At a Monday night State of the Co-op event, Kensington Community Food Co-op board member Oren Roth-Eisenberg revealed that the co-op had dug itself out of immediate financial trouble last month thanks to donations and new memberships. In order to avoid shutting down, the co-op needed to raise $20,000 in one week to “meet some immediate financial obligations,” according to Roth-Eisenberg. The obligations were costs associated regarding equipment vendor payments and construction.
“Those obligations were on top of the typical operations of business like electricity and rent and restocking the shelves,” said Roth-Eisenberg. The story was first reported by Billy Penn.
Roth-Eisenberg said the money was made up by increased foot traffic, individual donations, member loans, the addition of 32 new members and the launch of Co-op Cash, a program in which KCFC’s shoppers can create a debit account they can draw from when making purchases with the co-op. Co-op Cash benefits KCFC by allowing it to have more cash on hand to replenish stock and pay bills.
“You really stepped up and showed your commitment to the co-op,” Roth-Eisenberg said to the co-op’s members at the meeting. “In one week alone, you shopped the store at increasing rates in December.”
Of the funds raised, the co-op spent $4,576 on construction debt and $6,750 on vendor debt. More than $10,000 worth of stock was added back into the store.
The co-op isn’t out of the woods yet, though. According to Roth-Eisenberg, the bad news is the co-op still needs to raise an additional $20,000 in January. The good news is that it’s already more than 40 percent of the way there.
“This capital is important for us also to be able to right the ship in some operational challenges,” said Roth-Eisenberg of January’s fundraising target. “We need this flexibility to ensure the co-op will be successful long-term.”
The co-op is instituting a variety of ways, including Co-op Cash, to help raise funds and make the business more sustainable.
Another way is increasing the membership cost from $200 to $300. A third way is the brand new co-op crate program, which begins this month. The way it works is that on the third Thursday of every month, the co-op will announce which local fruits and vegetables will be given out in crates to people participating in the program. Participants have until the first Thursday of the month to order the crate for $50 (the first crate will be $60, actually, but each refill will be $50), which they can later pick up at the store, located at 2670 Coral St. The co-op is marketing it as a way to save money because it allows for bulk purchases of certain foods.
“We’ll be able to get a better value for it because we’ll have an idea about how many people are purchasing [in advance],” said the co-op’s general manager, Mike Richards. “So if we’re going to do rice, we can buy a 50-pound bag of rice and split it up amongst [everybody] and it’s much cheaper for us.”
Richards added the co-op crates will have a “focus” on local foods and vendors.
“The board wants to make sure everyone understands [that] we don’t believe that just putting money into the exact same position will yield better results,” said Roth-Eisenberg. “So this is a combination effort of ways that we’re enhancing the business, making changes and improving the long-term viability with the fundraising that we need to have that opportunity to implement.”
Additionally, the co-op also seeks money through member loans, which is a way for the co-op
to access capital at lower interest rates than it would get from a bank or credit union.
“These are opportunities for members who believe in the co-op to be able to extend a larger chunk of capital that helps us invest in longer terms, products, services and ways of promoting the co-op,” said Roth-Eisenberg. “We really see this as not just a way to solve our immediate challenges, but to reinvest in the store longer term.”