A cooperative is a business that is started by and owned by its members- which are also the customers. Cooperatives are typically formed out of a need in a community for goods or services, so residents pool their resources to start a company to provide those goods and services. While it is set up to make money, it does not keep profits beyond expenses and a prudent reserve. Excess profits are given back to the members as “Capital Credits.” There is no single owner who has complete authority over the company, but rather a board of directors is voted upon by the members to steer the direction of the cooperative. Cooperatives have been around for hundreds of years, since Benjamin Franklin formed the first mutual insurance company in Philadelphia.
Today’s cooperatives trace their origins to England’s Industrial Revolution, when cooperative initiatives were common and offered their working class members the promise of economic opportunity and democratic control. But until the founding of the Rochdale Equitable Pioneers Society in 1844, none were successful. When the self-described “Rochdale Pioneers” opened their first cooperative food shop, they sold only five products – butter, flour, oatmeal, sugar, and candles – but promised to provide members with “purest provisions, giving full weight and measure.” They went on to establish many other member-owned businesses.
The founders of the Rochdale society developed a series of seven operating principles which ensured their success and the success of hundreds of cooperatives in England and beyond which soon imitated them. Today, these seven basic principles still guide cooperatives around the world.
7 Cooperative 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 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.
3. 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.
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
While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.
TCC is a cooperative and all of our customers are members. Membership entitles you to be actively involved in your cooperative and its business, a part of an organization that is very supportive of the local communities they serve, and a recipient of Capital Credits determined by the Board of Directors. There is no charge for cooperative membership.
Videos on Cooperatives
Watch a video on what it means for TCC to be a cooperative:
And here’s a video from the Cooperative Network called “Cooperatives Are Everywhere”: