What is a Cooperative?

A cooperative is a member-owned corporation created to provide a service for the members that the individual members could not on a practical basis provide for themselves.  In our instance, the members of our cooperative are businesses and individuals who have combined their buying power to purchase energy in the wholesale market at wholesale prices.  That makes the Energy Cooperative of America a "consumer cooperative" (our members are consumers).  In other instances the members of a cooperative can be producers who combine their efforts to market their product (the large agricultural cooperatives like Welchs, or Ocean Spray are producer cooperatives). 

Cooperatives as a type of corporate entity have been around for over 150 years.  Over the years the Cooperative Movement has developed 7 principles that distinguish a cooperative from ordinary businesses. 

The Seven Cooperative Principles

1. 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.

2. Democratic Member Control
Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Those persons serving as elected representatives are accountable to the membership. Cooperatives practice one member, one vote regardless of the number of shares a member may own.  

3. Member Economic Participation
Members contribute equally to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Cooperatives practice "limited return on equity". The members access to the service provided by the cooperative is the primary benefit from a capital contribution to the cooperative and the return on the capital invested is, by definition, a secondary  consideration.  

4. Autonomy and (Political) Independence
Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreement 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.

5. Education, Training, and Information
Cooperatives provide ongoing cooperative 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.

6. Cooperation Among Cooperatives
Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structure.

7. Concern for Community 
While focusing on member needs, cooperatives work for the sustainable development of their community through policies accepted by their members.