CGIN

A co-op is an organization that takes the idea of working together and puts it into a business structure. A cooperative is a business voluntarily owned and controlled by the people who use it—its members. It is operated solely for the benefit of its members, to meet their mutual needs. When groups of people have similar needs—such as the need for lower prices, more affordable housing, or access to telecommunications services—cooperatives offer great potential to meet those needs.

At its core, a co-op is a business. It is subject to the same needs and demands of any business: co-ops require sufficient financing, careful market analysis, strategic and comprehensive planning, well-trained and competent personnel. Co-ops are not immune to the market and economic forces that cause small businesses to struggle and fail.

But in several important ways, co-ops are also unique and different. Most distinctly, a cooperative business is owned by the people who use its services—the members. Co-ops may resemble other businesses outwardly, but the fact that they are owned by members makes them unique.

Although definitions of co-ops vary, they all contain the following elements:

• Co-ops are owned and controlled by those who use their services (the members).
• Co-ops are democratically governed.
• Co-ops are businesses, not clubs or associations.
• Co-ops adhere to internationally recognized principles.

A simple definition of a co-op:

A co-op is a member-owned, member-controlled business that operates for the mutual benefit of all members and according to common principles established for cooperatives.

There are three basic types of co-ops:

• Producer co-ops provide goods or services to members who are involved in producing products, such as farmers or artists.
• Worker co-ops are owned and controlled on a democratic basis by their employees.
• Consumer co-ops provide goods or services used primarily for personal consumption. Food co-ops are typically organized as consumer co-ops.

For more information

A Primer about Cooperatives
Basic information about cooperatives, including descriptions and examples of the three major types of cooperatives, an overview of co-op history, some statistics about cooperatives, and a general overview of how co-ops operate.

Cooperatives 101: An Introduction (pdf)
A more detailed overview about the cooperative form of business.

Basic Co-op Orientation
A website oriented toward kids that explains co-ops in a down-to-earth way that everyone can understand.

International Cooperative Alliance
The International Cooperative Alliance brings together cooperatives from over 100 countries. The ICA’s web pages provide general information about cooperatives around the world.

National Cooperative Business Association
The National Cooperative Business Association’s website provides a wealth of basic information about cooperatives in the United States.