What is a Cooperative?

(from Cooperatively Moving Minnesota Forward)

Circle Yoga Cooperative was formed under Minnesota’s Cooperative Laws.  Cooperatives are defined by the National Cooperative Business Association (NCBA), the national umbrella organization for co-ops as:

  • They are member-owned and democratically controlled (one member, one vote).
  • Surplus revenues are returned to members proportionate to use, not by ownership share.
  • They exist solely to serve their members, thus, they are motivated to meet members’ needs for affordable and high quality goods and services, and not just to produce profits.

U.S. cooperatives pre-date the country’s official birth. In 1752, Benjamin Franklin founded the nation’s oldest, continuing cooperative, a Philadelphia fire insurance mutual. It had a rather long name: The Philadelphia Contributionship for the Insuring of Houses from Loss by Fire. It’s now simply known as The Philadelphia Contributionship, offering a multitude of insurance products and home security services.
The second oldest cooperative is the Associated Press.  New York newspapers preparing to cover the Mexican-American War (1846- 1848) formed the AP in 1846.
Seven Principles of Coops

Principles of cooperation date to a consumer cooperative in northern England in 1844. These principles set standards for cooperatives worldwide, but have had minor adjustment by the International Cooperative Alliance (Geneva).

  1. Voluntary and Open Membership
  2. Democratic Member Control (one member, one vote)
  3. Member Economic Participation
  4. Autonomy and Independence
  5. Education, Training and Information
  6. Cooperation among Cooperatives
  7. Concern for Community

 

Advantages of Cooperatives

(from Cooperatively Moving Minnesota Forward)
The United Nations has dedicated 2012 as the year for promoting cooperatives worldwide. Guy Tchami with the UN’s International Labor Organization (ILO) in Geneva, has summarized co-ops advantages over other types of companies.

  • Involvement by a significant group of participants can lead to greater innovation and collaboration within the enterprise.
  • The users are members, meaning the cooperative has first- hand information about consumers’ needs, purchasing patterns, habits and expectations.
  • A cooperative’s structure allows it to enjoy economies of scale.
  • Involvement by a significant group of participants can lead to greater innovation and collaboration within the enterprise.
  • Worker cooperatives better motivate employees because of their ownership role.
  • Members’ interests are better protected, resulting in better decision making on short-term economic issues and other financial problems.
  • The democratic decision-making process means the general direction of the organization tends to be more sustainable and representative of members’ needs.