12: Cooperative Development
Build stronger local business and communities. Other Information:
See http://www.ncba.coop/ncba/what-we-do/ncba-coop-support & http://co-opsusa.coop/ A cooperative, or co-op, buys and sells
products or services like any other business. The difference is a co-op is owned and governed by its members, the people who
use it. And, profits are reinvested in the co-op or distributed to its members. Today, there are nearly 30,000 cooperatives
in the United States, with more than 100 million members. In nearly every part of the economy, people have joined together
to do business more effectively or to get the products and services they need—from food to construction equipment to childcare—through
cooperatives.
Stakeholder(s):
- Individuals: A cooperative is a business enterprise that is owned and controlled by its members. Members are the individual customers of
the cooperative business. Because of its direct linkage to its members through their ownership and control, the operations
of the cooperative are directly oriented to the needs and wishes of its members. People with like needs often form purchasing
or shared services cooperatives to reduce costs or provide services they need. These cooperatives may be larger, formally
incorporated business entities or smaller and less formal buying groups. Individuals may become members of cooperatives, often
at little or no cost, though sometimes at the cost of their own volunteered labor. Credit Unions are the most common types
of consumer cooperatives. Nearly one third of all Americans are credit union members and receive a range of financial services,
from savings and loans, to retirement planning, to tax and financial counseling. Food cooperatives are a rapidly growing sector
within the cooperative community. In many cases food cooperatives provide members with natural and organic foods not generally
available from other sources. In other cases, food cooperatives are formed in urban food deserts or small rural communities
where local access to healthy foods does not exist. Cooperatives are increasingly providing an array of social services for
individuals, including housing, health care, child care and elder care. In housing cooperatives, individuals join the cooperative
to obtain housing services by purchasing perpetuate rights to a unit within a building owned by the cooperative. In child
and elder care cooperatives, schooling, daycare, and care for aging parents is provided, often in a manner that involves the
parent (or children of aging parents) in the operation of the cooperative. Health-related cooperatives may provide insurance
or a wide range of health services from insurance, to primary and secondary care, to counseling and wellness programs. Rural
utilities cooperatives, such as electric, telephone, and water have long provided services to rural areas that lagged far
behind the more urban areas in access to these basic services. Rural utilities cooperatives have become major economic drivers
in many parts of the rural United States.
- Businesses: A cooperative can be a business enterprise that is owned and controlled by its members… individual independent businesses
who are the customers of the cooperative. Because of its direct link to its members through their ownership and control, the
operations of the cooperative are directly oriented to the business needs of the cooperative’s business owners. If your business
is a member of a cooperative, you are still an independent business on your own. But your bottom line can benefit from being
a part of a cooperative in several ways, including : * negotiating lower prices * reducing costs for services or business
functions * improving access to professional services * reducing supplier costs/risks * centralized billing, collections,
rebate management * joint inventory to reduce financing costs * quality attributes management Any type of business may find
benefit from working with other businesses in a cooperative structure. Farmers are the best known types of businesses that
have adopted cooperatives, but many other types of businesses are also finding the cooperative approach as key to their survival…small
pharmacies, carpet stores, fast food franchises, sports teams, and many others. Cooperatives provide three basic business
functions for their member businesses: * Purchasing - Mass buying, terms negotiations, rebate management * Shared administrative
and business services – Benefits management, insurance, accounting, central billing and collections * Joint Marketing – Co-branding,
advertising and promotion, consumer education
- Communities: A cooperative is a business enterprise that is owned and controlled by its members. Members are the individual customers or
users of the cooperative business. Members in a cooperative are usually thought of as individual persons, but could also be
individual communities or public institutions such as school districts. Communities, whether rural or urban, are constantly
challenged to meet the social and economic needs of their resident, while keeping costs of doing so to a minimum. Cooperative
approaches enable communities to work together to provide services at a scale that reduces costs. These cooperatives may be
larger, formally incorporated business entities or smaller and less formal buying groups. Governance of a cooperative of communities
follows democratic principles with each community having one vote. The cooperative’s Board is composed either of one representative
from each member community or has its members elected on a one-community-one-vote basis. The range of ways in which communities
can work together is wide: Purchasing: * Food service supplies for local school districts * Energy rates and procurement for
communities Shared Services: * Solid waste and recycling services for small communities * Benefits management services for
small communities * Aftercare programs for schools
- Charitable and Religious Organizations: A cooperative can be a business enterprise that is owned and controlled by its members… members who may be charitable or religious
organizations with shared visions. Charitable and religious organizations may adopt cooperative strategies as members of a
cooperatively-owned enterprise. In this role, cooperative membership provides a way to reduce costs or share services. Resources
are then better able to support the purpose and missions of the organizations. Types of cooperative or group purchasing that
could benefit charitable and religious organizations include: * Energy rate negotiation and purchasing * Supplies and materials
purchasing * Food services management * Benefits provision and management * Audit and accounting services
- Developers: Cooperatives are a proven strategy for achieving positive economic and social development outcomes in wide range of settings.
The unique ownership and control aspects of the cooperative model both build upon and contribute to strengths of local communities,
neighborhoods, or regions. Cooperatives provide a development strategy that is defined by the expressed needs of people in
communities and built with their efforts. In addition to direct provision of services and financial benefits, successful cooperative
strategies contribute a range of other elements of community wealth: * Local retention of profits and wealth * Local economic
multiplier * Leadership development * Decision making skills * Business and financial literacy * Accountability and responsibility
* Sense of a stake in the future Nothing says community development like cooperatives.... Many emerging cooperatives groups
need a range of assistance in aspects of the cooperative development process. A range of development skills and areas of expertise
can contribute to the cooperative development processes: * Legal * Financial and accounting * Community organizing * Group
facilitation * Business planning * Education and teaching
Objective(s):
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