Cooperative

Co-opoly: The Game of Cooperatives

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A cooperative (co-op) is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically controlled enterprise. [1]

In sum, cooperatives are:

  • User-owned – The people who own and finance the cooperative are those who use the cooperative.
  • User-controlled – The people who control the cooperative are those who use the cooperative.
  • User-benefiting – The cooperative’s sole purpose is to provide and distribute benefits to its users on the basis of their use. [2]

Therefore, when starting a cooperative, your first job is to decide who are the members and what benefits do they want from this cooperative.

Cooperatives bring tremendous value to people and communities around the world. They are businesses that are owned and controlled by the people who use them and that return profits back to their members.

Cooperatives exist in every industry, every geographic area, in rural and urban areas, serving rich and poor. It is a way of doing business as old as human life. Co-ops are owned by consumers, producers/farmers, workers, businesses/organizations, municipalities and governments, and other co-ops.

Cooperative businesses exist to meet their members' needs and they are focused more on service than investment. Cooperatives are owned and controlled by their members. Increased local control keeps the co-op in the community. In this business structure, surplus return to members, thus money is kept within a community. Consumers believe co-ops have better products and services at a lower cost, though this is not always the case. [3]

Contents

Values

Main article: Cooperative values.

Cooperatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility and caring for others.

Seven Cooperative Principles

Main article: Seven cooperative principles.

Cooperatives are guided by the "seven cooperative principles" as agreed upon by the International Cooperative Alliance (ICA): 1) Voluntary and Open Membership; 2) Democratic Member Control; 3) Member Economic Participation; 4) Autonomy and Independence; 5) Education, Training and Information; 6) Cooperation among Cooperatives; and 7) Concern for Community. (See the above link for a full description of each).

Types of Cooperatives

Main article: Types of Cooperatives.

There are a diverse array of co-ops, and therefore a number of different ways that co-ops operate and communities that co-ops serve. These include Worker cooperatives, Consumer co-ops, Food co-ops, Credit unions, Housing cooperatives, hybrid co-ops, and more.

Benefits of Cooperatives

Cooperatives bring the following types of benefits to their members:

  • Consumer co-ops – provide retail products and services for their customer members
  • Purchasing co-ops – purchase products and services in bulk to reduce or share costs for individual or organizational members
  • Marketing co-ops – build markets for members’ products and services, improve member bargaining power, facilitate delivery of products to market, and improve product quality
  • Value-added Processing Co-ops – add value to members’ products to increase members’ share of retail mark-ups
  • Worker co-ops – provide jobs for their members and services for their communities

See Also

References

  1. http://www.cdi.coop/icaprinciples.php
  2. "How to Start a Co-op" packet. http://www.cdi.coop/CDIcompletestart-uppkt2010.pdf
  3. This portion originally adapted with permission from: http://www.cdi.coop/whatsacoop.php
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