What is a Cooperative?

“Not for profit, not for charity, but for service”

Cooperatives are business enterprises, not charitable organizations, so they are not non-profits; yet they don’t exist to maximize profits, so they are not the same as investor-owned firms.

Cooperatives are democratically owned and controlled by the people who benefit from them and are operated to provide services to the members.

In a co-op, the answer to the question of “who owns, who controls and who benefits from the cooperative?” is always the same – The cooperative members

7 Cooperative Principles

According to the NCBA there are seven principles that define a cooperative:

Cooperatives around the world generally operate according to the same core principles and values.  Cooperatives trace the roots of these principles to the first modern cooperative founded in Rochdale, England in 1844.

1. Voluntary and Open Membership

Cooperatives are voluntary organizations, open to all people able to use its services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.

2. Democratic Member Control

Cooperatives are democratic organizations controlled by their members—those who buy the goods or use the services of the cooperative—who actively participate in setting policies and making decisions.

3. Members’ Economic Participation

Members contribute equally to, and democratically control, the capital of the cooperative. This benefits members in proportion to the business they conduct with the cooperative rather than on the capital invested.

4. Autonomy and Independence

Cooperatives are autonomous, self-help organizations controlled by their members. If the co-op enters into agreements with other organizations or raises capital from external sources, it is done so based on terms that ensure democratic control by the members and maintains the cooperative’s autonomy.

5. Education, Training and Information

Cooperatives provide education and training for members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperative. Members also inform the general public about the nature and benefits of cooperatives.

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.

7. Concern for Community

While focusing on member needs, cooperatives work for the sustainable development of communities through policies and programs accepted by the members.