What is a Co-op?
While the modern co-operative movement has been in existence for more than one hundred and fifty years — and its roots go back even further in history — the co-op business model has been receiving renewed attention in recent years, most recently with the United Nations’ designation of 2012 as the International Year of Co-operatives.
A co-operative can be used to accomplish almost any purpose: to fulfill a need, obtain a product or service, produce a product or service, or secure employment. Most co-ops are focused on one of these activities, but many of them address a combination of these activities. Around the world, co-ops operate in all sectors of the economy, from agricultural and fishery co-ops to food co-ops, industrial manufacturing to financial services, healthcare to the arts. From small-scale community co-ops to multimillion-dollar enterprises, co-ops include almost 1 billion members and employ 100 million women and men (more than multinational corporations).
What makes a co-op unique is that it is owned and democratically governed by its members, the people who use its products or services, or are employed by the business. The purpose of the enterprise it to not to accumulate profit for investors but to meet the goals and aspirations of its members. For this reason, any surplus generated by a co-op is reinvested in the business or returned to the members based on their use of its services. Membership in the co-op is obtained through the purchase of a member share in the business, which does not change in value (in contrast to publicly traded corporations) and entitles the member to one vote in matters that come before the members.
In many countries, co-ops are recognized by the government for their unique contribution to community development. The Italian Constitution, for example, “acknowledges the social function of co-operation as a form of mutual aid devoid of all private speculative intent.” In the United States, the federal government has promoted the co-operative business model in many areas of the economy, including rural electricity and telecommunications, housing and farming. The US Department of Agriculture defines a co-op as a “user-owned, user-controlled business that distributes benefits on the basis of use.”
In 1893, leaders from around the world founded the International Co-operative Alliance (ICA) with the goal of defining the co-op business model, promoting its use around the world and defending the unique values and principles that make co-operatives a viable alternative to business as usual. In 1995, the ICA created this update to the Co-operative Identity:
A co-operative 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.
Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity, and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others.
For more information, visit the website of the International Co-operative Alliance, www.ica.coop.m condimentum.