How Co-ops Actually Work
New to Co-ops? Here's what you need to know:
This video by co-op developer Renata explains the basics of cooperative economics better than anything I’ve seen. I’m sharing it here because clarity matters, and credit matters too.
This really helped me understand the co-op model when I was starting Co-op Evolution. Source: MonaGinesta (YouTube)
What is a Co-op?
A co-op is a business owned and controlled by it’s members, typically to serve a community need as the core benefit.
Ownership
Membership – Always owned by a group of people with a common goal.
Control
Democratic – members conrol the co-op on the basis of one member = one vote (instead of one share = one vote)
Benefits
Purpose-based – benefits are not necessarily monetary. Typically started to satisfy a need that is not being met e.g. housing, healthcare, organic food, etc
Types of co-ops
Their membership model typically falls into one of three categories: consumer-owned, worker-owned, and producer-owned.
Ownership
Membership – Always owned by a group of people with a common goal.
Control
Democratic – members conrol the co-op on the basis of one member = one vote (instead of one share = one vote)
Benefits
Purpose-based – benefits are not necessarily monetary. Typically started to satisfy a need that is not being met e.g. housing, healthcare, organic food, etc
Reflection:
Types of Co-ops
Co-ops are so dynamic that they can be small businesses or huge multinational enterprises. They can be found in almost every business sector.
Cooperative Principles
Co-op principles guide how co-ops put their values into practice and ensure they operate according to their core beliefs of democracy, fairness, and member participation.
1. Voluntary and Open Membership
Nobody can force anyone to be part of a co-op. They are voluntary organisations, open to all people able to use its service and willing to accept the responsibilities of membership.
2. Democratic Member Control
Co-ops are democratic organisations controlled by their members on the basis of one member = one vote. Members actively participate in setting policies and making decisions.
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 co-op rather than the capital invested.
4. Autonomy and Independence
No outside entity can dictate the workings of the co-op. Even when they enter into partnerships or receive funding, they maintain democratic control.
5. Education, Training, and Information
This helps new and existing members to truly understand how the business is working so they can contribute effectively. They also inform the public about the nature and benefits of cooperation.
6. Cooperation Among Cooperatives
Co-ops strengthen the movement by working together through local, national and international structures. This builds solidarity and resilience across the sector.
7. Concern for Community
Co-ops work to improve the social, economic and environmental wellbeing of their communities. They aim for sustainable development in service of the common good.
Reflection:
Cooperative Principles
While these are the seven core principles, not every co-op lives them out equally.
Many take them very seriously, some apply them more loosely or prioritise certain aspects over others.
That’s part of the reality of any system – but the principles still offer a shared foundation to measure against and build from.
Co-ops Worldwide - 145 Countries
Source: International Cooperative Alliance (ICA)
3 million+
Co-operatives
280 million
Members
Around 100 million
Jobs
$3 trillion+
Annual Turnover
Co-ops in the UK
Source: Co-operatives UK (2024 report)
7,586
Independent Co-operatives
14.1 million
Members
£41.1 billion
Combined Turnover
250,128
Employees
Co-ops in the USA
Source: NCBA CLUSA (2024)
65,000+
Co-operatives
Over 2 million
Jobs
Over $700 billion
Annual Revenue
1 in 3 Americans
Members of a co-op.
Reflection:
Co-ops in the USA
In the US, this figure includes large-scale membership in credit unions, utility co-ops, and similar institutions.
While many Americans are technically members, not all are actively involved in decision-making or even aware they’re part of a co-op.
It highlights the reach of the model – but also the need for deeper engagement.
Cooperative Survival Rate
Source: Co-operatives UK (2020 report)
81.2%
Co-ops – on average, 81% of co-operatives survive their first five years in business.
39.6%
General Businesses – In contrast, only about 40% of all new businesses survive the first five years.
Reflection:
Cooperative Survival Rate
Cooperatives are twice as likely to survive the notoriously challenging first five years, compared to 42% of general businesses.
This resilience is attributed to factors like member engagement and a focus on long-term sustainability.