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Cooperatives 101 (What Is A Cooperative?)

By: Westman Communications
Posted: October 13, 2020 13:49

This year’s theme for Co-op Week is The Co-op Effect: Count Me In!

From grocery stores to service providers, cooperatives come in many different sizes and are integral part of our economy. Yet aside from a few details, how many people truly know what a cooperative is and how it works? Let’s dive deeper into the specifics of a cooperative. 

 

What is a cooperative? 

A co-op is an organization that is owned and democratically controlled by its Members, for its Members.  

The Members of a co-op determine how the business will run, elect the Board of Directors, and ensure the organization is following the cooperative principles - that all cooperatives share internationally.  

Cooperatives can provide nearly any product or service and can be either non-profit, or for-profit organizations. 

  

Why were cooperatives created? 

Cooperatives were created to bring people together and build a better, more sustainable world through cooperation. In the tradition of their founders, cooperative Members believe in the ethical values of honesty, openness, social responsibility and caring for others. 

 

Five types of Cooperatives 

A growing number of people in Canada and around the world are recognizing the benefits of taking part in a cooperative. Though there are many unique cooperatives, here are the main five types you can take part in: 

  1. Consumer cooperatives: They provide their Members with goods and services for their personal use. This contains both retail cooperatives and service cooperatives.  Examples: Food, Credit Unions, housing, insurance cooperatives, etc. 

     

  2. Worker cooperatives: Members are both the employees of the business as well as owners of the cooperative.  Examples: forestry, bakeries, retail stores, tourism, etc. 

     

  3. Producer cooperatives: Some cooperatives process and market their Members' products and services directly. Other producer cooperatives may lessen costs and strain on input necessary to their Members' economic activities, with a mutual benefit for the producer. Examples: Agriculture cooperatives, advisory services, etc. 

  4. Multi-stakeholder cooperatives: The Membership of these cooperatives is made of different categories of Members who share a common interest in the organization.  Examples: home care services, health services, community services, etc. 

  5. Housing cooperatives: These types of cooperatives allow for the opportunity to share costs of home ownership or a building ownership. Examples: condominiums, rentals, etc. 

Cooperatives Values and Principles 

A critical difference between a traditional business’s structure and a cooperatives' structure is what they prioritize. For a cooperative, they wish to first meet its Membership's needs in a productive, self-sufficient and socially responsible manner. 

All cooperatives around the world are guided by the same seven principles:  

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 cooperatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of cooperation. 

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. 

These values were created by the International Cooperative Alliance (ICA) to help cooperators run their businesses more efficiently and effectively. The Statement on the Corporate Identity values was internationally agreed upon. 

 

Five Fun Facts About Cooperatives: 

  1. Cooperatives employ about 10% of the world's population. 
  2. There are about 9,000 Cooperatives and Credit Unions in Canada, with over 500 Cooperatives located in Manitoba. 
  3. In Cooperative Difference’s Economic Impact study, cooperatives created jobs at nearly five times the overall economy rate. 
  4. Cooperatives give millions of dollars back to their communities in the form of sponsorships and donations each year. 
  5. Cooperatives exist in virtually every sector of the economy, from agriculture, retail and financial services to housing, childcare, funeral services and renewable energy. 

 

Five Fun Facts about Westman as a cooperative: 

  1. Westman Communications Group was established as a co-op in 1977. 
  2. Westman Communications Group supports over 80+ initiatives throughout the Westman communities annually. 
  3. Every year, Westman offers an exclusive giveaway and other special offers for Members that have been with us for 5+ years. 
  4. Westman offers up to $16,000 annually in scholarships to over 30 high schools in the communities that Westman serves. 
  5. Environmental Responsibility initiatives are in Westman’s corporate vision to ensure that our company can reduce our impact on the environment. Things such as energy efficient heating and cooling in our building, adding eco-diesel trucks to our fleet, and more have been implemented to ensure we do our part. To learn more, see Westman's local impact.  

 

Happy Co-op Week 2020 from your friends, 

 

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