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Cooperative Vocabulary

These are very general cooperative terms. Below you will find a basic list of cooperative terminology.

General Co-op

Buy-In: This is what members financially contribute to the co-op to become a member. This can be paid immediately or over an extended period of time.

Share: This is a member's “portion” of the co-op that establishes them as an equal owner. No co-op member can have more than one, they are not transferable for money or anything else, and all are exactly equal.

Co-operator: This is a member of a cooperative or someone who supports the general cooperative cause/community.

Member: Any co-op owner who has economically contributed capital through the purchase of a share.

Surplus (Profit): This is the amount of money that the co-op has made at they end of the year. In a standard business it is referred to as a “profit.” This surplus can be divided up in different ways - depending on the type of co-op. It can be divided up amongst members, invested back into the business, saved for a rainy day, and more. A successful co-op, however, will do a combination of these things.

One Member, One Vote: Members are entitled to one vote each when making decisions and no more despite their rank, level, age, years they’ve been in the co-op, financial commitment, or anything else.

Majority-Based: This is a form of decision making in which only more than half (50%) of the members need to vote for a decision for it to pass.

Consensus: This is a decision making process in which everyone has to agree on something for it to pass a vote and be decided on. (Unless there are fall back options).

Worker Cooperatives

Worker Cooperatives: This is a business that is owned equally and run democratically by all of the workers in it, and only by the workers in it – not outside investors.

Worker Ownership (Worker Owned): This is when the workers own the businesses and thus they have control over it while also being responsible for the business’s surplus or losses.

Worker-Owner: This is a co-op worker who owns a share of the business, receives co-op benefits, and has an equal say in how the co-op functions.

Workplace Democracy: This is the practice in which the workers of the business make the major and small decisions. This can be done in all worker meetings, work teams, shop-floor committees, and more.

Worker Self-Management: Worker self-management is a form of workplace decision-making in which the workers themselves agree on choices (for issues like customer care, general production methods, scheduling, division of labour etc.) instead of an owner or traditional supervisor telling workers what to do, how to do it and where to do it.

Self-Managed Business: This is another term for a worker co-op (or collective), but which emphasizes the fact that the workers manage it.

Worker Collective: This is a type of worker cooperative that abolishes any form of hierarchy and strictly uses a consensus decision-making process. (See also: Differences Between Worker Cooperatives and Collectives)


Credit Unions (Financial / Banking Cooperatives)

Credit Union: a financial cooperative that provides financial services at competitive rates to its members.

Services: many credit unions offer the same services as banks, including ATMS, but some do not. Credit unions tend to have better interest rates because they serve members, not shareholders.

Accountability: credit unions are accountable to its members, the people within their community. Banks are accountable to shareholders (outside investors).

Participation : one becomes a member of a credit union by opening an account. All members have the opportunity to contribute to committees and have access to information about its banking practices.

Governance: credit unions are controlled by their members, but are advised by an elected, volunteer board of directors. The board of directors set interest rates and governing policies.

Not-for-Profit : credit unions operate to serve their members rather than maximize their profits. However, they are not “non-profit” because they rely on revenue not donations. Credit unions use their profits to benefit members by giving them higher interest and better loans.

National Credit Union Association (NCUA): an independent federal agency that provides credit unions with the same financial security as banks. The President of the United States appoints a three-member board to manage NCUA. No two board members can be from the same political party and each serves a staggered six-year term.

Field of Membership: credit unions only accept members from specific areas, thus when you join a credit union you join a community.

Community Development Credit Unions (CDCUs): develop economic security in marginalized, low-income communities without access to banks.

Red-Lining : a term for bank exclusion of certain areas (low-income, minority, immigrant). Historically, banks have denied these people access to loans, mortgages, and accounts. CDCUs combat this practice by giving equal banking opportunities to under served areas.


Housing Cooperatives

Limited Equity Housing Cooperative: A property-holding cooperative in which both the equity required to purchase a unit and the profit from sale are limited, keeping housing permanently affordable. 

Common Equity Cooperative: A group equity cooperative is one in which the equity is held by the organization, and not by any individual member. This type of cooperative is also referred to as “zero equity” - because members generally contribute no equity upon joining,  “perpetual equity” - because the equity held by the organization continues to constantly increase over time and is never paid out to members, and as "group equity" - because all equity stays with the group. The North American Students of Cooperation is a membership association with its base in common equity housing cooperatives.

Market Rate Housing Cooperative: A property-holding cooperative via which you can buy or sell a membership or shares at whatever price the market will bear. Purchase prices and equity accumulation are very similar to condominium or single-family ownership.