Of Porticos and Profit Maiking Social Co-ops

A few of us ran more than 5 kilometers this morning. There is something awe inspiring about running on sidewalks that are under vaulted porticoes and periodically encountering a 12th century church or a tower, one of which is leaning. (Pisa’s tower is not the only one with a soft foundation). Bologna has 35 kilometers of these porticoes and it is tempting to marvel at them as if they are a sign of some rich architectural tradition from the Renaissance. The truth is far more mundane. Home owners wanted to add rooms in the front of their upper floors during a period of economic boom a couple of hundred years ago. The City had no objection provided that the height was enough for a nobleman to ride his horse without hindrance! In fact the height in most cases is more than 25 feet.

A business model that reduces inequality and promotes fairness while defying the purely capitalist model can work and win. Here is the proof.

We visited 2 fascinating for-profit co-ops today. The first, called SolCo Insieme is a consortium of 11 co-ops that undertake normal business activities while providing employment and assistance to people with developmental and other disadvantages. Among the business they run: 3 restaurants, 1 movie theater, a theater, beer manufacturing, janitorial services. At a minimum one third of the employees have to be disadvantaged.

The combined revenue in 2009 was €8.6 Million. They employed 346 workers. They run like typical businesses – they have budgets, strategic plans and accountability. There is ZERO charitable contribution their cash flow. And each of them turned a profit. The workers also make handicrafts and there is a small retail outlet on site. (photo attached)

The management is experienced in management of social objectives and business. The key driver is being comfortable with the concept that a profitable business is not an end by itself but rather a tool that will help the realization of social objectives. To my mind, this sounds exactly what we aim for at Vancity.

The next visit was to the Manutencoop Group. Owned by members who contribute a minimum €7,000 IF selected to join, the Coop Group owns the controlling share of a publicly traded company. The company in turn owns scores of business units. The focus is comprehensive facilities management for business. Services include property management , public services, health care, elevator maintenance, landscaping, HVAC maintenance, etc., etc., etc.

The co-op has 640 members, employs 16,000 workers and had 2009 revenues in the amount of €1.2 BILLION. It is the largest facilities management group in Italy and has doubled in size in the last 10 years. 58% of the employees and 6 out of 17 directors are women. Annual returns are in the 8.5% range and in addition there are a variety of bonuses and benefits. Factoid: Since 1995, all workers get a free PC if they have an email address so that management and workers can share ideas more efficiently.

In the heart of Bologna there is a cluster of 4 churches. called Santo Stefano Church. The oldest is actually a former Temple of Isis which was converted to a church in the 5th century. It has an empty crypt. I am not sure I am entirely right but I think it is supposed to signify the ascension of Jesus Christ to heaven.

I was intrigued by the shape of the crucifix on the outside of the main church (Chiesa di Croccifiso). It has the regular sides of a "+" sign instead of the Roman Catholic cross with the elongated vertical bar. Based on my limited knowledge of these matters I have always associated the "+" crucifix with the Eastern Orthodox or Greek church.

In the courtyard there is a basin in which Pontius Pilate allegedly washed his hands after condemning Christ to death. In fact apparently it is a Lombardian bathtub from the 8th century. The rest is marketing.