What happens if there aren’t enough members? You’ve mentioned that 200’ish members is in the optimal zone for smooth cooperative stability, but supposing OSR doesn’t attract that many, or if initially there are that many, but in the early stages of the co-op a substantial number find it’s not for them and pull out. What’s the minimum needed to stay solvent as a co-op – one hundred shareholders? Fifty? What if there are fewer than that? I guess we’re asking what’s the worst-case scenario, and what plans have been made institutionally to mitigate the risk of this, and what plans should we make individually, in case that eventuality comes about?
To address the rest of the question: “…what’s the worst-case scenario, and what plans have been made institutionally to mitigate the risk of this, and what plans should we make individually, in case that eventuality comes about?”
We struggle with this question, because we cannot imagine any way in which the co-op could fail under normal circumstances. We CAN imagine a meteor striking the Earth and destroying most life, and we can imagine the US Government shifting into a dictatorship and all our shareholders being labeled as “subversives” and arrested. Those would do it. Other than those worst-case scenarios, we struggle to see how the co-op could fail.
I suppose it depends on how you define “fail”. If by “fail” you mean, the co-op becomes unable to pay its obligations — currently the co-op has no contractual obligations, it has no debt (other than the $100k that will be paid off in a few months), the property isn’t being used as collateral, its only operating costs are being covered by the payment of share fees. The co-op is operating on a pay-as-you-go basis. As long as our shareholders and board keep operating on that basis, we can’t foresee any way in which this project could fail.
If by “fail” you mean people stop purchasing shares in the co-op and we end up with significantly less shareholders than the optimal 200, this would simply make our long-term viability harder to achieve, but not impossible. The beauty of a co-op is that their members are much more likely to be willing to work together to solve their mutual problems than a traditional tiny town’s residents would be. We are all joining the co-op with the vision and hope this model provides. If the way becomes difficult, self-reliant people with our hope and vision will simply find ways to solve or make do in the face of problems.
Let’s say something unforeseen happens that we can’t anticipate and somehow it forces the co-op to have to shut down. Three options (without any brainstorming among our shareholders) come to mind are:
1. The co-op could quit-claim deed the properties to the various shareholders, or,
2. The shareholders could decide to sell the entire 1,245 acres plus the 2,854 acre-feet of water rights (worth much more than the land) and split up the money, or,
3. Some combination of those two.
Sure, that would seriously stink and put everyone in the hard place of having to relocate and find new jobs, but that is happening now in your town due to COVlD.
Then to your question, “…and what plans should we make individually…?”.
- Spend less than you earn and invest or save the rest.
- Do the planning and labor to make your homestead financially successful on its own.
- Be a contributing member of the co-op, help solve problems, give encouragement and assistance where it’s needed.
- A study by two sociologists showed that America’s small towns are drying up and blowing away because they export their greatest asset — their children. So, you’d want to encourage your children in acquiring useful farming and/or trade skills, to connect with their neighbors and peers, and in seeing the value of living in a cooperative community. Doing this will encourage them to stay at Riverbed Ranch and contribute to its long-term success.