Chapter 14: A Change to Stay the Same

…on becoming a nonprofit

Ever since March 2020, GM Lisa Swayze and the Executive Board have been energetically exploring the idea of transforming the legal structure of the cooperative to put the bookstore on more stable financial footing. Sometimes this feels like a major step and we all feel quite daunted. This is more than a tweak to our existing structure, like the idea of simply adding an annual membership program that I discussed a few months back. But other times, this feels merely like a back-end process that need not affect our community’s experience of the bookstore and our events. This is a change that will enable us to remain the same—we hope.

Here's the thing: the cooperative was founded in April 2011 as a consumer coop, which is a purchasing coop, an organization designed for shared purchasing among a wide array of people who share an economic interest. And that was exactly what the cooperative did. It made an enormous shared purchase: the bookstore. But after that one very successful transaction, the structure of a consumer coop has no longer really benefited our organization. The main downside, as we’ve noted many times, is that our owners make one investment—the purchase of an owner share—and then there is no subsequent structure for investing in the business. Also, an owner share is fairly expensive at $250 and there is no structure for people of lesser means who would like to support the business. A further downside is that because we are a for-profit business, we do not have access to other funding mechanisms and must rely solely on our owners to invest in our growth.

Yet we do not act like a business. Sure, we run a retail store, but it has never made a profit, and our community has vigorously affirmed that it deserves to exist even so. And much of what Lisa and her staff do far exceeds the mandate of a retail store. Last year, they held over 70 in-store events, over 20 offsite events, and partnered with over 40 local organizations and schools. That includes 6 drag story hours, 5 makers markets, and 8 Reading Widely Book Club meets.

Some of these events are connected to newly published books, but I would guess almost half of them are not. The bookstore stages dozens of events—readings, game nights, open mics, salons—that gratify people’s needs for connection but are not primarily about selling books. Added to that, Lisa started the Ithaca is Books Festival, now headed into its fourth year this September, an event which has grown and gathered many community partners. The festival needs an institutional home if it continues to grow.

So what is the structure that best fits all of this enterprise? We think it’s a literary nonprofit. We think that by transforming the cooperative into a 501(c)(3), we can better further our mission and place the organization on financially sustainable ground. We would still be member-supported, with a lower annual (tax-deductible) contribution to fund our literary programming, and we would be able to expand that programming on a project basis by applying for grants. We know this could work. It’s just the getting there that’s tricky.

So we are in the process of figuring that out. We have found a lawyer with expertise in this area and are pelting her with questions. We are raising money to pay the lawyer. We are beginning the process of talking to our owners and community partners about this transformation. It's a steep learning curve, and by having lots of conversations, we can educate our owners while also testing out this idea and making sure we haven’t overlooked anything.

The reassuring part of this great unknown is that there are other literary nonprofits out there which run retail bookstores, so we have models upon which to pattern ourselves. In particular, we are looking to Bookmarks in Winston-Salem, NC, Hub City Books in Spartanburg, SC, Magic City Books in Tulsa, OK, and Writers & Books in Rochester, NY. We can look at their IRS applications when writing our own. The overall structure is similar to a museum which runs a gift shop.

To my knowledge, though, we would be the first to begin as a bookstore and then become a nonprofit. The others that I mentioned were something else first—a literary organization, a festival—that then started or bought a bookstore as a component. Please correct me if I am wrong! I’d love to know if there are other models we can follow. Do you know of anyone who has grown a literary nonprofit from a bookstore?

Right now, this is all pretty speculative, but we haven’t yet run into a reason this can’t work. We’d like to bring this idea to the ownership in the autumn for a vote at our annual meeting. (To that end, I have decided to run for a third time on the Executive Board to see this project through.)  We were an industry leader when we formed a cooperative in 2011, and we’ve remained in the vanguard as one of 23 coop bookstores in the nation, and one of the only consumer-owned coops. Now, we’re looking to do it again. Your thoughts??

Book Recommendation

I loved Isabella Hammad’s Enter Ghost. Sonia Nasir’s family are Palestinian Israelis but Sonia has largely grown up in London where she has become an actress. She returns to Haifa to visit her sister and joins a theater troupe that is staging Hamlet in the West Bank. This book beautifully overlays Sonia’s confrontation with her family’s history on top of an urgent set of conversations among the Palestinian actors about the role of art in contemporary politics.

For a smart, taut summer read, you can’t do better than Scarlett Thomas’s The Sleepwalkers. A young British couple honeymoons on a Greek island but their marriage is off to a bad start; a sentence that someone unsuspectingly uttered at their wedding has revealed something explosive, and much of the tension of the book comes from guessing what that sentence was. The proprietor of their guesthouse acts strangely toward them—is the unease in their marriage coloring the way they view the island’s inhabitants, or is something unsavory going on under their noses? Told in letters and documents, this book is accurately billed as Patricia Highsmith meets “The White Lotus”—who could resist?!