Co-op 101
Cooperatives are enterprises based on ethics, values, and principles.

Through self-help and empowerment, reinvesting in their communities and concern for the well-being of people and the world in which we live, cooperatives nurture a long-term vision for sustainable economic growth, social development and environmental responsibility.

Did you know that more than 12% of humanity is part of any of the 3 million cooperatives in the world!

The largest 300 cooperatives and mutuals report a total turnover of 2,146 billion USD, according to the World Cooperative Monitor (2020).
Cooperatives contribute to the sustainable economic growth and stable, quality employment, employing 280 million people across the globe, in other words, 10% of the world’s employed population.

As member-owned, member-run and member-serving businesses, cooperatives empower people to collectively realize their economic aspirations, while strengthening their social and human capital and developing their communities.

Here in Arizona, cooperatives supply milk and dairy products, banking services through credit unions, groceries at food cooperatives, building supplies at your local Ace hardware, outdoor supplies at REI, electricity and energy services to rural Arizona from rural electric cooperatives, and fresh produce through ag cooperatives. And these are just some of the examples.

One Definition

A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through jointly-owned and democratically-controlled enterprise.
These are unprecedented times where we are all being asked to contribute in any way possible to help neighbors survive COVID 19. It’s important to remember that we will get through this. For those of us at the Arizona Cooperative Initiative, we believe that cooperation is the only way we can all survive. Cooperatives, because they follow the 7 cooperative principles, see the survival of the individual only possible with the survival of the community.

With this in mind, we frequently update our Twitter feed with pertinent information and services to non-profits, small businesses and cooperatives free of charge. We want to help small enterprise manage their way through the SBA loan and grant process. Please email us so can help you as quickly as possible. Please feel free to share this with anyone who needs assistance.

We will get through this. We will get through this better together. No one has ever cooperated alone.

7 Cooperative Principles

The International Cooperative Alliance has also outlined seven guidelines by which cooperatives put their values into practice.

  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.

What Distinguishes Cooperatives?

While the International Cooperative Alliance defines seven cooperative principles, Robert Briscoe and Rachel Ward point out in their book Helping Ourselves: Success Stories in Cooperative Business & Social Enterprise three principles that make cooperatives different from other types of business:

  1. User-owned: cooperatives are owned and financed by the people who use them.
  2. User-controlled: cooperatives are controlled by the people who use them.
  3. User-benefits: benefits of cooperatives are shared among its users according to their use.
A cooperative is a self-help business, owned and democratically controlled by the people who use its services and share in its benefits.

Types of Cooperatives

There are several different types of cooperatives. Three of the main types are:

  1. Producer cooperatives are owned and democratically controlled by independent producers, commonly farmers, but could also be fishermen, artists, taxi-drivers, or even doctors.
  2. Consumer cooperatives are owned and democratically controlled by its customers, or those who use the products, including for example, grocery store customers, housing residents, or electricity users. 
  3. Worker cooperatives are owned and democratically controlled by its workers, such as bakery, a window manufacturer, or a home care agency.
To be successful, cooperatives must have a higher purpose than making money … The center of any cooperative’s concern is human beings, not dollars, and the business is really an means to human ends
- Max Kummerow, as cited by Briscoe and Ward above