Put simply, a cooperative is a group of like-minded individuals that collectively own and operate an establishment based on the principles of democracy, shared responsibility, and a collective distribution of profits. Examples of cooperative structures can be found in a multitude of domains, and can work in a wide variety of situations. Although they vary in type, size, and structure; one principle unites all cooperatives; to benefit its members through shared value and collective decision making.
Types of cooperatives
Worker Owned Cooperatives
Worker cooperatives are businesses owned and operated by its workers. This means that each worker owner receives a share of the profits, as well as a say in the direction of the business by way of a single vote in a democratic process. The structure of a worker co-op is outlined in their bylaws, which are written and agreed upon by all members. Because of this, rules governing worker co-ops vary widely based on the will of the members.
Consumer Cooperatives
Consumer cooperatives are owned by patrons that buy into the co-op with a one-time or recurring fee, and thus receive member benefits through a variety of perks. Benefits include, but are not limited to, lower prices, increased availability of products, and profit dividends. Some examples of industries with consumer cooperatives are grocery stores, utilities, healthcare, and insurance.
Producer Cooperatives
Producer cooperatives are a union of individuals or companies that combine resources to better market or sell their products by utilizing their collective power. The two most popular producer cooperatives are agricultural, where farmers pool their crop together and share profits, and artisan, where artists share space and resources to more effectively sell their work.
Housing cooperatives
Housing cooperatives consist of property owned and maintained by its residents. Through collective buying power, housing cooperatives offer more stable living situations than an individual purchaser might. They share the cost of mortgages, repairs, and utilities.
Financial cooperatives
Financial cooperatives are nonprofit, member owned services that provide financial stability and support to its members. Institutions such as credit unions, investment co-ops, and savings co-ops, offer benefits by way of lower fees, better interest rates, and easier access to credit. As a large part of the American financial culture, financial cooperatives serve an important role within the cooperative community by affording lending opportunities to cooperative entities that would otherwise lack the ability to raise the necessary capital for their venture.
Purchasing cooperatives
Purchasing cooperatives are often industry partners that use their collective demand for goods to obtain lower pricing and receive better terms on purchasing contracts. Often used by governmental entities, municipal departments can use cooperative purchasing agreements to secure supplies for schools, police and fire departments, sanitation services, etc.