to businesses merging or acquiring one another into fewer, larger companies. Rather than corporate conglomerates taking over companies solely to maximize profits for shareholders, an alternative approach is emerging: conscious consolidation. This involves consolidating assets not for the benefit of a few shareholders, but to preserve local businesses as permanent community fixtures. Companies structured as holding companies or multi-stakeholder cooperatives are acquiring or integrating locally-rooted small and medium enterprises, then transitioning ownership to models like employee trusts, perpetual purpose trusts, or co-ops.
In Montana, a group called Goodworks Evergreen has acquired seven small rural hardware stores, which are now run collectively as a group. These small businesses were on the brink of going out of business when Goodworks stepped in to buy them, keeping a local institution alive while investing resources to improve operations. This ensures wealth stays embedded in local economies instead of being extracted. It safeguards jobs, fosters shared ownership cultures, and allows for more self-determination within communities.
Upgraded Legal + Financial Structures
The current economic system isn’t an accident. It is held together by a massive amount of legal code and specifically-designed financial structures. This legal + financial infrastructure is mainly intended to protect and promote private wealth accumulation. So there is a great opportunity to build legal + financial infrastructure to advance pro-social outcomes like shared ownership and responsible stewardship.
Fortunately, a range of updated structures are already emerging to make this paradigm shift possible. One of these is the steward-ownership model, which separates economic interests from governance. A company’s shares are placed into a perpetual purpose trust or foundation, preserving its mission and values rather than privatizing the profits. This ensures an enduring, independent focus on stakeholders instead of extractive profit motives.
When combined with shared ownership models like employee ownership trusts (EOTs), a powerful symbiosis is achieved. Assets and businesses are protected for the long term, with financial incentives aligned to continuously reinvest for mission impact rather than wealth stripping. In turn, this sustainable value creation builds broad-based ownership among all stakeholders.
One of the first groups to combine steward-ownership with employee ownership is an auto repair group in Utah. Clegg Auto has four shops, and with the help of Common Trust, transitioned ownership of its shops to employees through a steward-ownership trust model. This allowed Clegg Auto to secure its legacy while sharing the roadmap with others. One important aspect of the Clegg steward-ownership trust is that it decrees that the company can never be sold, protecting their independence in perpetuity. Many steward-owned companies include this clause to further protect their mission and stakeholders from the allure of acquisition. This presents a major departure from the exit-driven business logic of the Silicon Valley-style startup and introduces questions of how early-stage investment will work in a steward-owned context.
Money itself is also up for redesign. In Sardinia, a mutual credit system called Sardex was launched, allowing SMEs to directly trade goods and services with each other using Sardex units as a complementary currency. Rather than the traditional money markets, they created new grassroots markets governed by different rules and member-driven economic participation. This allows value to recirculate inside the local economy, and gives businesses an incentive to trade and collaborate with their neighbors. By making credit less scarce, it also helps to grow the economy without the artificial ceiling that happens when cash flow is slow but a business otherwise still has the ability and desire to trade.
Revitalizing Main Street
From reforming corporate governance codes to restructuring money itself, the possibilities for new legal forms and financial arrangements are vast. The path will be iterative, but each new example helps shield assets from extraction and creates value for their stakeholder ecosystems. Perhaps if we can rewrite the source code at the core of business, we might have a chance at turning the tide on the massive crises facing us today.
This article originally appeared on Shareable.net.
