Nonprofit Organizations Incubating Worker Cooperatives

From Co-opLAw.org

Many nonprofit organizations are increasingly considering worker-owned business development as a powerful tool for community economic development. This is because worker-owned businesses and cooperatives align with the mission of nonprofit organizations that are seeking to build economic empowerment and opportunity in low-income and marginalized communities.  However, nonprofits should be aware of the risks that come with business development in general, and worker-owned business development in particular. The most important legal risks from the nonprofit’s perspective include jeopardizing the organization’s tax-exempt status and becoming liable for the actions of the cooperative.

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