Co-operatives

Defining Co-operatives

A co-operative is an autonomous group of people united voluntarily to meet the common needs and aspirations of its members, sharing ownership and making decisions democratically. Co-operatives vary widely in form according to the service they provide.

Co-operatives are owned by their members, who are also the users of the service provided by the co-operative. They are managed on a democratic basis in their members’ interests under the principle of one member one vote. Co-operatives are based on the principle that human beings have the capacity to improve their social and economic situations through mutual self-help.

It is this combination of social and economic goals that differentiates co-operatives from shareholder owned businesses (where control depends upon size of financial investment) and charitable organisations (which tend to be funded by donors and perform work in the interests of another group).

From the Rochdale Pioneers to the 21st Century

The first organised co-operatives with a distinct legal identity were formed in Europe during the nineteenth century. In Great Britain in 1844, the Rochdale Pioneers opened one of the first and most successful consumer co-operatives with the aim of providing “pure food” at “honest rates”. Despite the humble beginnings of the small shop on Toad Lane , the model proved to be highly successful and quickly spread across the UK and Europe. By the end of the nineteenth century, co-operatives of many forms were thriving throughout Europe and elsewhere. These included worker co-operatives and agricultural cooperatives, as well as service co-operatives such health, housing and insurance co-operatives.

Challenged with the task of bringing these movements together, the International Co-operative Alliance (ICA) was formed in 1895. The ICA is a non-governmental organisation that unites, serves and represents co-operatives around the world. It does this by encouraging the formation of supportive government policies and sharing information about best practice within the movement.

The Values and Principles embraced by today’s worldwide co-operative movement have evolved from the ideals of the early co-operators of the 18th and 19th centuries. They are embodied in the Statement of Co-operative Identity published by the ICA.

Values

Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others.

Principles

The co-operative principles are guidelines by which co-operatives put their values into practice.

1st Principle: Voluntary and Open Membership

Co-operatives are voluntary organisations, 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.

2nd Principle: Democratic Member Control

Co-operatives are democratic organisations 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 co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organised in a democratic manner.

3rd Principle: Member Economic Participation

Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. 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 co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.

4th Principle: Autonomy and Independence

Co-operatives are autonomous, self-help organisations controlled by their members. If they enter to agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.

5th Principle: Education, Training and Information

Co-operatives 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.

6th Principle: Co-operation among Co-operatives

Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.

7th Principle: Concern for Community

Co-operatives work for the sustainable development of their communities through policies approved by their members.