What is a cooperative?
Cooperatives are people-centred enterprises owned and run by and for their members to realise their common dreams. Profits generated are either reinvested in the enterprise or returned to the members.
Cooperatives bring people together in a democratic and equal way. Whether the members are the customers, employees, users or residents, cooperatives are democratically managed by the ‘one member, one vote’ rule. Members share equal voting rights regardless of the amount of capital they put into the enterprise. They allow people to take control of their economic future and, because they are not owned by shareholders, the economic and social benefits of their activity stay in the communities where they are established.
As businesses driven by values not just profit, cooperatives share internationally agreed principles and act together to build a better world through cooperation. Putting fairness and equality at the heart of the enterprise, cooperatives around the world are allowing people to work together to create sustainable enterprises that generate long-term jobs and prosperity.
Cooperative economic development, characterised by the search for means of production and efficient exchanges based on cooperation, is there to improve people’s lives and look after the environment. This is far for being a marginal phenomenon, one in every six people on the planet are cooperators.
Look at an International Cooperative Alliance fact sheet on the differences between cooperatives, conventional enterprises and non-profit organisations.
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.
The co-operative principles are guidelines by which co-operatives put their values into practice. We have seven (7) universally accepted principles that differentiate all cooperatives from other secular business(es)
PRINCIPLE ONE (1) Voluntary and Open Membership
Co-operatives are voluntary organisations, 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 TWO (2) Democratic Member Control
Co-operatives are democratic organisations 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 co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organised in a democratic manner.
PRINCIPLE THREE (3) Member Economic Participation
Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. 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 co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.
PRINCIPLE FOUR (4) Autonomy and Independence
Co-operatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.
PRINCIPLE FIVE (5) Education, Training and Information
Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public – particularly young people and opinion leaders – about the nature and benefits of co-operation.
PRINCIPLE SIX (6) Co-operation among Co-operatives
Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.
PRINCIPLE SEVEN (7) Concern for Community
Co-operatives work for the sustainable development of their communities through policies approved by their members