Cooperatives: Membership and Employment Benefits

The International Cooperative Alliance is a non-governmental cooperative organization founded in 1895 to unite, represent and serve cooperatives worldwide. The ICA is the custodian of the internationally recognised definition, values and principles of a cooperative in the ICA Statement on the Cooperative Identity.

What is a Cooperative?

Cooperatives are a type of organization that is owned and democratically controlled by its members. They are based on the principles of self-help, self-responsibility, and solidarity. Cooperatives can be found in all sectors of the economy, including agriculture, finance, housing, healthcare, manufacturing and publishing.

Cooperatives are a valuable type of organization that can provide economic, social, and environmental benefits to their members and to society as a whole.

Here are some of the key features of cooperatives:

• Ownership: Cooperatives are owned and controlled by their members. This means that members have a say in how the cooperative is run.
• Control: In a cooperative, control is vested in the members, who have an equal say in decision-making as invested stakeholders.
• Profit: Cooperatives are motivated by the needs and interests of their members. This means that cooperatives may be more likely to reinvest their profits in the business or to provide benefits to their members, such as lower prices on goods and services.

Cooperatives are often seen as a more democratic and equitable form of business than corporations, by nature they are also normally non-profit. But most important is they can also be more resilient in the face of economic challenges, as they are owned and controlled by their members.

Despite their differences, cooperatives and corporations do share some common denominators. These include:

• They are both legal entities that can engage in business activities.
• They both need to have a board of directors that oversees the management of the business.
• They both need to keep financial records and file tax returns.
• They both need to comply with all applicable laws and regulations.

Types of Cooperatives

• Consumer cooperatives: Consumer cooperatives provide goods and services to their members at a competitive price. Some examples of consumer cooperatives include grocery stores, pharmacies, and hardware stores.
• Worker cooperatives: Worker cooperatives are owned and operated by their workers. This means that the workers have a say in how the cooperative is run and share in the profits. Some examples of worker cooperatives include restaurants, construction companies, and childcare centers.
• Producer cooperatives: Producer cooperatives are owned and operated by the people who produce the products or services that the cooperative sells. Some examples of producer cooperatives include agricultural cooperatives, dairy cooperatives, and fishing cooperatives.
• Financial cooperatives: Financial cooperatives provide financial services to their members, such as savings accounts, loans, and insurance. Some examples of financial cooperatives include credit unions and mutual banks.
• Housing cooperatives: Housing cooperatives provide affordable housing to their members. Members typically own a share of the cooperative, which gives them the right to live in one of the cooperative's units.

• Multipurpose cooperatives: Multipurpose cooperatives provide a variety of different services to their members. For example, a multipurpose cooperative might provide grocery shopping, financial services, and housing.
• Multilevel cooperatives: Multilevel cooperatives are organized at different levels, such as local, regional, and national. This allows them to pool their resources and to provide a wider range of services to their members.
• Fair trade cooperatives: Fair trade cooperatives are cooperatives that are committed to fair trade principles. This means that they pay their producers fair prices and provide them with good working conditions.
• Social cooperatives: Social cooperatives are cooperatives that are focused on social and environmental goals, such as providing jobs for people with disabilities or reducing poverty.

1. Democratic control: Cooperatives are owned and controlled by their members, which means that members have a say in how the cooperative is run.
2. Economic benefits: Cooperatives can provide economic benefits to their members, such as lower prices on goods and services, higher returns on investments, and job opportunities.
3. Social benefits: Cooperatives can also provide social benefits to their members, such as a sense of community and support, and the opportunity to participate in decision-making.
4. Sustainability: Cooperatives are based on the principles of self-help, self-responsibility, and solidarity. This makes them a more sustainable type of business, as they are less likely to be affected by economic downturns and other external shocks.

Here are some specific examples of why people might like cooperatives:

• A farmer might join an agricultural cooperative to get better prices for their products and to purchase supplies at a lower cost.
• A consumer might join a consumer cooperative to get discounts on groceries and other goods and services.
• A worker might join a worker cooperative to have a say in how their workplace is run and to share in the profits of the business.
• A person who is concerned about the environment might join a housing cooperative to live in a more sustainable way.
• A person who is interested in social justice might join a cooperative that is working to address social problems in their community.

Cooperatives are a diverse type of organization that can appeal to people for a variety of reasons. They offer a way to do business that is more democratic, equitable, and sustainable.

Shared Responsibility and Equal Investment

Shared responsibility and equal investment are two of the core principles of cooperatives. 

• Shared responsibility means that all members of a cooperative are responsible for the success or failure of the cooperative. This means that members are involved in the decision-making process and that they share in the profits or losses of the cooperative.
• Equal investment means that all members of a cooperative are expected to invest an equal amount of money in the cooperative. This helps to ensure that all members have an equal say in how the cooperative is run.

In some cases, cooperatives may have different membership categories. For example, a consumer cooperative may have different membership categories for individuals, families, and businesses. However, even in these cases, all members are expected to share in the responsibility and benefits of the cooperative.

Corporations, on the other hand, do not typically have shared responsibility or equal investment. Shareholders typically have limited liability, which means that they are only responsible for the amount of money that they have invested in the corporation. Additionally, shareholders typically have different levels of ownership and control, depending on how many shares they own. Cooperatives on the other hand provide dividends based on the amount of fruit that is harvested not its final price. Corporations often become clients of cooperatives, but cooperatives normally are not clients of corporations.

The principles of shared responsibility and equal investment are what make cooperatives different from corporations and other types of businesses. Cooperatives are more democratic and equitable, and they are more focused on the needs of their members than on generating profits for shareholders.