Cooperatives

Learn about the history and diversity of cooperatives. Working together cooperatively has long been an important part of human endeavors. The modern cooperative movement began during the Industrial Revolution as a reaction to economic displacement and exploitation. The first formal cooperative was started in 1844 by the Rochdale Pioneers in England when weavers and tradesmen started a cooperative society to sell their goods. Based on business principles, the Rochdale Cooperative helped provide their community with quality goods that they might otherwise be unable to afford. From that beginning the International Cooperative Alliance was established in 1895 to broaden the reach of the cooperative movement. It is still the leading institution uniting and representing cooperative associations globally. There are many areas of daily community and economic life where cooperatives (also called co-ops and identified by their internet address .coop) play a vital role, including:

• Agricultural. Various types of farmer cooperatives exist and offer their members the ability to share resources and knowledge, as well as help keep profits on the farm. One of the most successful farmer cooperatives in Mexico, Union de Ejidos San Fernandos, has improved the livelihood of over 1300 small coffee farmers. Part of its success is achieved through its efforts to grow and harvest coffee in an environmentally friendly way. The cooperative has shown the potential link between ecological stewardship and economic prosperity.
• Worker. A worker cooperative is an enterprise that is owned and managed by its workers. At the Edinburgh Bicycle Cooperative, Scotland's oldest modern cooperative, all profits are shared equally amongst the workers, and all decisions are democratically made. Higher worker engagement and productivity, as well as the realization that cooperatives are more equitable and socially responsible, are factors that are helping to increase the number of small-scale worker cooperatives.
• Producer. Producer cooperatives are owned by people who produce the same type of goods or services and work together for their own benefit rather than the benefit of outside investors. Organic Valley is the largest organic dairy cooperative in the United States. With the increasing pressure on small, family-owned farms to sell out to large corporations or go under, a producer cooperative such as Organic Valley can step in to provide critical support. Last year, Organic Valley added 84 family farms, giving the farms more economic opportunity and keeping the food system diversified among local communities. 
• Consumer. Consumer cooperatives are businesses owned by the people who use them, usually as members, and managed democratically. They are one of the most common type of cooperative in the world. Examples include food, electric, and telephone cooperatives. The recreational giant REI is a consumer cooperative with 23 million members. It maintains a focus on meeting the needs of the members rather than solely on profit.
• Service. Community service cooperatives exist to fulfill a specific need within a defined community. Examples include daycare centers, youth work cooperatives, and services for people with disabilities. In Canada, the Foodlands Cooperative of British Columbia works for sustainable land use in its communities, encouraging alternative forms of land ownership and practices that ensure food security for its members.
• Financial. Unlike commercial banks, which exist for profit, financial cooperatives exist for the benefit of their local communities. The most common types are credit unions and cooperative banks. In the U.S., more than 100 million people are members of credit unions. The Ghana Cooperative Credit Unions Association has been working since 1968 to ensure that Ghanaians have access to capital and investment opportunities. ACCOSCA, a pan-African organization of credit unions, has invigorated the credit union system by providing strong economic and technical support.
• Artisan. Artisan cooperatives are similar to producer cooperatives in that they are specifically tailored toward artisans seeking to market their products, raise awareness of their work, and increase economic benefit. The Artisan Cooperative is an online marketplace for handmade products that is a deliberate alternative to Etsy. The Sadhna artisan cooperative has empowered women in rural India by increasing market opportunities for their crafts, increasing incomes, and building more resilient communities. 
• Housing. A housing cooperative is one jointly owned by its residents. William Penn House in Philadelphia is an example of a housing cooperative that offers housing well below market values, allowing residents who could not afford market prices to own a home while offering significant potential tax breaks.
• Purchasing. Purchasing cooperatives are businesses that aggregate the volume of their purchases to enhance purchasing power. ACE Hardware, in the U.S., allows sovereign owners of each store to join together to reap the benefits of cooperative purchasing and access better insurance rates and financing.

Learn about the core principles, practices, and benefits of cooperatives. The International Cooperative Alliance, the oldest non-governmental organization in the world that formally represents cooperatives, defines a cooperative as an organization that works to realize the common economic, social, and cultural needs and aspirations of its members and not strictly for the profit of owners and shareholders. The ICA has outlined the seven core principles that are shared by cooperatives:

• 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.
• 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. Cooperative members have equal voting rights (one member, one vote).
• 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 can receive limited compensation 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.
• Autonomy and Independence. Cooperatives are autonomous 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.
• Education, Training, and Information. Cooperatives provide education and training for their members. They elect 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 cooperatives.
• Cooperation among Cooperatives. Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional, and international structures.
• Concern for Community. Cooperatives work for the sustainable development of their communities through policies approved by their members. 

Join or start a cooperative (co-op). There are over three million active cooperatives worldwide, with the majority of them being small, local initiatives. An easy way to become part of the movement is to find a cooperative in your area and join. If there are no cooperatives that serve your needs, why not start one? Here are some common areas where cooperatives thrive and offer ways to get involved or opportunities for starting a cooperative:

• Energy. Energy cooperatives can be found worldwide and are especially effective in rural or remote areas where it is difficult for large companies to provide power or generate sufficient profit. With full member control that an energy cooperative provides, it is also easier to commit to renewable energy for your community, helping to potentially reduce costs for members by up to 20 percent. In the United States, energy cooperatives power 53 percent of the nation’s landmass. The Goulburn Community Energy Co-op in Australia is a grassroots project founded on the members' desire to realize renewable energy solutions in their community. Co-op Power offers a comprehensive guide to starting an energy cooperative if there are none in your area.
• Credit union. One of the easiest ways to participate in a cooperative is to join a credit union near your community. With competitive fees and special incentives for members only, joining a credit union offers an immediate impact. Credit unions keep money in the community by offering loans to local small businesses, creating jobs, and encouraging growth that is in line with the genuine needs of the community.
• Housing. Housing cooperatives can provide some of the advantages of homeownership to people who might not be able to afford a home, offer a shared responsibility for maintenance, and give members a say in decision-making. Cooperative housing developments allow a person to know the people in their community and often share an intention for what the co-op's priorities are, such as the Houston Access to Urban Sustainability Project. The Mass Coop in France, based on ecological principles, does not tie its shares to the speculative real estate market to maintain affordable housing for future residents.
• Childcare. Childcare cooperatives can help empower parents to share responsibility for childcare while potentially reducing costs. They can range from officially designated Parental cooperatives to more informal babysitting co-ops.  Parent Cooperative Preschools International offers a guide to starting a Preschool co-op in your community. Childcare co-ops for employees that are set up by businesses, like the ones offered by Kindercare, present a perk for employees while offering decision-making control to the parents who use them.
• Food Market. While everyone is able to shop at a food co-op, members have a share in the decision-making process and often receive considerable discounts on their membership fees. Food co-ops have also, in large part, shared a social mission of giving communities access to healthy, organic food. The Food Co-op Initiative offers detailed assistance on how to start a grocery cooperative. Food co-ops are also an emerging way to bring healthy food into food deserts and encourage local economic activity for low-income people.
• Community Investment. Instead of being subject to outside investment or speculation, community investment funds allow members of a community to pool their money to invest in the growth of their community. Initiatives like the East Side Community Investment Cooperative are helping to keep neighborhoods intact and give members a stake in the health and success of their community. The Co-op Community Trust in Africa promotes education and socio-economic growth through the founding of co-ops and the Afrikan Cooperative Union, which seeks to empower the financial and psychological health of the African diaspora. 

Farmer-owned co-ops help producer-members market and process their crops and livestock and secure needed production supplies and services. Compared to individual farmers, co-op members are more economically protected and face lower risks. In the United States, the National Council of Farmers Cooperatives works to advance the business and policy interests of farmers, aiming to create and maintain coops.

• Start a Farmers Co-op. The Department for Rural Development offers an easy guide to starting a farmers cooperative to help reduce costs, increase quality, and increase income, among other benefits. Forming an agricultural co-op, like the Coopcerrado in Brazil, is an opportunity for families and small farms to create sustainable livelihoods and access to world markets. They also play a key role in transitioning agriculture to a less chemical-intensive, ecologically friendly approach.  
• Connect with organizations that can support the process. The Farm Credit Administration in the United States is a group of cooperative banks focused on lending to farmers and includes institutions like AgCredit. The Cooperative Development Program has funded over 10,000 cooperatives in 35 countries across Latin America, Asia, and Africa. Heifer International works with over 2800 farmer cooperatives worldwide to raise income levels, end hunger, and support farming communities.

The business co-op model states that a business is most ethically and equitably run if it is managed by the people most directly involved in it. Successful cooperatives, like Hotels, which is one of the largest hotel chains in the world, use experienced advisors effectively and maintain excellent communication between members. According to the Democracy at Work Institute, employee-owned businesses see higher productivity levels and lower employee turnover, helping to make the decision to transition an existing business to a cooperative model based on human and community benefit rather than pure profit.

• Turn your business into a worker's cooperative. Hundreds of businesses have been transitioned to become worker cooperatives, such as Namaste Solar, which made its transition during its early quest for funding. Organizations like The Working World are available to consult and help with transitioning your business to a co-op model, and Evergreen Cooperatives has started a fund to help businesses make the transition. Here is a step-by-step guide to converting a for-profit.

The Case for Co-ops, The Invisible Giant of the Economy by Anu Puusa / TED (12 mins.)

United Electric Coop - CoBank by Farm Credit (5 mins.)

Workers to Owners: The Story of A Child's Place by Democracy at Work Institute (4 mins.)

How do Cooperatives Help Smallholder Farmers? by Farm Africa (2 mins.)

What is a Co-operative? by Co-operatives UK (3 mins.)

The Electric Cooperative Story by electriccoops (4 mins.)

Empowering the Energy Transition: Energy Cooperatives and Energy Communities by UNEP Copenhagen Climate Centre (95 mins.)

Is Co-op Housing Making a Comeback? by CBS News (7 mins.)

The Housing Revolution: How Housing Co-ops Can Provide a Better Future by Regan Muir / TEDx Talks (13 mins.)

Jessica Gordon Nembhard: Cooperative Economics and Civil Rights by Laura Flanders & Friends (16 mins.)

Cooperation for the Transition to a Green Economy | Global Thematic Research Report by the ICA and the EU

Cooperation - Political, Economic and Social Theory by Bernard E. Harcourt / Columbia University Press

Weavers of Dreams: Founders of the Modern Co-Operative Movement by David J. Thompson / Center for Cooperatives, University of California

Steps to Starting a Worker Co-op by Gary B. Hansen, E. Kim Cootz, and Audrey Malan / Center for Cooperatives, University of California

Collective Courage: A History of African American Cooperative Economic Thought and Practice by Jessica Gordon Nembhard / Penn State University Press

Worker Cooperatives - Part 1: Widening the Spheres of Democracy by Upstream Podcast (58 mins.)

Worker Cooperatives - Part 2: Islands Within a Sea of Capitalism by Upstream Podcast (58 mins.)

Co-op Conversations Podcast

The Common Share Podcast