Community Capital Working Group


Transforming Business Ownership for Economic and Social Justice
By Investing Strategically to Close the Wealth Gap

A Game Changer – Converting Businesses into Employee-Owned Enterprises

Transitioning businesses to employee ownership saves jobs, keeps wealth within local communities, diminishes barriers to racial and social equity, and enables owners to achieve an ownership legacy.

Study after study documents the powerful benefits achieved by employee-owned enterprises in terms of business productivity and longevity and, of course, for workers in terms of additional income and retirement savings as well as improved workplace conditions. Additionally, employee ownership can address racial and gender wealth gaps. One study found that employee-owners of color had a 30% higher wage income than do workers of color who were not employee-owners (NCEO 2017). Communities also benefit directly when successful, local businesses become employee-owned because it keeps the businesses and the jobs they sustain rooted in the local economy. This is especially critical  in the current pandemic environment in which many sound small  and medium-sized businesses have closed or are still facing potential bankruptcy.


Business conversions into employee-owned enterprises offer exciting triple bottom line opportunities to investors, workers, and local communities. It is no surprise that more than 20 local and state governments in the U.S. have designed programs to encourage such transactions. Because this model is based on converting already successful companies, it substantially lowers the risk to investors, entrepreneurs and workers, as compared to startup ventures.

Of course, this economic development strategy, like all others, has its complexities. For example, there are a number of legal forms an employee-owned enterprise can take. Perhaps the two best known are worker cooperatives and ESOPs, each of which enjoy unique characteristics. However, the purpose of our site is not to examine these nuances but to provide educational resources necessary for your exploration of this growing niche of the socially responsible economy and impact investment arena.  Nonetheless, rest assured that genuine worker participation in entity management is a fundamental criterion we evaluate.

To understand the essentials of ownership conversion, we encourage you to review some of the papers and webinars enumerated below. You will learn why a market for transfer of ownership exists as well as the general mechanics of the transactions and the many benefits transmitted.

Investing in Employee Ownership

While there is always the possibility to invest in an individual conversion, we believe that for most investors investing in a diversified portfolio of holdings is the most efficient strategy to employ. To this end we have reached out via questionnaire to all the funds we could find that meet our standards of conversion (democratic management) and reserve a considerable portion of their assets for the conversion objective. The questionnaire was designed with the individual investor in mind and attempts to provide answers to the most basic and common investor concerns. We have reproduced a number of the responses in the chart below to help investors compare “apples with apples”, and thereby simplify the path to follow in researching appropriate investments.


Interested investors should first read a fund’s full response to our questions, and then contact the fund to ascertain understanding of its representations. The full survey can be found by clicking the name of the fund in the survey results section below. The responses in the chart above may not fully reflect investment experience/track record and social priorities of the fund.


Disclaimer: We are not providing you with any legal, business, tax, or other advice in this briefing. You should consult your own advisors about any investment referred to in this briefing. You and the loan funds must comply with all laws and regulations that apply to any such investment. We have not reviewed any of these legal requirements and are not responsible for your compliance with these legal requirements. We are not making any representation to you regarding the legality of any investment under any law or regulation. The potential investments referred to in this briefing have not been recommended by any federal, state, or foreign securities authorities. Finally, we make no representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this briefing, which has been collected from third parties and has not been independently verified by us.

Help us strengthen our work:

Funds – We invite other funds to submit their information here. Take the Survey for Worker Conversion Funds

Investors – Please let us know if you invest in any of these funds so we can measure our success. 

For more information contact Eric Leenson or Babbie Jacobs.

Considering Employee Ownership For Your Company

Many owners of small and medium-sized businesses find it difficult to exit their business when they are ready to retire. The next generation may not wish to continue running the company. In addition, owners may worry that selling their businesses could mean job loss for long-time employees if the new owner moves or discontinues work.

Transitioning a company to worker ownership allows an owner to exit on their own timeline while sustaining their company’s mission. It also enables an owner to leave their legacy in the hands of employees who helped build the company. 

If you’d like to learn more about whether employee ownership might be a fit for your company, here are some useful links:

  • A short video description of employee ownership.
  • Stories and examples of businesses all over the country whose owners have sold to their workers can be found here and here
  • A list of service providers around the country who can support companies wanting to transition to worker ownership. 
  • Free consultation sign-up link (Project Equity helps business owners all over the country learn about worker coops, ESOPs and employee ownership trusts)
  • Apply Now & Transition Your Business to Worker-Ownership

Public Policy to Advance Employee Ownership

10-17-22 | UPDATE: Employee Ownership Policy

Governor Gavin Newsom signed the California Employee Ownership Act (Senate Bill 1407, Becker) into law on September 29th, making California the second state to have an employee ownership “hub” within a state agency, and the first to create it through legislation. Read the press release celebrating the new law here

The bill’s sponsors, Worker-Owned Recovery California, Project Equity, and Ownership America, are engaging with the Governor’s Office of Business and Economic Development to help inform the law’s implementation and to advocate for funding for outreach and technical assistance programs. 


  • California residents: please call your state senator’s and assembly member’s district offices to thank them for supporting SB 1407. The bill passed unanimously and we want to let everyone who voted for it know we appreciate their support of employee ownership. 
  • Advocates in other states: if you are interested in learning more about employee ownership policy efforts in California, and how you might take action in your state, contact Hilary Abell at Project Equity (
9-22-22 | UPDATE: Employee Ownership Policy

The California Employee Ownership Act (Senate Bill 1407, Becker) was approved by California’s Senate in May and by the Assembly committee in August – unanimously in both houses! Governor Newsom now has until September 30th to sign the bill. The bill’s sponsors, Worker-Owned Recovery California, Project Equity, and Ownership America, are optimistic that the Governor will sign the bill and are already making plans to advocate for a significant budget allocation next year to support its implementation. ASBN helped advocate for funding this year by co-sponsoring a joint sign-on letter with more than 150 organizations and hundreds of individuals signing on. Check out this Op-Ed by Senator Becker, who introduced SB 1408l, and follow its progress on WORC’s website or by contacting Hilary Abell at Project Equity (

The success of SB1407 is one example of growing momentum toward employee ownership in public policy. Another example, at the federal level, is the inclusion of employee ownership in the CHIPS and Science Act that President Biden signed into law in August. As the U.S. Federation of Worker Cooperatives explains in their summary, several provisions of this new law help tech and manufacturing businesses to learn about and pursue employee ownership models such as worker cooperatives and ESOPs.


Employee Ownership News

Race and Gender Wealth Equity and the Role of Employee Share Ownership – April 1, 2021  – Prepared by the Aspen Institute, Rutgers and the Democracy at Work Institute | Authored by  Jenny Weissbourd, Maureen Conway, Joyce Klein, Yoorie Chang, Joseph Blasi, Douglas Kruse, Melissa Hoover, Todd Leverette, Julian McKinley & Zen Trenholm

The Case for Employee Ownership | May 2020 | Prepared by Project Equity | Authored by  Hilary Abell

Conversions to Employee Ownership in a Succession Context – November 7, 2019 – Prepared by Transform Finance | Authored by Andrea Armeni and Camille Kerr

Employee Ownership and Economic Well-Being | 2017 | National Center for Employee Ownership 

Worker Owner Workbook | Prepared by Co-op Cincy

Opportunity Knocking: Impact Capital as the Transformational  Agent to Take Employee Ownership to Scale| January 2021| Prepared by the Democracy Collaborative | Authored by Jessica Rose, Marjorie Kelly, Sarah Stranahan, Michelle Camou & Karen Kahn

The Lending Opportunity of a Generation: FAQs and Case Studies for Investing in Businesses Converting to Worker Ownership | 2016 | Prepared by Cooperative Fund of New England, Democracy at Work Institute and Project Equity | Authored by Dorian Gregory, Micha Josephy, Camille Kerr and Alison Lingane

Investment Capital for Worker Cooperatives (2 parts) | 2017 | Prepared by Project Equity | Authored by Alison Lingane and Annie McShiras

 Who Should Own Your Business After You?, National Center for Employee Ownership 

 Using an ESOP for Business Transition. National Center for Employee Ownership

Are ESOPs Really More Complex and Costly Than Other Ways to Sell a Business? 

This article has links to an article comparing versus selling to another buyer. National Center for Employee Ownership 

Selling to an ESOP | Prepared by National Center for Employee Ownership | Authored by  Christopher J. Clarkson, Ronald J. Gilbert, Stacie Jacobsen, Corey Rosen, Paige A. Ryan, and Kenneth E. Serwinski 


Partner Organizations | EO= 

Project Members

History of Transforming Ownership Work within the Organization

ASBC, dating back to 2012, has been educating and organizing through our ever-evolving “Ownership4All” campaign  advancing worker ownership in its many different forms as represented by diverse sets of stakeholders as an essential element of our efforts to create a more just and sustainable economy.  Our work contributed to the 2018 passage of the bipartisan Main Street Employee Ownership Act. We have assembled our ASBC members with the Department of Labor, from meeting with the Secretary of Labor, to their Assistant Secretary of Labor  for Employee Benefits Security Administration, over to the White House Task Force on Worker Empowerment, all to move a greater understanding of the role that worker ownership can play in an inclusive economy.

The following events are no longer available:

Exploring Employee Ownership: Why Business Owners Choose it and what it Could Offer Your Company | Friday, October 21st | 1:00-2:15pm ET |

In Depth Conversations with Employee Ownership Experts | Friday, October 28th |1:00-2:00pm ET