Hilary Abell

Hilary Abell, co-founder of Oakland based startup Project Equity, talks about her organization's mission to help small business owners secure their company's future by transferring ownership to the employees.

TRANSCRIPT

Speaker 1:You're listening to cake, a l x Berkeley 90.7 Fam, university of California listener supported radio. And this is method to the madness coming at you from the Public Affairs Department here at Calyx celebrating the innovative spirit of the bay area. I'm your host Ali Nasar. And today we have Hillary [00:00:30] at bell with us. Hi Hillary. How are you? Hi Lee. I'm doing great. And Hillary is the cofounder of project equity. Um, it's a a, is it a startup or as relatively 

Speaker 2:we are a startup. We'll have our third anniversary and a couple of weeks. 

Speaker 1:Third Anniversary. Yeah, based in Oakland. That's right. And a really interesting idea we want to get into. And every, uh, cofounder I have on the show, Hillary, I usually start by asking, uh, the same question, which is, uh, you're someone who started an organization from scratch [00:01:00] because you saw an issue. So can you give us the problem statement? What is project equity trying to solve? 

Speaker 2:We're aiming to address the growing income and wealth gap between the rich and the poor across this country in particular starting in the bay area and in other regions where we're already working. I personally have been working with employee ownership and worker cooperatives for the last 13 years intensively. And, and going back further than that, and I know from my own experience that there are powerful [00:01:30] force for improving job quality and building wealth for low wage workers. And my co founder Alison Lin gain has decades of experience in larger scale social ventures for profit and nonprofit. And we share this passion for addressing the wealth gap, the racial wealth gap and income inequality. And when we realize that my experience in worker cooperative development and employee ownership and her experience with larger scale social ventures, we're a perfect combination. We decided to launch something new to take on this problem. 

Speaker 1:Okay. Well it's a really fascinating [00:02:00] idea. I'm really excited that you're here today. Really speaks to me. And before we get into kind of what it, what project we does and what a work we're cooperative is. Can you, uh, just give us a little bit about your background. How did you and your journey come to looking at and saw seeing this problem that you want to solve? 

Speaker 2:Sure. So, so I started out right after college as a teacher in the inner city and that wasn't something I was able to do for a long time. I wasn't great at classroom management, but I did get to see urban poverty up close, get to see the resilience and the amazing [00:02:30] kids that were in those communities. Um, so that was one of my first, um, influences on why I care about this problem. I then worked for a worker owned company called equal exchange. And I got into that not because I was interested in business to be honest. I wanted to be on the front lines of social change. But I came to equal exchange through some community organizing I had been doing in relation to the wars in Central America. And when the war in El Salvador ended, um, equal exchange approached me and others at organization I was working for [00:03:00] at the time about using coffee and fair trade coffee in particular to help promote peace in El Salvador after the war. 

Speaker 2:And so through that and through the fair trade mission, I got into using business as a tool for social change. And I was in my sort of mid twenties and learned how to be a salesperson, something I never thought I would do. I learned how to work with farmer partners in Latin America who were organized in cooperatives and also got elected to the board of directors of that growing company of equal exchange as a worker [00:03:30] owner. So I also experienced incredible learning. I got to sit next to leaders of larger scale, socially responsible companies on that board and learn about business and how business can be a force for good. So that opened my perspective and helped me see how cooperatives can change the world. And from there I did a bunch of work in the nonprofit sector related to fair trade and other international issues and then found myself working with a local organization in Oakland called wages. 

Speaker 2:And we were building cooperatives and work around businesses [00:04:00] from the ground up here in the bay area. And that's, I was there for eight years and we saw incredible impact from the work we were doing. We built five eco-friendly home cleaning businesses that were owned by about a hundred immigrant women from Mexico and Central America. Wow. How cool. It was really exciting and I saw an incredible change from the time I started there in 2003 to when I left in 2011 when I first got there, we were doing an impact study that one of our foundation funders had helped us set up and we found that one of the cooperatives [00:04:30] was experiencing 40% increases in household income among their members. Wow. And that was very inspiring. That really mattered 

Speaker 1:to cut the middleman basically. Like they, they were getting all the income straight to them, 

Speaker 2:the workers. That's right. And they also built and owned together an infrastructure that would support them growing the company and working full time instead of working part time. Okay. So it was a combination of sort of better hourly pay and full time work and stability instead of just kind of casual variable schedules. And then they [00:05:00] got health insurance as well. And so that inspired us to try to scale up that model. We built a larger cooperative business in Oakland that eventually got to have 35 women [inaudible] owning it and then built a new one in San Francisco as well. And through the one in Oakland, we saw that eventually their household incomes were increasing by 80% wow. So went from 40 to 80 and the good trend. Yeah. Yeah. That was a great, it was a great trend and not all employee on businesses will have, you know, that degree of increase in, in [00:05:30] household income. But in general they do create better quality jobs. And so when I saw that [inaudible] I just knew that I wanted to do more of it and wanted to make the business model of employee ownership more accessible to to more low wage workers. 

Speaker 1:Yeah. What a, what a fascinating journey that you've been on. And thanks for sharing. Uh, we're talking to Hillary Ebell. She's a cofounder of project equity here on method to the madness on KLX Berkeley. Um, and before we go further into what project equity [00:06:00] does, I'd love to just take a step back and have you define for us what is a worker owned cooperative 

Speaker 2:project? Equity works with employee on businesses in different forms. And the one that we've started with and work most closely with is the worker owned cooperative. The definition of a Co op is a business that's owned and controlled by its members. So in the case of an employee owned cooperative, it's the people who work there who own the business and control it democratically by having the majority of seats on [00:06:30] the board of directors. So that's kind of the fundamental definition. There are actually seven cooperative principles that govern consumer cooperatives, farmer cooperatives, credit unions, and other kinds of cooperatives that are actually much more prevalent than worker owned cooperatives in this country. So there are seven common principles 

Speaker 1:and what, what is the, is there a governing body for cooperators? What are those seven principles? Who, who owns those? 

Speaker 2:There's something called the international cooperative alliance, which is global and does have kind of regional networks [00:07:00] through different parts of the world and has, you know, subsets for the different types of cooperatives. Um, and then there's also the model of employee stock ownership plans, also known as Aesop's, which is a u s specific model that is more commonly practiced than worker cooperatives. And we also see that as having a great role to play in this movement. And it's something that we're looking forward to working with directly as well. 

Speaker 1:So, um, let's talk a little bit more about the aim of project equity. Um, so you've given us some generalities around, um, your background and, and, uh, [00:07:30] the power that you've seen of unlocking business for, for, uh, for good. But it seems when I was doing some research on your company or your organization, you guys are, um, really focused on transferring, uh, companies and who are currently owned by an owner and a different ownership structure and, uh, having them go through a transition as opposed to starting something from scratch. That's right. You tell, tell me more about why that's the strategy you guys pursued. 

Speaker 2:That was a very explicit decision [00:08:00] for us in our first year. Um, 2014, we were fortunate enough to have a grant that allowed us to research different pathways to scale as we like to refer to them. So we looked at doing scale oriented startups and we looked at converting successful existing businesses to employee ownership. And we did choose the ladder. We were one of the first movers and an early champion of this strategy, which is actually now, um, being, uh, uh, uptaken has been taken up by, um, actors around the country and we're part of a national [00:08:30] collaborative and a growing movement that's supporting transitioning successful businesses. And there's two reasons that project equity saw this opportunity. One is that demographically the huge shift that we're go