Cooperatives are a tradition nearly as old as America itself. Co-ops range from small firms to large companies, and they allow people to work together to meet challenges that are too big for them to overcome as individuals.
While co-ops are like any other business in many respects, they are unique in several important ways:
- Co-ops are owned and democratically controlled by their members. They exist to benefit the people who use the co-op’s services, rather than to generate profits for outside investors. Co-op members elect their board of directors from within the membership.
- Co-ops return surplus revenues to members, based on how much business they conduct with the co-op. While co-ops strive to return earnings to members, this can’t be done efficiently on a transaction-by-transaction basis. After the fiscal year is over, a co-op distributes a portion of its earnings to members, based on how much business each patron did with the cooperative during the year.
- While co-ops are businesses that must remain profitable, their primary mission is to serve their members with the services and/or products the members need. Members unite in a co-op to access products and services at competitive prices, gain access to markets, enhance their bargaining power, and more.