To satisfy various laws and regulations, the Food Co-op’s Articles of Incorporation was modified, and that required a vote of the membership. We held a general meeting, followed by a 25 day voting period, We met the requirements and began keeping the necessary records January 1, 2015, and the first dividends was distributed in 2016, after we knew whether or not we had a profit for 2015.

It saves the Food Co-op money and enables us to return a portion of the profits to our members, keeping more money in the community. Before patronage dividends, the Co-op used to pay more than 30% of our profits in taxes. A patronage dividend system allows us to keep that money.

In a patronage dividend system, when a co-op makes a profit, its members receive part of those profits as a dividend or “refund.” Each year the board of directors of the co-op determines if their co-op can afford to distribute dividends, and then dividends are determined by how much each member spent during the year.

Your annual dividend notice includes four important terms:

Allocated
This is the total patronage dividend you earned based on your eligible purchases during the calendar year.

Retained
This portion of your dividend remains invested in The Food Co-op as member equity. It still belongs to you—it is simply reinvested into the Co-op to help fund future improvements, equipment, expansions, and other capital projects that keep our cooperative strong.

Distributed
This is the portion of your dividend that is available for you to redeem. You can use it toward purchases, request a check, or donate it before the redemption deadline.

Donated
If your distributed dividend isn't redeemed within one year, it is considered donated in accordance with our bylaws. Those funds are donated to The Food Co-op's Twin Pines Cooperative Community Fund, where they help strengthen cooperatives and support grants that benefit our community.

Dividend payments are based on the Food Co-op’s profit and how much you spend at the Food Co-op during the year. The more you spend, the larger your dividend. Remember, though, the Co-op aims for just a 1-2% profit, so dividend payments will never be large.

Each year, the Board of Directors determines how much, if any, of the Co-op’s profits are designated as patronage dividends. According to IRS rules, at least 20% of the profits designated as patronage dividends must be distributed to the owner-members as cash or the equivalent. The Board may choose to retain the balance as equity, which the Co-op could use for such things as capital improvements or debt reduction. In essence, this enables us to transform taxable profit into member investment in the Co-op. The actual ratio of retained and distributed dividends will vary from year to year, depending on the amount of profit and the Co-op’s needs.

One of the strengths of a cooperative is planning for the future.

Each year, our Board of Directors determines how much of the annual patronage dividend should be distributed to member-owners and how much should be retained as member equity. Retaining a portion of the dividend allows The Food Co-op to invest in long-term improvements without relying entirely on loans.

Those retained funds help support projects like equipment upgrades, facility improvements, and future growth—helping keep our cooperative strong for generations to come.

Yes. Your retained patronage dividend is still yours—it has simply been invested back into the Co-op as member equity instead of being paid out in cash today.

Think of it like owning a lemonade stand with your friends. At the end of summer, you could split all the profits, or you could leave some in the business to buy a better table, a bigger pitcher, and a nicer sign.

The money you leave isn't gone—it's still part of what you own. It's just helping make the lemonade stand stronger for next summer.

That's how retained patronage dividends work. They help strengthen the Co-op today while remaining part of your ownership as member equity.

Beginning July 1, simply let your cashier know you'd like to redeem your distributed dividend.

You may choose to:

• Apply it toward your groceries.

• Request a check.

• Donate it to The Food Co-op's Twin Pines Cooperative Community Fund.

Distributed dividends must be redeemed by June 30 of the following year.

You'll have one full year to redeem your distributed dividend.

After the redemption deadline, any unclaimed distributed dividend is considered donated according to our bylaws to The Food Co-op's Twin Pines Cooperative Community Fund.

Your retained member equity is not affected.

Not necessarily.

Patronage dividends are only declared when The Food Co-op has sufficient profits and the Board of Directors approves a distribution. While our goal is to return value to our member-owners whenever possible, dividends are never guaranteed.

No, patronage dividends are not taxable income unless your purchases were for business purposes rather than personal use. If this is the case for you, please consult your tax adviser. Otherwise, patronage dividends are essentially a refund of money you spent in the store.

You can contact the General Manager, Kenna Eaton, at 360-385-2883 ext. 303, or the Board at coopboard@foodcoop.coop.