A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically-controlled enterprise.
Thus, it’s a business. It’s about working together as a team. It’s about democratic decision-making. It’s about ethical, open, and honest enterprise.
From the outside, cooperatives look just like other businesses. They offer products and services just like other forms of business enterprise do. It’s what goes on within cooperative businesses that makes cooperatives different.
Members of a cooperative do not only derive benefit from the work produced. Cooperative members are also its owners, and so get to actively participate in the decision-making process of the cooperative. The emphasis is on the person, rather than on the financial muscle of the member. So much so that cooperatives operate on the principle of ‘one-person-one vote’ in the strategic business decisions the cooperative makes.
Cooperatives are bound by a set of seven, internationally accepted principles, as set by the International Co-operative Alliance in 1995. These principles arise out of the core values of cooperatives.
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.
Cooperatives around the world generally operate according to the same core principles and values, adopted by the International Co-operative Alliance in 1995.
Cooperatives trace the roots of these principles to the first modern cooperative founded in Rochdale, England in 1844.
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 -those who buy the goods or use the services of the cooperative-, who actively participate in setting their policies and making decisions. Men and women serving as 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 also organized in a democratic manner.
3. Member 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 their 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 based on terms that ensure democratic control by their members and maintain their cooperative's 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 also inform the general public - particularly young people and opinion leaders - about the nature and benefits of co-operation.
6. Co-operation 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 approved by their members.