In his piece for Nonprofit Quarterly, USFWC Executive Director Esteban Kelly lays out a strategy for how social and cooperative movements can invest in worker co-ops to build economic power. If you value this kind of perspective, you may want to sign up for NPQ’s newsletters.
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What’s Next? Why Co-ops Are Essential in the Fight for Democracy
Building community-based economic infrastructure hasn’t been a major element of most democratic strategy, but it should be.
Esteban Kelly
August 6, 2025
As the foundations of the nation’s political economy collapse—plundered by billionaires, hollowed out by austerity, and stripped of regulatory guardrails—movement leaders are searching for strategies to move beyond resistance toward durable, structural transformation.
Those not seduced by neoliberal spoils have long understood the need for a new economic architecture—one grounded in cooperation, mutualism, and community control. But the effort to build these structures while capitalism barrels forward has tested our movements at every turn.
Some have argued that we need more representative leadership: that the same resources long concentrated among White, cis, owning-class, Western, masculine, and able-bodied leaders could be better stewarded in the hands of younger, queer, femme, Indigenous, and immigrant leaders.
While representation matters, we’ve too often conflated stewardship with strategy. As someone who has offered both, I can certainly say that Black stewardship and Black visionary strategy are not the same. The skills required to sustain institutions differ from those needed to build them from scratch.
Further complicating matters, movement timelines are dictated by external forces like electoral cycles and grant deadlines rather than the actual time it takes to build values-aligned institutions. This mismatch sets us up for failure. Anything worthwhile takes time to build, and cooperative ownership may be the clearest example of that truth.
Assessing the State of Co-op Development
Around the globe, co-ops are in the spotlight. In fact, the United Nations declared 2025 the International Year of Cooperatives.
That makes now a good time to assess what is working. Even modest investments in the co-op field have led to a tripling in the number of US worker co-ops in the past decade, yet that number remains far from what’s needed to transform our economy. Still, worker co-ops and employee ownership are among the most promising tools available to build long-term community power.
If we want democracy in our politics, we need to coordinate the resources required to build democracy in the grassroots of our economy.
I’m not suggesting abandoning politics in favor of cooperative economics, but clearly political power mirrors economic power. With wealth and industry concentrated in a handful of corporations, is it any wonder our political system listens primarily to them? If we want democracy in our politics, we need to coordinate the resources required to build democracy in the grassroots of our economy.
When workers, tenants, farmers, patients, and communities control the businesses, housing, healthcare systems, and even nonprofits that shape their lives, the surrounding political systems follow suit. Our movements have tried nearly every other route. Perhaps it’s time to seriously consider the strategic potential of cooperative ownership as the flywheel that can drive a truly democratic, solidarity economy.
Cooperatives are not a fringe solution or a branding tool for conscious consumers. They are the connective tissue between small-scale mutual aid and large-scale structural transformation. Co-ops are a rare and vital form of infrastructure: something we can build today, without waiting on policy change, that shapes the future and prefigures the world activists want while meeting community economic needs today.
Cooperative models are diverse, but my work has centered primarily on worker co-ops. At their core, worker co-ops are democratic institutions: businesses owned and governed by their workers, who share both risks and rewards. They offer a model of economic self-determination—rooted in values of equity, solidarity, and accountability.
In our current moment—a time marked by mass economic precarity and a crisis of legitimacy in major institutions—co-ops provide a credible, scalable response. They give worker-owners a taste of workplace democracy, with every member learning and using skills for wielding economic power.
Even at a small scale, workplace practices like open-book management, a democratically elected board and management, and co-op-wide decisions on profit sharing or reinvestment shift the imaginations of everyday workers for what kind of society can be built, and how to do it.
A Forgotten History
Nothing about this is new. Yet cooperatives remain widely misunderstood. They are actually rather large in the US economy—more than 143 million people in the United States, for example, are credit union member-owners; these credit unions have a combined total of $2.37 trillion in assets. More than 42 million residents get their power from electric co-ops. Nearly 30 percent of all agricultural products are marketed by co-ops.
The dominant narrative, however, still paints co-ops as quaint, inefficient, or niche “alternative” holdovers from the 1970s. This caricature ignores their deep roots in Black economic self-help, immigrant entrepreneurship, labor organizing, and rural mutualism. There’s little room to mention that the erasure of Black solidarity economy initiatives was a deliberate tactic for liberatory movements to survive the Red Scare, itself coinciding with the oppression of Jim Crow.
To elevate cooperatives from the margins to the mainstream, we must invest in them strategically—not just as businesses, but as movement infrastructure.
The co-op stereotype forgets that agricultural co-ops resisted the Klan to support Black farmers in the South, or that housing co-ops in New York were key to affordable family housing for the last 50 years, or how co-ops met college student needs, briefly backed by federal resources in the early 70s through the US Department of Housing and Urban Development. It erases the ways that co-ops have modernized struggling rural communities and offered alternatives to the gig economy.
A promising solution is not enough. We also need to reclaim this history for people’s liberation and tell stories of how co-op initiatives can be key for today’s challenges. The International Year of Cooperatives comes at an interesting time because co-op solutions highlight precisely what is needed to reboot connection and interdependence, while centering community voice and self-determination.
In April 2025, I had the honor of representing all three million cooperatives around the world, boasting 1.2 billion members altogether, to speak at the United Nations about just that. I shared how, leveraging this designation, the global co-op community has an opportunity to show people what co-ops have done, and more importantly, what they can do. Here in the United States, the US Federation of Worker Cooperatives (USFWC)—the organization I lead—has committed this year to increase our advocacy and public awareness of co-ops.
A Strategic Investment Approach
To elevate cooperatives from the margins to the mainstream, we must invest in them strategically—not just as businesses, but as movement infrastructure. The worker co-op movement has already laid crucial groundwork. Now the work must scale.
Growth won’t come through isolated startups launched into a hostile economy. As the USFWC’s internal strategy insists, growth must be systemic, intentional, and polycentric.
In other words, we don’t just need more co-ops—we need interconnected systems of support, financing, training, and advocacy that reinforce one another. As the late Nobel Prize-winning economist Elinor Ostrom argued in her work on the commons, governance must be locally rooted, polycentric, and built on trust. That is precisely the future co-ops offer.
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In a time when authoritarianism is rising, democracy in the workplace isn’t a luxury. It’s a necessity.
But this won’t happen unless co-ops and movement leaders are willing to define and defend our values. Outshining the profit motive, worker co-ops feel that democracy itself is the goal, even inside of our very workplaces. And building workplace democracy results in equitable employment and regenerative practices—in other words, just and sustainable stewardship.
The Right understands this; they have spent decades building institutions aligned with their worldview. Progressive philanthropy, by contrast, often fails to think strategically. It invests in issues, not infrastructure. In campaigns, not capacity. As a consequence, our movements lack the resilience and coordination to face systemic threats.
Surely now such institutions should be open to new thinking, including our call to reverse those logics. Cooperatives allow us to live our values—in the workplace, the marketplace, and the community. And they happen to distribute wealth and economic power through the very act of conducting day-to-day business.
A just society won’t emerge if movement leaders outsource that work. We must build it ourselves.
How Co-ops Build Economic and Political Power
So how can co-ops grow in a way that builds economic and political power?
First, center economic justice. The communities that are most harmed by extractive capitalism—Black, Indigenous, immigrant, and working-class communities—must be at the forefront of cooperative development. That means addressing real resource gaps and building institutions that are culturally competent, accountable, and accessible.
It also means building co-ops in both low-wage service industries and high-value manufacturing, linking them together in a broader strategy of mutual support, and being conscious and strategic about previously criminalized industries, such as cannabis, where historical injustices of incarceration can tie directly to new social enterprises like cannabis co-ops.
Second, invest in practical business infrastructure. Some of this is basic business development, but it also means behaving as shrewdly as the capitalist chambers of commerce; eschewing the go-it-alone culture too many espouse in the United States in favor of membership, connection, dues contributions, and strong cooperative associations.
Both USFWC (and the National Cooperative Business Association, on whose board I have served for over a dozen years) do these things, but this also involves building a network of technical assistance (TA) programs; leaders and experts trained to provide that TA; supporting local and regional associations; and developing programs, like USFWC’s worker benefits program, to establish access to health, vision, dental, and retirement comparable to traditional jobs.
Like unions, co-ops need to offer competitive benefits—and they need organizers, trainers, and policy advocates. Unions themselves are of course an important part of this movement-building work. Hence, the necessity of collaboration and coordination.
Third, invest in expanding the field of financial intermediaries that can support co-ops at scale. Worker co-ops often struggle to access capital, especially in low-wealth communities. That is why community development financial institutions like the National Cooperative Bank, Seed Commons, LEAF Fund, Cooperative Fund of the Northeast, Shared Capital, Boston Ujima Project, and even innovative approaches to mission-driven Black-owned private equity like Apis & Heritage, are critical.
The leadership of Transform Finance in thinking through the complexity of capital instruments for scaling up worker-ownership is instructive. So too is the pioneering work of Chordata Capital, an anticapitalist wealth management firm that moves its clients’ investments off Wall Street and into community investments that center racial and economic justice. By organizing lenders, offering borrower education, and designing loan products tailored to cooperative needs, our movements can unlock new capital for co-op development.
Fourth, build education and leadership pipelines. In the same way that social justice groups and labor unions run political education programs, the co-op movement must develop schools and training institutions that teach governance, entrepreneurship, and democratic practice. Whether it’s a grassroots training program for home care workers or an MBA-equivalent for co-op developers, we need education that prepares people to lead and grow this movement.
We also need easier onramps for new leaders and base-building organizations to learn about the solidarity economy, worker-ownership, cooperatives that control land and housing, and community governance, because scaling means bringing more people into the field, and that requires orientation, education, and skill building.
Fifth, integrate co-ops into broader political strategies. Cooperatives shouldn’t be seen as stand-alone economic alternatives but as part of a larger democratic struggle. That means linking co-ops to tenant unions, labor campaigns, climate justice movements, and electoral efforts. It means seeing economic democracy as a cornerstone of political transformation.
Why We Can’t Wait: Building Co-op Institutions Now
At USFWC, we’ve already begun the work laid out above. But we can’t stop there.
Even if we’re bold in our vision and unapologetic in our values, it’s not worth much without the support and collective investment of progressive institutions, organized labor, and grassroots organizations.
There’s a clarity of purpose that comes when we appreciate that “infrastructure” refers to how these interlinking pieces form a cohesive power-building apparatus.
That’s what it means to expand the solidarity economy. And it starts with the smaller institutions that co-ops already have direct influence over. When movement leaders speak with one voice for cooperative legislation—and invest financial resources in the co-op community from loan funds to sponsorships and grants to contracts and procurement to membership and dues—our movements can have a greater impact.
Owning our own economy offers good jobs and shared profits, while also allowing people to live democratically. In a time when authoritarianism is rising, democracy in the workplace isn’t a luxury. It’s a necessity.
We don’t need to wait. We can build it now. Let’s stop asking if cooperatives can work. Let’s start building the future where they do.
This article was originally published by NPQ online, on August 6, 2025, https://nonprofitquarterly.org/whats-next-why-co-ops-are-essential-in-the-fight-for-democracy/ Used with permission.
