What is a Co-op?

Cooperatives are owned and controlled by the people who use them. Cooperatives differ from other businesses because they are member owned and operate for the mutual benefit of members.

Cooperatives

  • primarily controlled by a board of directors elected by and from members
  • derive equity from member owners
  • operate for the benefit of member owners
  • provide services at cost
  • allocate earnings to members based on use
  • earnings from member business is taxed once
  • have perpetual existence

Types of Cooperatives

  • Consumer
  • Purchasing & Shared
  • Worker
  • Producer
  • Hybrid

Co-ops of all kinds are all around you. More than 800 million people around the world belong to cooperatives, and at least 100 million of them are employed by co-ops. Industries covered by cooperatives include agriculture, credit unions, utility, healthcare, insurance, housing and child care to name a few

Co-op Principles

The cooperative principles are guidelines by which cooperatives put their values into practices.

Principle 1: Voluntary and Open Membership
Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.

Principle 2: Democratic Member Control
Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary cooperatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organized in a democratic manner.

Principle 3: Member Economic Participation
Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.

Principle 4: Autonomy and Independence
Cooperatives are autonomous, self-help organizations controlled by their members. If they enter to agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.

Principle 5: Education, Training and Information
Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their cooperatives. They inform the public - particularly young people and opinion leaders - about the nature and benefits of cooperation.

Principle 6: Cooperation among Cooperatives
Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.

Principle 7: Concern for Community
Cooperatives work for the sustainable development of their communities through policies approved by their members.

Start a Co-op

Centers for cooperative development can help you form a cooperative or provide assistance with your cooperative business. A number of them are affiliated with public universities.

The following are helpful links with information on how to form a cooperative:

USDA Rural Development

Cooperative Development Institute