Seven Cooperative Principles
What are co-ops?
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 all co-ops formed to help farmers distribute products.
In banking, 10,000 credit unions provide financial 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 U.S. 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:
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.
Democratic Member Control
Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. The 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 organized in a democratic manner.
Members’ 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 the 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.
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.
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 cooperatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of cooperation.
Cooperation Among Cooperatives
Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.
Concern for Community
While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.