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Cooperative Principals

History of the Cooperative Principles

Cooperatives have been around for hundreds of years since Benjamin Franklin formed the first mutual insurance company in Philadelphia.

Today’s cooperatives trace their origins to England’s Industrial Revolution, when cooperative initiatives were common and offered their working-class members the promise of economic opportunity and democratic control. But until the founding of the Rochdale Equitable Pioneers Society in 1844, none were successful. When the self-described “Rochdale Pioneers” opened their first cooperative food shop, they sold only five products – butter, flour, oatmeal, sugar, and candles – but promised to provide members with “purest provisions, giving full weight and measure.” They went on to establish many other member-owned businesses.

The founders of the Rochdale society developed a series of operating principles which ensured their success and the success of hundreds of cooperatives in England, and beyond which soon imitated them. Today, these basic principles still guide cooperatives around the world.

 

The Seven Cooperative Principles:


1. Open and Voluntary Membership

Membership in a cooperative is open to all persons who can reasonably use its services and stand willing to accept the responsibilities of membership, regardless of race, religion, gender, or economic circumstances.

2. Democratic Member Control

Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. Elected representatives (directors/trustees) are elected from among the membership and are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote); cooperatives at other levels are organized in a democratic manner.

3. Members Economic Participation

Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital remains the common property of the cooperative. Members allocate surpluses for any or all of the following purposes: developing the cooperative; setting up reserves; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.

4. 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 as well as their unique identity.
(Autonomy means; the quality or state of being self-governing especially the right of self-government. The territory was granted autonomy.)

5. Education, Training, and Information

Education and training for members, elected representatives (directors/trustees), CEOs, and employees help them effectively contribute to the development of their cooperatives. Communications about the nature and benefits of cooperatives, particularly with the general public and opinion leaders, helps boost cooperative understanding.

6. Cooperation among Cooperatives

By working together through local, national, regional, and international structures, cooperatives improve services, bolster local economies, and deal more effectively with social and community needs.

7. Concern for Community

Cooperatives work for the sustainable development of their communities through policies supported by the membership.