Understanding Cooperatives

 REI Outdoor Gear, Ace Hardware, Almond Growers, and most Credit Unions are examples of successful cooperatives. A cooperative is an autonomous association of people and/or businesses united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically controlled enterprise.

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

Since cooperatives are organized for the benefit of their members rather than to earn profits for investors, they tend to take a longer term view with respect to their operations. That is not to say that cooperatives don't look at the bottom line, but rather that they have additional objectives that focus more on the long-term survival of the business and their members.

The Sonoma County Go Local Cooperative is a member-owned enterprise, committed to informing and empowering its members. Anyone who lives in Sonoma County and any business with 51% local ownership can join. Our best chance of dealing with the issues we face is to work together...local businesses, community organizations and citizens. We are stronger together.

Coop Definition

A cooperative is a private business organization that is owned and controlled by the people who use its products, supplies or services. Although cooperatives vary in type and membership size, all were formed to meet the specific objectives of members, and are structured to adapt to members' changing needs.

Cooperatives are formed by individuals and organizations who coordinate among themselves (horizontal coordination) to achieve vertical integration in their business activities. Although people have been working together for their mutual benefit throughout human history, the cooperative form of business organization began during the Industrial Revolution. Cooperatives were useful for promoting the interests of the less powerful members of society. Farmers, producers, workers, and consumers found that they could accomplish more collectively than they could individually.

Cooperative Principles

The US Department of Agriculture lists three principles that uniquely characterize a cooperative organization:

• The User-Owned Principle: The people who own and finance the cooperative are those who use the cooperative.
• The User-Control Principle: The people who control the cooperative are those who use the cooperative. They democratically elect a board of directors. The board sets the overall operating policies, approves the annual budget, oversees its operation, and distributes the benefits derived from use of the cooperative to members. The board also hires professional management to handle the day-to-day operations.
• The User-Benefit Principle: The cooperative's sole purpose is to provide and distribute benefits to its users on the basis of their use.. While the primary goal of cooperatives is not to generate a return on investment, they, like all businesses, must cover costs and generate capital to cover expansion and unforeseen emergencies.

Other Principles

The International Cooperative Alliance is a world-wide association of cooperatives. The Statement of Cooperative Identity which it adopted in 1995 contains seven cooperative principles that are more socially-minded:

• Voluntary and Open Membership
• Democratic Member Control
• Member Economic Participation
• Autonomy and Independence
• Education, Training and Information
• Cooperation Among Cooperatives
• Concern for Community