As Owners of the Co-op, you also own the profits, and a patronage dividend system allows us to share and reinvest those profits in a transparent, mutually beneficial way. Belfast Co-op owners can receive a portion of the Co-op’s profits through patronage dividends – your portion is determined by the amount you spent in that year. The Board of Directors determines annually if the Co-op can afford to distribute dividends. There’s no guarantee, but if the Co-op is fiscally healthy, we all benefit.
The letter below has gone out by email (or letter if we have no email on file) to all Co-op Owners regarding FY 2020-2021.
If you are eligible, your dividend is connected to your account and available to use at the cash register as payment on your purchases. If you would like to request cash or check payout, please ask at Customer Service. Under $20 may be paid out in cash, more than that amount must be paid out by check and will not be available immediately upon request. Additional options include paying down your remaining equity which helps benefit the financial health of the Co-op. Lastly, there are options to donate your dividend – details are below.
Thank you for your ongoing support of the Co-op!
Learn more about Patronage Dividends here
Thank you for supporting Belfast Co-op! Your support, along with the hard work of our valuable Co-op workers, helped the Co-op achieve financial success in a year where good news was in short supply. For the 2020-2021 fiscal year our net taxable income was $372,863 with 65% derived from owner purchases equaling $241,065. This later amount is eligible for distribution as patronage dividends. As a Belfast Co-op owner, you share in these profits.
Patronage dividends are a return of surplus income back to Co-op owners based on net income generated by owner sales and proportional to individual owner purchases. In other words, the more you spend as an owner, the more you get back in a dividend when the store makes a profit. Per IRS regulations for cooperatives, if the Board of Directors decides to distribute a portion of this surplus then taxes on the entirety of the profits from owner activity are forgiven so long as the Co-op distributes at least 20%. This benefit is a unique opportunity for Co-op owners to share in the success of their Co-op and help the Co-op build operating capital. Your Board of Directors has agreed to distribute 20% of the FY2020-2021 dividends in cash to owners in proportion to their purchases. This 20% to be distributed amounts to $48,213. Your Board recommends that the deferred 80%, totaling $192,852, should be retained by the Co-op and used to improve operations, make ongoing capital improvements, and continue strengthening our financial base in order to pay down current and future debt. The patronage dividend is not taxable income, as long as your purchases at the Co-op were for use in your household only, and not for business purposes.
Your Belfast Co-op Patronage Dividend (XXXX’s filled in with your specific amount on each letter)
• Your Total Purchases: XXXX What you spent at the Co-op between Oct 1, 2020, and Sep 30, 2021
• Your Dividend Allocation: XXXX Based on your purchases
• Your Distributed Portion: XXXX 20% of your allocation – this is what you get right now, available at check out when you use your owner number at purchase.
• Your Deferred Portion: XXXX This amount is retained and re-invested for the long-term financial security of the Co-op
All cash portions of the Patronage Dividend must be claimed by August 7, 2022.
If not claimed in full before this date you will forfeit the cash portion of your dividend. As a condition of your ownership in the Co-op, you accept the patronage dividend even if you do not claim the cash portion. The retained portion will remain in your name.
Once distributed, each owner will be given four options at the point of sale in store of how to utilize their 2020-2021 dividend:
1. Spend it toward new purchases at the Co-op
2. Pay off or pay down remaining owner equity balance to strengthen our Co-op. More owner equity = more capital to put towards improvements and reinvestment.
3. Donate it to the Co-op Equity Assistance Fund, which helps sponsor owner equity for those in need. Or donate to the PFAS Emergency relief fund to affected area farmers.
4. Receive cash or check payout.
After August 7th, 2022, any full or partially unclaimed distributed dividend after the deadline will be donated to the MOFGA/MFT PFAS Emergency Relief Fund. To learn more about PFAS In Maine, visit belfast.coop/pfas.
If you are not able to visit us in-store and want to discuss how to redeem your dividend, please contact the Belfast Co-op during business hours at 207-338-2532. If you have any other questions or comments, please contact the Board of Directors at board@belfast.coop.
In Cooperation,
John Krueger,
Treasurer – Belfast Co-op Board of Directors