Economy Remix: What Can We Learn from a “Big Bet” on Employee Ownership?
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Welcome to the Remix, as we take our latest spin around the economy. This column (“Report Assesses Impact of Philanthropic ‘Big Bet’ on Employee Ownership”) analyzes a four-year, $24 million philanthropic “big bet” on employee ownership. The largest philanthropic effort of its kind, what can we learn from this effort?
Earlier this year, I wrote about the growing role of “social justice philanthropy.” This, my latest column, offers a kind of case study review of this question.
The Kendeda Fund, after 30 years, is sunsetting this year. In 2019, it announced its employee ownership initiative, which donated $24 million to four organizations over four years to advance the field. Now, four years later, a report by the Ohio Employee Ownership Center and a set of podcast interviews with the four grantees provide us with a first look at the outcomes of this philanthropic investment.
In a foreword to the report, Kendeda Fund program officer Diane Ives offers four main objectives: 1) increase the number of employee-owned businesses, 2) use grant dollars to leverage additional investments; 3) strengthen core elements of a supportive ecosystem; and 4) amplify coverage of employee ownership in the media.
What are the outcomes? Kendeda grantees supported 45 newly employee-owned businesses with 903 employees, with employee-owners gaining an estimated $32.7 million in shares. Given the $24 million spent, one could say that the cost per job is about $25,000, which is a fair amount, but less than many subsidy programs. Moreover, the value of employee ownership generated ($32.7 million) is greater than the $24 million invested. But it is hard to see groundbreaking shifts in such numbers.
The bigger question is whether the investments are spurring new field infrastructure—such as new technical assistance cooperatives or new permanent revolving loan funds and/or policy gains. Here making claims about “success” may be premature. It is clear some significant new infrastructure has been built and that policy advances in the employee ownership field have greatly accelerated. What the impact of these gains in infrastructure and policy will be, however, will only become obvious in future years.
Two things, in short, are evident: the philanthropic bet did have some positive impact and the ultimate impact will depend on what people do, not on what philanthropy spends. As you read this article, I encourage you to reflect on these themes. Until the next Remix column, I remain,
Your Remix Man:
Steve Dubb
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