What is a Cooperative

What is a Cooperative

Cooperatives Are�

Businesses�

A cooperative is a business. In many ways it's like any other business; but in several important ways it's unique and different. A cooperative business belongs to the people who use it � people who have organized to provide themselves with the goods and services they need.

These member-owners share equally in the control of their cooperative � they meet at regular intervals, hear detailed reports and elect directors from among themselves. The directors in turn hire management to manage the day-to-day affairs of the cooperative in a way that services the members' interests.

Members invest in shares in the business to provide capital for a strong and efficient operation. All net savings (profits) left after bills are paid and money is set aside for operations and improvements, are returned to co-op members.

For Everyone�
Over 100 million people are members of 47,000 U.S. cooperatives. These people have organized to provide themselves with goods and services in nearly every sector of our economy. Their cooperatives may be organized in a number of ways and for many purposes.

For Their Members' Benefit�
Cooperatives operate for the benefit of member-owners. In a cooperative, those with similar needs act together and pool their resources for mutual gain. But the returns are not just monetary. Members ensure that their cooperative business provides the best quality products and services at the lowest possible cost. Members control the business through participation in their cooperative; they extend democratic practice into their economic lives.

United�
Cooperative work together on the local, regional and national level to promote exchange among cooperatives, foster cooperative development, provide educational services and provide a forum for examining and acting on common concerns for cooperatives. Numerous cooperative associations throughout the United States provide industry-specific services, educational programs and financial and other services to their member cooperatives.

Cooperatives are united internationally as well. Over 200 national cooperative organizations representing 92 nations belong to the International Cooperative Alliance (ICA), the apex organization of all national cooperative movements. The ICA aims to promote cooperative development and trade worldwide and boasts an individual membership of more than 700 million people.

Organized on Six Principles�

Regardless of their structure cooperatives generally use the same principles as adopted by the International Cooperative Alliance in 1966.

These principles are:

1. Open and voluntary membership. A cooperative is open to anyone who can use its services and is willing to accept the responsibilities of membership.

2. Democratic Control. Members are equal co-owners in the business and have a say on a one member, one vote basis (in contrast to one share, one vote in private companies).

3. Limited Interest on shares. Investments in the cooperative pay limited interest to insulate the membership from those who would invest purely for speculative return.

4. Return of surplus to members. All net earnings (profits) are returned to members proportionally to their patronage with the business. These returns are commonly made partially in cash and partially in cooperative dividends.

5. Constant education. Cooperatives provide education in the principles and practices of cooperative business, so that members will be good decision makers and so the general public will better understand cooperatives.

6. Cooperation among cooperatives. Cooperatives work together at the local, regional, national and international levels to further economic democracy.
Organizations to contact regarding starting a Cooperative:

Center for Cooperatives
University of California - Davis
Davis, CA 95616
(916) 752-2408 Fax (916) 752-5451

Co-op Resource Center
1442A Walnut Street, Suite 415
Berkeley, CA 94709-1405
(510) 538-0454

National Cooperative Business Association
1401 New York Avenue, NW Suite 1100
Washington, DC 20005
(202) 638-6222 Fax (202) 638-1374

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