October 2009
What? A Co-op Compass? You Bet!
by Keven Groenewold
Co-ops are pretty simple, really. You take a bunch of people with a common economic interest, form a business, elect a few as leaders (Trustees), hire someone to run the business, and you are done—almost. All co-ops, large or small, begin and end with their members. If it’s small enough—your local water association, for example—you might know everyone and their family. If it’s larger, you’ll probably only know the members you meet in your work, in your community, or at the annual meeting. However, you will all have at least one thing in common: the co-op. October is National Cooperative Month. To celebrate we’re taking a look at the important role co-ops play in our community.
Cooperatives are owned by their members—the people who receive services from them—and are found in many industries. For example, more than 900 electric co-ops serve 42 million Americans. According to the National Cooperative Grocers Association, 30 percent of farmers’ products are marketed through more than 3,000 farmer-owned cooperatives in America. Familiar brands like SunKist, Land O’Lakes, Cabot Creamery, Ocean Spray, and Sun-Maid are co-ops formed to help farmers distribute products.
In banking, 10,000 credit unions provide services to 84 million members across the nation. Co-ops have also been formed to provide child care, insurance, and housing. Nearly 30,000 cooperatives operate at 73,000 locations nationally.
The cooperative movement traces its roots to a store started by weavers in the town of Rochdale, England in 1844. The Rochdale model revolved around a set of guidelines drawn up by one of its members, Charles Howarth. When introduced into the United States by the National Grange in 1874, these “Rochdale Principles” fueled a cooperative explosion.
Although stated in many ways, the Rochdale Principles hold that a cooperative must provide:
1. Voluntary And Open Membership: Membership in a cooperative is available to all who can reasonably use its services, regardless of race, religion, sex, or economic circumstances.
2. Democratic Member Control: Co-ops are democratically controlled, with each member having one vote. As a result, control remains in the hands of all customers. Directors are elected from the membership.
3. Members’ Economic Participation: Cooperatives provide services “at cost” and remain not-for-profit, regardless of the value of benefits delivered. Money left over after all expenses are paid—margins—belongs to the members. Each member’s share in the margin is determined by the amount of use of the co-op’s services.
4. Autonomy and Independence: Cooperatives are self-sustaining, self-help organizations controlled by their members. When cooperatives enter into agreements with others or raise money from outside sources, they do so on terms that maintain democratic control, as well as their unique identity.
5. Education, Training, and Information: Keeping members, directors, managers, and employees updated on issues so they can effectively govern. Communication, particularly with young members and opinion leaders, helps generate necessary public support.
6. Cooperation among Cooperatives: Mutual support helps cooperatives improve services, bolster local economies, and deal more effectively with community needs.
7. Concern for Community: Cooperatives develop communities with programs supported by the membership.
These principles define co-ops and act as a compass to guide us through any challenge. On our co-op compass the needle should always point towards “member best interest.”
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