Dear Rising Tide Co-op Owner,
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, 2020 and December 31, 2020. Patronage dividends are a return of operating profits to member-owners based on net profit generated by member-owners.
Rising Tide’s total gross sales for 2020 were $8,051,620, a 13.0% increase over the previous year. The Total Net Profit was $636,300. Based on recommendations from our accountants, and guided by the Co-op’s Bylaws, the Rising Tide Board is declaring the full patronage dividend of $289,145. This decision saves us in taxes and enables us to distribute a more significant portion of the net profit back to the member-owners who shopped at Rising Tide during 2020. We will distribute $57,829 based on Rising Tide’s Bylaws. In addition, $38,553 will be deposited into our Reserve Fund and, as guided by the Bylaws, we will donate .05% to an Educational Organization. This year, we will increase the amount and make a $300 donation to The Morris Farm Trust in Wiscasset to support their work to promote agriculture and engage youth with farming experiences.
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 sale system. Due to the administrative labor costs of processing all dividends (4909 individual active owners in 2020), anything less than a $3.00 dividend will be donated to FARMS at the Y. This money will be used to support hands on gardening and cooking education programs in all AOS93 schools and through camps at their home base at the Central Lincoln County YMCA.
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 contribute to FARMS. To make that donation, please email Ashley. It is very important that you redeem or donate your dividend distribution on or before June 30, 2022.
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