What is a Co-op?
Who owns a business determines the type of entity it is. For example, when an individual owns and operates a company, it’s often a sole proprietorship; When two or more people own a company, it’s a partnership; A company can incorporate, forming a various types of corporations based on the number of employees.
When the people who use the products and services a company has to offer own and operate the company, it’s known as a cooperative. Thus, a cooperative is a business that is owned and governed by its members.
Ownership & Governance
what are member-owners?
In the case of other types of corporations, the size of a shareholder's stake affects how much of a say or how much control an owner has over the company, i.e. a shareholder with 50% ownership of a company will have more voting power and control over decision-making than a shareholder with 5% ownership. In a cooperative, equality and equity are foundational values. Each member-owner of a co-op gets one vote. The opinion of one co-op member does not have more weight than the opinion of another co-op member.
Cooperatives often elect a board of directors (you can view ours here). The responsibilities of the co-op board include ensuring that the cooperative is working towards achieving its mission, setting up operational policies for the co-op and hiring any outside managers or other employees.
Members of a co-op’s board are members of the cooperative itself. Board officers have additional responsibilities and duties, which members can find in the cooperative’s by-laws.
An enterprise built around sustainable community development.
Cooperatives matter today because they help to rebalance power and dilute the concentration of wealth. The cooperative model creates shared prosperity, allowing more people to participate in the economy. Instead of a few people owning the bulk of every business, ownership resides with the people. Cooperatives empower people to collectively realize their economic aspirations, while strengthening their social and human capital and developing their communities.
The primary purpose of a cooperative is to serve the community in which it operates; When a co-op does well, it benefits the community as a whole.
A successful cooperative business can provide employment, investment opportunities, collaborative growth and even distribution of wealth, among other things. The members will want the co-op to help the community because they are a part of it — and the community will always want to support the co-op because it invests in the betterment of the community. This is part of a larger conversation surrounding business sustainability and keeping wealth distribution within the community that a business serves.
Types of Cooperatives
The model can be applied to nearly every kind industry.
Worker co-ops | Worker cooperatives are businesses that are owned by their workers. Ownership allows the worker-members to control the operations and strategic direction of the business and to directly benefit from the business’s success. Profit distribution to worker owners is based on some combination of job position, hours worked, seniority, and salary.
Farmer and Independent Small Business co-ops | These are corporations in which the people who use their services have control over the company, and the business serves members’ purchasing, processing and marketing needs. Agricultural co-ops have been around for centuries to help farmers pool resources and secure land.
Purchasing co-ops |Purchasing co-ops are several small businesses that have joined together to improve their purchase power and to get better discounts and offers on products and services. Purchasing cooperatives combine member demand to achieve better pricing, availability, and delivery of products or services. The members of purchasing cooperatives are businesses or organizations, rather than individual consumers, that use the cooperative to more efficiently manage their operations. Purchasing co-ops are used by hospitals, independent retail stores, farm supply cooperatives and educational institutions for cost-effective wholesale purchases.
Processing co-ops | Processing co-ops add value to the commodities a business produces through the collective ownership of the processing equipment.
Producer co-ops | Producer cooperatives are owned by people who produce similar types of goods or services. The members use the cooperative to more effectively negotiate prices and to access larger markets.
Consumer co-ops | Customers who purchase goods and services from the cooperative own a consumer co-op. Grocery co-ops are a well-known example of consumer cooperatives. Consumer cooperatives are owned by members who use the co-op to purchase the goods or services that they need. By combining member demand, the co-op can provide better availability, selection, pricing, or delivery of products or services to individual consumers.
Multi-stakeholder co-ops | Also referred to as hybrid or solidarity model cooperatives, multi-stakeholder cooperatives are owned by two or more types of members who have different roles and interests in an enterprise that more broadly benefits them all. Member classes may include consumers (either individuals or businesses), producers, workers, or investors. CCC is considered a multi-stakeholder cooperative.
This Cooperative subscribes to the Mondragon Cooperative
Principles as adapted by CO-OP DAYTON
Cooperatives set aside sufficient time and resources to train and develop workers.
Sovereignty of Labor
Cooperatives are committed to creating jobs, compensating workers well, and offering opportunities for ownership. The cooperatives also implement a labor union neutrality policy to not expend resources to dissuade workers from joining a union if they are interested in doing so.
Instrumental & Subordinate Nature of Capital
External investors are fairly compensated but not in a way that is detrimental to the cooperative business; and they have minimal or no governance rights.
Cooperatives minimize the disparity in wages between workers, recognizing the value and dignity of all work.
Each member-owner has one vote on strategic decisions, like Board representation, merger, acquisition, relocation, or closure.
Cooperatives practice open book management by sharing key financial information with workers and educating them on how they contribute to the business’s financial sustainability.
There is no discrimination. Cooperatives strive for radical inclusion and incorporate racial equity into policies and practices.
Cooperatives collaborate with each other to foster a resilient solidarity economy in Dayton and across the world.
Cooperative members recognize that we are all connected, and we act in solidarity with each other for social and economic justice.
We are part of a broader movement for social and economic justice that seeks to create a more free, fair, and caring world..