A cooperative is an organization that is owned and controlled by the people who use its products, supplies and/or services. Cooperatives can vary in their particular purpose but share in common the fact that they are formed to meet the specific objectives of members and adapt to member’s changing needs. Self reliance and self-help are the hallmark of cooperatives.
The cooperative as a form of business organization began during the Industrial Revolution. Cooperatives promoted the interests of the less powerful members of society. Workers, consumers, farmers, artisans and others found that they could accomplish more by combining their resources and working together.
Cooperatives can be used to address a multitude of shared needs:
- Producers like farmers, artisans or industrialists utilize the cooperative to market or process their goods jointly.
- Workers in areas as diverse as bicycle sales, baked goods production and catalog sales use cooperatives to create employment that offers many of the benefits of ownership.
- Consumers use cooperatives to gain better prices, gain organic, specialty, or locally sourced food or other goods; acquire financial or insurance services that are focused on member needs rather than profit; bring utility access to remote areas; or meet the social or cultural needs.
- Private business or public entities gain purchasing power through bulk buying, obtaining products or services that are difficult to obtain individually, or sharing administrative cost of certain projects.
- Parents can gain quality childcare, preschool education, charter or private education by working together.
- Home ownership that is affordable or is developed to meet the needs of seniors, students or people with disabilities is created using the cooperative model.
The International Cooperative Alliance (ICA), composed of cooperative leaders from around the world, have established seven fundamental principles that guide cooperatives:
- Voluntary and open membership. Cooperatives are voluntary organizations and membership is non-discriminatory by gender, social, racial, political or religious beliefs.
- Democratic member control. Cooperatives are controlled by members who actively participate in setting policies and making decisions.
- Economic participation. Members contribute equitably to the capital of their cooperative.
- Autonomy and independence. Cooperatives are autonomous, self-help organizations controlled by their members.
- Education, training and information. To foster the development of a cooperative, education and training for members, elected representatives, managers, and employees is provided.
- Cooperation among cooperatives. To serve their members most effectively and strengthen the cooperative movement, cooperatives work together.
- Concern for community. While focusing on members' needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.