Growing Community Through Local Capital

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Jacqueline Hannah

Jacqueline Hannah is a 15 year resident of C-U and the general manager of Common Ground Food Co-op in Urbana. She’s passionate about growing the cooperative movement and being a part of the health and vitality of her community through encouraging democracy, empowerment, and shared responsibility. 

Talk to almost anyone these days and they’ll have heard of the power of supporting local business to improve our communities.

According to the Small Business Association (SBA), these local, small businesses create 75% of new jobs in our country, and reinvest in our communities at 60% higher rate than chains or on-line retailers. And the benefits are not just economic, as Michael Schulman, author of The Small-Mart Revolution says, “. . . studies suggest that local businesses are also critical for tourism, walkable communities, entrepreneurship, social equality, civil society, charitable giving, revitalized downtowns, and even political participation.” Shopping local creates more jobs and strengthens our community, but what about the capital needs of our local small businesses and the future local businesses we’d like to see develop?

Since 2008 capital has become harder than ever to get a hold of for small businesses, and at the same time people are looking for opportunities to invest their funds in businesses that grow things they believe in. Many want to put their money into businesses that meet their ethics and will enrich their own communities and are willing to seek out these opportunities and take on more risk to do it.  I’ve seen this first hand in my role as General Manager at Common Ground Food Co-op.

Co-ops have a unique way they can raise capital, they can accept loans from the owners of their co-op. There are careful rules that must be followed by co-ops to do this – they can only accept loans from active co-op owners that are legal residents of the state that the co-op is located in; the loans may offer interest but that interest must not be too high (often the line is drawn at it being lower than the interest being offered by a bank or fund would offer the co-op); the co-op must be very clear with owners that the loans are unsecured and therefore high-risk according to traditional investing standards; and the co-op may not actively advertise the loan opportunity to individuals who are not owners of the store.

In 2008, Common Ground raised $270,000 in owner loans to more than double in size and move to our current store-front location in Lincoln Square Mall in Urbana. At the time, many people thought it couldn’t be done but over 120 owners of Common Ground came forward to make loans to Common Ground’s relocation; some people even came in to become owners of the co-op for the first time because they wanted to put their money into growing the local food economy in our Champaign-Urbana community. We raised all the loans needed in two months and opened in Urbana in August in 2008. The co-op’s success since then has created 35 new jobs in the community, doubled the amount of purchases it makes from local farms and producers, and made Common Ground one of the three fastest growing food co-ops in our nation in just three years. Without those loans from over 100 of Common Ground’s owners, it could never have happened.

The 2008 Common Ground owner loan campaign showed the potential of local capital, and re-set the parameters of what we believed could be accomplished when we work together to meet the capital needs of local businesses. Common Ground’s 2011/2012 owner loan campaign took the bar to a whole new level. With Common Ground’s runaway success since 2008, we are quickly running out of space to meet the needs of our customers and owners. In 2010 we added 400 sq ft more of back stock space and squeezed a third register onto our sales floor, but it was clear this wouldn’t address the customers needs for long and we began planning for another expansion, this time right at our current location.  We could continue to grow within our current space, getting more and more cramped and not offering many items our customers were clamoring for us to offer, but the board and I believed growth was necessary and wanted by Common Ground’s owners. Our belief was put to the test by the 2011/2012 owner loan campaign – would our owners make the loans needed to make the expansion happen?


We launched our owner loan campaign over the summer of 2011 and raised over $650,000 in owner loans in less than three months. The response was phenomenal. With that money in hand, Common Ground was then able to go to primary lenders to find the rest of the funding for the expansion needed, showing a robust investment from the owners of the co-op.  After quickly attracting a primary lender to Common Ground’s project in the fall of 2011, we went out to get hard bids for our equipment and construction costs. While our equipment projections were accurate, we’d underestimated the cost of remodeling a space in a building over 60 years old that has had a varied history and is in use above and below us. We went back to the drawing board and cut some costs, but ultimately decided it was fiscally sound to increase the cost of the project if Common Ground’s owners were willing to help us get there. Between February 15th and March 15th of 2012, Common Ground’s owners told us they agreed by raising their owner loan investment to just over $1 million total.

Because of the loans of Common Ground’s owners, currently under construction is a space that will more than double the size of our store. The new store will have a full service deli with espresso bar and an all local/organic salad bar; a local/regional/organic beer and wine section; a self-service case full of fresh local and organic meat; twice as much local and organic produce; indoor seating; and a classroom that can seat two dozen with a built-in certified teaching kitchen where we will hold cooking classes. Construction is scheduled to be complete this fall. In the first year of the expended store Common Ground expects to create 20 new jobs, double the amount of local food that passes through its doors, and offer twice as many educational opportunities to the community.

Since our co-op owners raised over $1 million dollars in owner loans we’ve done a little research and found no food co-op our size has ever before raised so much in owner loans. I chalk that up, partially, to the amazing energy of our community; but in part I believe we’re the first to have done it because we’re the first to have asked. People want to put their money into growing their communities. The loans made by Common Ground’s owners will not only make our larger store possible, it will keep that interest money the co-op pays here in C-U instead of sending it off to a mega-bank. What else could we accomplish through making loans or investing our money other ways into our community? Let’s not be afraid to ask, let’s find out.






About Jacqueline Hannah

Jacqueline Hannah is the general manager of Common Ground cooperative.
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