Members' Meeting: Vote on Bylaws Change for Patronage Refund
 
 
 
2494 Victoria Avenue
San Luis Obispo, CA 93401
 
Monday - Saturday
8:30 AM - 7:30 PM
Sunday
10:00 AM - 5:00 PM 
 
San Luis Obispo's Neighborhood Market & Member Owned Co-Op
 
November 29, 2016
 
 
Patronage Refunds Explained
 
Many Co-op members are asking me since our last newsletter, “What are patronage refunds and why do we need to change our bylaws?” These are very good questions so I'll try to explain and add some information from the many co-ops across the country.
 
Before I get into the “nuts and bolts,” it would be good to remind everyone of our Special Members’ Meeting on Tuesday, December 13th at the SLO Guild Hall (formerly Grange), 2880 Broad Street, SLO at 7PM. Members will be voting on a bylaw change that would establish the Patronage Refund Program as an additional member benefit. At the meeting we also hope to discuss the Co-op in general — lots of new member benefits, how it can be improved, and what we need to do to survive in the competitive San Luis Obispo grocery and health products marketplace.

PATRONAGE REFUNDS
 
A patronage refund is simply the distribution of a portion of the net income, or profit, attributed to the purchases by members in a given year. There are a number of benefits both to the members and the Co-op:
 
1. Generally, Co-op profit is taxable income. However, by declaring a Patronage Refund, the Co-op’s net profit is not taxable.
 
2. Co-op members receive a check or credit distribution when the Co-op is profitable from 20-100% of the net income, and normally tax-free. That portion of the net income retained by the Co-op as an additional capital contribution and not paid in cash is credited to each member’s Capital Account.
 
3. The Patronage Refund Program provides tax-free capital to enable the Co-op to make improvements and plan for store expansion. The IRS requires the Co-op to pay a minimum of 20% to members, but allows the Co-op to retain up to 80% of the allocation; the retained portion provides a tax-free and interest-free way to allow the Co-op to make improvements or plan for expansion.
 
4. The Patronage Refund Program emphasizes ownership and equity which are real benefits to membership. When a cashier asks, “Are you a member,” we really should be asking, “Are you an owner?” All members really do own the business. Income is not whisked away to corporate headquarters in Dallas, Texas or New York City; it stays right here in SLO County.
 
Please attend the Special Members’ Meeting so that you can vote on a bylaws amendment to allow your San Luis Obispo Natural Foods Co-op to implement the Patronage Refund Program for 2017.
 
Links to what other co-ops are doing:
 
 
 
Eric Michielssen
Board President, SLO Natural Foods Co-op
 
 
 
Thanks for reading and being a Co-op Member. Your support of the store supports community health, local, sustainably grown food and farmers, and non-GMO standards.
 
If you've any questions or comments about the newsletter,
 
SLO Natural Foods, 2494 Victoria Ave. San Luis Obispo, CA 93401
www.SLONaturalFoods.coop       805-544-7928