Cooperatives: a powerful business model

What is a cooperative?

A cooperative is defined in the Statement on the Cooperative Identity as 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.

 

 

Values 

According to the International Cooperative Alliance (ICA), cooperatives are based on the values of self-help, self-responsibility, democracy, equality, equity, and solidarity. Other deeply rooted cooperative values include honesty, openness, social responsibility and caring for others.

 

Principles

1. Voluntary and Open Membership

Cooperatives are voluntary organizations, 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. 

 

2. Democratic Member Control

Cooperatives are democratic organizations 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 cooperatives members have equal voting rights (one member, one vote) and cooperatives at other levels are also organized in a democratic manner. 

 

3. Member Economic Participation

Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. 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 cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership. 

 

4. Autonomy and Independence

Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.

 

5. Education, Training, and Information

Cooperatives 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.

 

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

Cooperatives work for the sustainable development of their communities through policies approved by their members.

 

Functioning of the governance

 

Types of Cooperatives 

  • Producer / Marketing Cooperatives 
  • Consumer Cooperatives 
  • Worker Cooperatives 
  • Housing Cooperatives 
  • Financial Cooperatives 
  • Multi-Stakeholder Cooperatives 
  • Collective conversion cooperatives 
  • Non-profit Community Service Coopératives 

 

Did you know? 

According to ICA’s data: 

  • More than 12% of humanity is part of any of the 3 million cooperatives in the world 
  • Cooperatives contribute to sustainable economic growth and stable, quality employment, providing jobs or work opportunities to 10% of the world’s employed population.