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What is a Co-op?
A cooperative is a business that is owned and controlled by its members. The
cooperative is operated to benefit its members, not to maximize profits for
People who use the cooperative own their cooperative
because they finance it in a variety of ways. They share in both the
business risks and the business profits. Each cooperative determines what
level of financial participation is required to establish membership status
in the co-op.
Members democratically control their cooperative by
exercising the voting rights that come with membership. In Wisconsin, each
member is entitled to one vote.
Members benefit for the cooperative because they have
access to the products and services that they need. Net earnings are
distributed on the basis of proportional use, or patronage, rather than on
Cooperative Network has
developed an animated short "Co-ops Are Everywhere"
Cooperatives also differ from other business structures because they often
operate on principles that encompass broader social or
community, as well as business, concerns. These
seven cooperative principles
have been developed and modified over time, and are generally accepted by
1. Voluntary and Open Membership - Cooperatives are voluntary
organizations, open to all people able to use its services and willing to accept
the responsibilities of membership, without gender, social, racial, political or
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 policies and
3. Member Economic Participation - Members contribute equally
to, and democratically control, the capital of the cooperative. This benefits
members in proportion to the business they conduct with the cooperative rather
than on the capital invested.
4. Autonomy and Independence - Cooperatives are autonomous,
self-help organizations controlled by their members. If the co-op enters into
agreement with other organizations or raises capital from external sources, it
is done so based on terms the ensure democratic control by the members and
maintains the cooperative's autonomy.
5. Education, Training and Information - Cooperatives provide
education and training for members, elected representatives, managers and
employees so they can contribute effectively to the development of their
cooperative. Member also inform the general public about the nature and benefits
6. Cooperation 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 communities through
policies and programs accepted by the members.
More recently, in response to changing market conditions, some cooperatives in
the United States have experimented with modifying these principles. For
example, some cooperatives have used closed membership to maximize efficiency,
profitability and the return on member equity investments. New cooperative laws
in some states have granted voting rights to non-user investors.
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