Patronage Dividends
2024 Patronage Dividends
When a cooperative realizes a profit, IRS tax code allows it to return a portion of that profit back to the Member-Owners and therefore reduce its tax obligation. We are thrilled to announce that 2023 was another profitable year for our Co-op and we can once again issue patronage dividends this fall.
Letter from John Crane, General Manager
September 2024
Dear Portland Food Co-op Member-Owners,
Thank you for your continued support of our Co-op! In 2023 our Co-op was able to achieve financial success by realizing a net income of $172,902.
Whenever I announce net income numbers I must stress that net income is how we repay our debts. Interest on debt is considered an operating expense but the principle is not. We repay principle on debt from net income.
In 2024, we are making the final payments to Member-Owners who lent us the start up money to open our Co-op. We are successfully able to repay the final $160,000 in Member-Owner loan repayments this year because of our success in 2023. As of November of this year, all Member-Owners who lent us money to open our Co-op will have been repaid on-time and as agreed. Your support made this possible!!!
Now on to patronage dividends.
Our accountant recommended, and our Board approved, a patronage dividend dispersal of $21,709 based on 2023 net income. This will be divided among 3976 Member-Owners who shopped at the Co-op in 2023. This will be dispersed based on each Member-Owner's total Co-op purchases in 2023. Some will receive only a few cents while others will receive upwards of $80.00. This dividend is not taxable income for you.
You are absolutely welcome and encouraged to take this dividend. It is your reward for your support of our Co-op.
If you feel so inclined, however, we are providing the option for folks to donate their dividend to the India Street Neighborhood Association. Our Co-op is located in the India Street Neighborhood and the ISNA is a 501(c)(3) nonprofit neighborhood association dedicated to improving the quality of life for those who live in our neighborhood.
Thank you for your ongoing support of our Co-op. We truly are stronger together.
In Cooperation,
John Crane
General Manager
Important Points
This year’s dividends range from a few cents to around $80, depending on how much you purchased from the Co-op in 2023.
Dividend amounts are calculated only on purchases made in 2023.
All dividends have been applied to your MO account. The next time you shop, you can simply ask to have your dividend amount applied to your purchase. (It does not need to be used all at once). You can also have your dividend donated to the India Street Neighborhood Association.
Dividend amounts over $5 can be redeemed via a check instead of store credit. Email john.crane@porltandfood.coop if you would like to do this.
Curious about how much of a dividend you might have earned? Here is a very basic guide based on how much you purchased from the Co-op in 2023
Under $500 = $2.50 or less
Under $5000 = up to $26.00
Over $5000 = up to $96.00
When at the registers, the cashiers can look up your actual dividend amount. You are welcome to ask before making a decision.
You have until December 24, 2024 to claim your dividend. Dividends not claimed by December 24, 2024, will be donated to the India Street Neighborhood Association to further their work to support and advocate for the needs of the residents of our neighborhood.
________________________________
2023 Patronage Dividends
When a cooperative realizes a profit, it is allowed to return a portion of that profit back to the membership and therefore reduce its tax obligation. As a young co-op with a significant amount of start-up debt, we were unable to do this for our first few years. That changed when we issued our first patronage dividends last year. We are thrilled to announce that 2022 was another profitable year for our Co-op and we can issue patronage dividends again this fall.
Letter from John Crane, General Manager
September 2023
Dear Portland Food Co-op Member-Owner,
Thank you for your continued support of the Co-op! In 2022 our Co-op was able to achieve financial success by realizing a net income of $109,063.
Patronage dividends represent a return of surplus net income to Member-Owners based proportionately on how much each Member-Owner purchased throughout that year. IRS regulations state if the Board of Directors decides to distribute a portion of this surplus, then taxes on the entirety of net income from Member-Owner purchases are forgiven, provided the Co-op distributes at least 20%. This allows the Co-op to return a portion of net income to Member-Owners while reinvesting the balance in operating capital.
For this year, the Board of Directors has agreed to distribute 20% of this income to Member-Owners in proportion to their purchases, totaling $16,710 to split among 3,899 purchasing Member-Owners. The deferred $66,838 is retained by the Co-op and used to make ongoing capital improvements, ensure sufficient liquidity to enable operations, and maintain sufficient funding to pay down short- and long-term debt. This dividend is not taxable income to you.
Thank you for your ongoing support of our Co-op. We truly are stronger together.
In Cooperation,
John Crane
General Manager
Important Points
This year’s dividends range from a few cents to around $75, depending on how much you purchased from the Co-op in 2022.
All dividends have been applied as store credit to your Member-Owner account. The next time you shop, you can simply ask to have your dividend amount applied to your purchase. (It does not need to be used all at once.)
Dividend amounts over $5 can be redeemed via a check instead of store credit. Email john.crane@portlandfood.coop if you would like to do this.
Dividend amounts are calculated only on purchases made in 2022.
All dividends have been applied to your MO account. The next time you shop, you can simply ask to have your dividend amount applied to your purchase. (It does not need to be used all at once)
Dividend amounts over $5 can be redeemed via a check instead of store credit. Email john.crane@portlandfood.coop if you would like to do this.
CURIOUS ABOUT YOUR DIVIDEND?
Curious about how much of a dividend you might have earned? Here is a very basic guide based on how much you purchased from the Co-op in 2022
Under $500 = $2 or less
Under $5000 = up to $20
Over $5000 = up to $75.00
DEADLINE FOR CLAIMING
You have until December 27, 2023 to claim your dividend. Dividends not claimed by December 27, 2023, will be donated to the Cooperative Maine Business Alliance to support their work in developing Maine’s cooperative economy.