HISTORY WITH WORKER OWNED ENTERPRISES
WPF has its roots in Harold and Louise Nielsen´s experience in turning FOLDCRAFT Co. into a worker owned enterprise, in this case in the form of an ESOP (Employee Stock Ownership Plan) with all shares in the name of the workers. Their trip to Mexico and Nicaragua in 1983 facilitated by the Center for Global Education and Experience at Augsburg University led them to do three things on their return: 1) sell their business to the workers under the US ESOP law; 2) use the funds from the sale to support similar employee owned income generating projects in Nicaragua generally in the form of cooperatives; and 3) help the Center for Global Education and Experience at Augsburg University to become self-sustaining in order to provide similar type experiences to other travelers from the US.
Cooperatives:
Nicaraguan is the Central American country with the largest number of cooperatives accounting for nearly half of all in the region. WPF began to work directly with cooperatives, focusing on grassroots producer cooperatives, by lending them money to collect the harvest. Most of these cooperatives were not subjects of credit from other institutions. Since 1997 WPF has lent just under $10 million dollars directly to grassroots cooperatives and community organizations, with an average loan size of $44,055 and a loan loss rate of 3.55%.
In 2011 WPF made the decision to combine the study of the organizational dynamics of grassroots cooperatives with the lending activity, and hired Dr. René Mendoza to lead that effort. In addition to accompanying many grassroots cooperatives and community organizations in addressing their own challenges, he and his team helped a number of grassroots cooperatives investigate the failure of their second tier cooperative in 2013, which wiped out their savings and member contributions. The team further helped them to negotiate a different resolution to the debt accumulated with a fair trade lender.
Rene and his team also investigated the impact of the decision of the state-run Banco Produzcamos to impound the assets of 7 cooperatives in the north, who had agreed years earlier to help the State collect on past due loans, all owed by other organizations. The government bank then suddenly and unfairly applied the unpaid balance of those loans to the cooperatives that the government had enlisted to help in their collection.
He has studied the implementation of fair trade principles in Nicaragua, and in 2017 published his findings with specific recommendations called the Reinvention of Fair Trade.
However, his research revealed that most cooperatives are such in name only. In fact, most are run like haciendas, where one or two people make the decisions with little or no consultation with the members, and capture most of the benefits. This is largely because most of them were formed at the initiative of outside actors, i.e. State and international aid agencies, who were looking for efficient ways to channel resources to impoverished rural populations, instead of organizing them to work together to solve common problems. These origins greatly distorted how the cooperatives functioned. It meant that people joined cooperatives not to work together, but to “access donated assets”. It also meant that members elected leaders who had established access to the donors, instead of those best at facilitating their organizing process. These origins did not put cooperatives on the path to success, as coops imply the active participation of all members to collectively respond to local problems which cannot be solved by acting individually.
Starting in 2015 WPF began to hold university sponsored Certificate Programs on Innovation, designed for leaders of member owned initiatives who do not have the academic background to receive university credit. These programs provide a space for joint learning, reflection and sharing by these peasant leaders about innovation in their own contexts. Among other topics, participants have been presented with tools to increase the effective participation of their membership, like Open Book Management and LEAN. They were held yearly in Nicaragua until COVID, and were then restarted with a Central American focus in 2025.
