The International Cooperative Alliance defines a cooperative as 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.
CDS understands the key elements of a cooperative as both a democratic association of members that seeks to meet one or more shared needs through a business. In this regard, a co-op is a business owned and governed by those who use its services, and that the primary purpose of the cooperative is to deliver a needed product or services that meets member needs at a sustainable cost; the focus of the co-op is not to generate profits per se. If surplus is generated, the tradition of the cooperative community is to reserve funds for future operations and other mission related purposes, with any cash distributed to owner-members in proportion to the business done during the year with the owner-member. Cooperation is a powerful tool to help communities meet local needs.
Co-ops cultivate sustainable development on a human scale, and provide consumers with needed products and services including food, housing, health care, day care, elder services, electricity and banking services (credit unions are in fact financial services 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.
7 Cooperative Principles
The cooperative principles are guidelines by which cooperatives put their values into practice:
- 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.
- Democratic Member Control: Cooperatives are democratic organizations controlled by their members, 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 organized in a democratic manner.
- 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. They 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 the 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.
- 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 on terms that ensure democratic control by their members and maintain their cooperative autonomy.
- 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 inform the general public – particularly young people and opinion leaders – about the nature and benefits of cooperation.
- Cooperation Among Co-operatives: Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional, and international structures.
- Concern for Community: While focusing on members’ needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.
These 7 principles were adopted in Manchester (UK) by the General Assembly of the International Cooperative Alliance (ICA). 23 September 1995, on the occasion of the Alliance’s Centenary. The Statement was the product of a lengthy process of consultation involving thousands of cooperatives around the world.