It’s Patronage Dividends Time of Year – Just What Is This??

It’s Patronage Dividends Time of Year – Just What Is This??

As explained on the Co-op’s website, “Patronage dividends are a traditional way for Co-ops to share profits back with their members. As Member-owners of the Co-op, you also own the profits, and a patronage dividend system allows us to share and reinvest those profits in a transparent, mutually beneficial way.”

The annual patronage dividend refund system is four years old.  This year, the Co-op Board of Directors voted unanimously to refund members 50% of the total patronage.  Last year’s refund was 40%. For a variety of reasons, General Manager Glenn Lower suggested we increase the refund to 50% for this year.  By early July, if a member-owners’ patronage dividend is more than $5.00, they will receive this refund in the mail.  Patronage dividends less than $5.00 will be combined and donated to the local food shelf.  Glenn and staff determined that pooling these small patronage dividends to make a meaningful donation in honor of these members was a better use of Co-op resources (time, paper, ink, postage) that would be expended to send these small checks through the mail.

Many of you have received these dividends in past years and wondered why and how this system works.  Member-owners receive a share of the profits from Co-op business in proportion to how much they purchased during the Co-op’s fiscal year (April 1 – March 31).  The more you shop, the more you are eligible to earn.  At the end of the fiscal year, if the Co-op is profitable, we as a Board of Directors review any anticipated projects and financial needs for the Co-op. We then use that information to determine how much of the profits to retain, and how much to give back to member-owners.  The amount retained stays in the Co-op, but please note, it belongs to the member-owners as a group and becomes part of what we own together as an investment in community ownership. The remaining profits are then returned by check or voucher to the member-owners. Law requires that at least 20% of patronage be returned to member-owners.

Nearly 80% of all sales this past year were to current member-owners! The return to each member-owner is slightly less than 1% of their purchases for the year. An estimate of the break down is below:

  • If a member spent $10/week=$4.70 will be donated to the food shelf
  • If a member spent $25/week=$11.74 in the patronage check
  • If a member spent $50/week=$23.48 in the patronage check
  • If a member spent $100/week=$46.95 in the patronage check
  • If a member spent $200/week=$93.91 in the patronage check

With 5,880 current member-owners, 3,717 members will receive a check for $5.00 or more, and the remaining patronage for the 2,163 members with a refund below $5.00 will be pooled for that donation to the food shelf. 

For more information about patronage, please see Your 2019 Patronage Dividends Check Explained

Sophie Esser Calvi is a Middlebury Natural Foods Co-op Board Member

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