Commonly referred to by co-op, co-operative, or coop, a cooperative is a legal term that refers to autonomous associations of individuals voluntarily uniting to meet common social, economic, and cultural necessities or aspirations by means of a democratically-controlled and jointly-owned enterprise.
A cooperative could include the following:
- Business managed and owned by individuals that utilize the services (consumer cooperative)
- Non-profit community organization
- Organizations managed by individuals receiving accommodations (housing cooperative)
- Organizations managed by individuals that work at the location (worker cooperative)
- Hybrid of consumer and worker cooperatives, or credit unions.
- 2nd or 3rd cooperatives, where members are cooperatives of others.
- Multi-stakeholder cooperative, including local actors that deliver community necessities and civil society.
According to research from Worldwatch Institute in 2012, it was discovered that nearly 1 billion people from 96 countries around the world were members of a minimum of one cooperative. Meanwhile, the total turnover of the three hundred largest worldwide cooperatives exceeded $2.2 trillion. If these cooperatives formed a single country, it would be the 7th largest.
Cooperatives are defined by one dictionary as being “jointly owned enterprises that engages within the distribution and supplying of services or production of goods, being operated under members for mutual benefits, generally being organized by farmers or consumers.” Usually, cooperative businesses have higher economical resilience compared to other types of enterprises, and has twice the surviving co-operatives (80 percent) after the initial five years in comparison with other models of business ownership (41 percent). Additionally, cooperatives commonly have a social goal where a portion of trading profits are put back into the communities to accomplish certain goals. For instance, in 2013 retail cooperatives within the United Kingdom had invested 6.9 percent of pre-tax profits within the communities they traded, compared to only 2.4% invested in communities of rivaling supermarkets.
In 1985 the first international association formed, the International Co-operative Alliance, was part of the cooperative movement. This alliance included World Council of Credit Unions, the International Raiffeisen Union in Germany, and the National Cooperative Business Association in the United States. These three organizations serve as the oldest national membership association sectors. Furthermore, the sector is dedicated to making sure cooperative business has similar opportunities compared to other businesses which operates within the country and provide customers access to the cooperatives within the marketplace.
In the 1970s, a National Cooperative Bank was formed in the United States. Meanwhile, by 2004 new associations were focusing towards worker co-operatives which resulted the founding of the United States Federation of Worker Cooperatives.
Ever since 2002, credit unions and cooperatives have been distinguished based on the internet extension .coop on domains. Meanwhile, since 2014 the WOCCU and ICA cooperative credit unions have been identifiable from a coop ethical consumerism label, following the approach of the International Cooperative Alliance during their introduction of Cooperative Marque.
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