Your Board of Directors is responsible for ensuring that the cooperative maintains a strong financial position far into the future. At this time, the Board of Directors is pleased to report we have voted to distribute a patronage refund to member-owners based on our operational surplus income (profit) attributed to member sales between January 1, 2019, and December 31, 2019. Patronage dividends are a return of operating profits to member-owners based on net profit generated by member-owners.
Rising Tide’s total sales for 2019 were $7,125,938, a 3.9% increase over the previous year. The Total Net Profit was $84,125 with $56,000 of that Net Profit coming from sales to member-owners. Rising Tide is declaring the full patronage dividend as it will save us nearly $14,000 in taxes and is distributing the required 20%, thus $11,200, back to the member-owners who shopped at Rising Tide during 2019. In addition, the Co-op’s Bylaws require that we put 10% ($8415) of the Total Net Income into our Reserve Fund and donate .05% to an Educational Organization. This year, we will make a $250 donation to FARMS at the Y to support their agricultural and cooking programs with youth.
The patronage dividend is a refund on your purchases; it is therefore NOT considered to be taxable income by the IRS. Another way to look at it is that you are receiving a deferred discount on purchases you have already made at the co-op. Your refund amount is determined by how much your purchases contributed to our profit. In other words, the greater your purchases excluding discounts or sales, the greater your refund. This is a distinct business difference built into the cooperative model—rather than basing your return on the number of shares you own (the more you invest as a stockholder in a corporation, the greater your return and the more votes you have), the co-op’s surplus income is refunded to member-owners in proportion to how much they support the store with their purchasing dollars.
This year, we are again placing your dividend electronically on the point of sales system. Due to the administrative labor costs of processing all dividends (4830 total in 2019) anything less than a $3.00 dividend will be donated to Lincoln County Gleaners. The money will be used to purchase a chest freezer and refrigerator for storing gleaned and processed produce. This equipment will be housed in the Community Kitchen at Rising Tide, thus further strengthening our partnership with this and other local food security organizations. In turn, this will provide another resource to our community and enable efficient use of local produce to feed people throughout the year.
You can redeem your dividend three ways: 1.) At the cash register, our cashiers can view your dividend balance and place it against your purchases until the amount is exhausted, 2.) You may email our Bookkeeper, Ashley Lawson, at firstname.lastname@example.org and request a physical check, or, 3.) You may use it to make a tax-deductible contribution to the Lincoln County Gleaners. To make that donation, please email Ashley. It is very important that you redeem or donate your dividend distribution on or before June 30, 2021.
The Board of Directors would like to congratulate YOU on owning and patronizing our thriving local cooperative—thank you for your continued support! If you have any questions or comments, please contact General Manager, Heather Burt, at the store or at email@example.com.
On behalf of the Board of Directors of Rising Tide Co-op,
Graham J. Walsh, President