National Cooperative Bank, a Silver Sponsor of the 60th Annual Consumer Cooperative Management Association (CCMA) Conference, was formed to serve the consumer cooperative sector. As part of their participation at last week’s conference, NCBA CLUSA sat down with Brian Misenheimer, SVP of Commercial Banking and Mary Alex Blanton, SVP & Director of Strategic Marketing to discuss the rich history between NCB, food co-ops and NCBA CLUSA. Misenheimer and Blanton also provided some additional perspective on best practices in seeking financing, how co-op identity could be good for the bottom-line and revealed a fun surprise for active volunteers in the co-op community.

Can you talk a little bit about the history between NCBA CLUSA and NCB and how the bank participated at CCMA 2016?

Mary Alex Blanton: I’ve been at the bank for about 17 years, and going back to NCBA CLUSA helping found the bank in the late 70s, we’ve always been involved with NCBA CLUSA, as well as the Cooperative Development Foundation and the Bowers Fund. National Cooperative Bank was originally chartered as the National Consumer Cooperative Bank, and within our charter our primary focus was providing financial services to consumer co-ops.

Some of the notable food co-ops we’ve provided banking services to since 1980 include Wheatsville Food Co-op in Austin, TX, which is still a current customer, and we’ve provided financing to Greenbelt Co-op in Maryland. And not related to food co-ops, but REI, the largest consumer co-op in the U.S., was one of our first customers. So we’ve always had a mission to serve consumer co-ops and it’s been critical to NCB’s mission to continue working in this segment and however we can help new food co-ops get started, expand and compete with other grocery stores that come into their market, we’re here to provide those services.

Over the years we’ve provided over $78 million in financing to food co-ops across the U.S. Most people know we’re a mission-driven financial institution, but we are a co-op ourselves owned by 3,000 of our customers, and they guide the bank at the board level, so we’re here to serve them. One example of our commitment to the food sector is our five-year, $250,000 grant to the Food Co-op Initiative that helps them provide technical assistant and grant funds to new food co-ops.

Brian Misenheimer: To echo what Mary Alex said, the mission of the bank is financing co-ops and providing resources for co-op development, so the Bowers Fund is very important to us. As far as at the conference, we participated on the CCMA Planning Committee, we participated in the Financing and Marketing tracks. For the financing track specifically, we developed a lot of good sessions with a few other lending organizations in the space. After all is said and done, there will be some great case studies that come out that will tie everything together.

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From a best practices point of view, what are some of the typical pitfalls food co-ops should be aware of when they begin to explore the financing question?

BM: I think the first order of business is that the lending institution should be familiar with the co-op business model. You don’t want to go down the path of a local lender—even in an effort to keep it local—that doesn’t understand what a co-op is and the business structure. I would suggest you start the conversation early with a lender in the co-op arena, and there are several that attend these events that would be a great resource.

Then you really want to build a relationship and be transparent with all the different sources of funding you’re exploring. A lot of times the capital stack with these food co-ops is very complex, and depending on the programs, some funding sources don’t work well together. But regardless, you want everyone to be aware of who is working together. We avoid these pitfalls because NCB is mission-driven, we understand co-ops and we work with key influencers in the industry. We make all of that part of our process early on, and it works very well.

Many of the sessions at CCMA examined other parts of the food co-op business beyond just selling food that can help a co-op separate itself from Trader Joes, Whole Foods or other competing grocers in the natural products marketplace. Whether it’s using the .coop domain and the COOP Marque, what role do you find that co-op identity plays in helping cooperatives compete in today’s economy?

MAB: We see that food co-ops and co-ops in general really connect with their local community, and that’s how they differentiate themselves from other retailers or businesses. It could be sponsoring school events or having specific programming. Food co-ops often do nutrition classes and cooking demonstrations with students. It ends up being a real community partnership where the co-op is engaged and giving back.

I’ve seen co-ops nominate a local charity each month, and the membership of the co-op is encouraged to participate, like rounding up a payment or bill or something like that, with the extra money going into the pot to be donated. Co-ops think about the communities differently than other organizations. I was down in Wheatsville doing a video for our annual meeting, and Dan, the GM, also understands they have to be a good grocer first, but everything else they do is what ends up setting them apart. You have to have a business foundation, but co-op identity can help differentiate them.

From the Principle 6 perspective of co-ops working with co-ops, how do NCB’s ties to other sectors benefit the other aspects of a food co-op’s business?

BM: Well, NCB is connected everywhere, so we’re thinking outside the box beyond just making a loan. We’re a relationship-based organization and we leverage those relationships across industry sectors. BLUE HAWK HVA/C, for example, is a distributor co-op. We connect our start-up food co-op clients with their members during the RFP process so they can at least think about utilizing another cooperative for their in-store needs. Same with ACE Hardware. ACE has a commercial division, so we try to make that connection and work together.

To wrap things up, we heard something about a cruise…

MAB: Yes! Every other year, Cabot Creamery Cooperative hosts a “celebrity volunteer” cruise, so NCB and Cabot have teamed up to select two people that have given back to their community or are active volunteers. Nominated volunteers can potentially win a week-long Alaskan cruise in June 2017. We just put out a press release about it and you can learn more on our website.