Principles That Matter
The difference between cooperatives
and other businesses is who owns
them, who makes the decisions, and
who benefits from the savings and
profits. Some businesses are owned
by one person or family. Decisions on
where to locate, what to sell, and how
to operate are made for the benefit of
the owners. Other businesses are owned
by stockholders. A stock represents a
cash value of ownership. The more stock
a person owns, the more that person
can control the company. Companies
like this are operated to return profits
to the stockholders. A privately-owned
business may close a store, change
prices, or decide to drop a service
because it is good for the stockholders.
A cooperative is different because it is
owned by the customers, who also buy
a share (or stock) in the company. Each
member owns an equal amount, so no
one can own more than anyone else.
Remember the grain elevator on the
previous page? It is owned and operated
by the farmers. They use the business
and they manage the business, so they
will decide if changing prices, closing
a store, or ending a service is good for
them. Cooperatives are companies that
benefit their members (the customers)
who created the business. Cooperatives
use Seven Cooperative Principles
to set up and run their businesses.
Seven Cooperative Principles
1. Voluntary,
Open Ownership
Open to all without
gender, social, racial,
political, or religious discrimination.
Cooperatives benefit everyone
who needs the supply, marketing,
or services the business operation
provides. No one is left out.
2. Democratic
Owner Control
Each member in a
co-op has a right to
vote and a right to voice their ideas
and concerns. No one can control the
co-op by buying more shares. Each
member is equal and gets one vote.
3. Owner
Economic
Participation
Co-ops may help
owners save money, earn more money,
or obtain a service they might not
otherwise have access to. The members
enjoy the direct economic benefits.
4. Autonomy and
Independence
Cooperatives are owned
and operated by the
members for the benefit of the
members. Co-ops do not exist to
benefit other companies or individuals.
5. Education,
Training, and
Information
Each co-op dedicates
time and resources to making sure the
members can learn about the co-op
and its services. Some cooperative
grocery stores offer cooking classes.
Some cooperatives offer summer
camps for youth. It is one way co-
ops give back to their members and
to their hometown communities.
6. Cooperation Among
Cooperatives
Whenever and
wherever possible,
cooperatives work together
and buy from each other.
7. Concern
for the
Community
Unlike other
companies, member-owned
cooperatives make taking care
of their communities a written
priority. Cooperative members
and employees dedicate time and
money to projects that make their
hometowns a better place to live.
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