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Employee Ownership: Creating more resiliency for workers, businesses and communities

Employee Ownership: Creating more resiliency for workers, businesses and communities

Among the many social determinants of health (SDoH) are quality jobs and the ability to build assets and generational family wealth. In the last year, the COVID-19 impact on jobs, housing and the economy has critically highlighted the fragility of our systems and the racial inequities that have existed for generations.

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One way to reduce the racial wealth gap is through asset building and quality jobs. Alliance is a new investment partner for a collaborative Fund created by Project-Equity and Mission Driven Finance that will support small businesses in their transition to employee ownership.  The fund is specifically focused on supporting small to mid-sized companies with majority front-line workers and workers of color. Employee ownership is an evidence-based model that has been shown to help increase median wage income by 33%, increase household net worth by 92%, and improve median job tenure by 53%(1). One recent example of a local employee-ownership transition is Taylor Guitars (not a Project-Equity client), which announced in January 2021 that it had completed the transfer of ownership of the company to its 1200 employees.

What’s in it for the employee?
1. High quality jobs usually at higher-than-market wages
2. Shared entrepreneurship and leadership opportunities inside the business
3. Participation in the decision-making of the business for the benefit of employees, community and the company
4. Benefit from wealth-building aspects of company ownership
5. Overall better social well-being and life satisfaction

There are a number of reasons for company owners to consider converting their business to employee ownership:
1. It’s a great succession plan for owners wanting to sustain their legacy and receive market value for their many years of hard work.
2. Broad-based employee ownership has been shown to sustain quality jobs and create stronger businesses with improved profit margins, sales and employment

To learn more about employee ownership from Project-Equity, click here.  Locally, San Diego Workforce Partnership recently posted this informational story.  And, for interactive understanding, you may want to attend an upcoming event on June 17 hosted by San Diego Workforce Partnership and Project-Equity. Information and registration.

About Project-Equity
Project Equity is a national leader in the movement to harness employee ownership to maintain thriving local business communities, honor selling owners’ legacies, and address income and wealth inequality. Headquartered in the San Francisco Bay Area, Project Equity works with partners around the country to raise awareness about employee ownership as an exit strategy for business owners, and as an important approach for increasing employee engagement and wellbeing. We also provide hands on consulting and support to companies that want to transition to employee ownership, as well as to the new employee-owners to ensure that they, and their businesses, thrive after the transition. Visit https://project-equity.org

About Mission Driven Finance
Mission Driven Finance is an impact investment firm dedicated to building a financial system that ensures good businesses have sufficient affordable access to capital. Built from the ground up with a single purpose—to make it easy to invest in your community—all our funds and structured products are designed to close financial gaps that close opportunity gaps. We actively develop impact investment opportunities that are simple, transformative, and aligned. Visit https://www.missiondrivenfinance.com/ 

(1) Based on a 2017 study from the National Center for Employee Ownership
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MEDIA CONTACT: Karen Winston, Director of Communications 858-348-6472 karen.winston@alliancehf.org/a>
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