The Value of Cooperatives | Part 1 of 4

Learn about how co-ops work and the benefits of being a member

wrote today's post.

I don’t know about you, but it seems like I’m hearing more and more about cooperative businesses lately, even the United Nations has declared 2012 to be the International Year of Cooperatives.  Co-ops are popping up and thriving, which as it turns out is a really great thing for the communities they serve.  At we’ve been so inspired by the social and economic benefits of cooperative business that we’re working with the Woodinville residents and producers to bring a local food co-op to the community.  Over the next four posts I’ll be exploring cooperative business: explaining co-op basics, why co-ops are a boon to the community, how to start co-op organizing efforts and the importance of community support and involvement. Let’s get started with the basics.

What exactly is a co-op?

A cooperative is a jointly owned enterprise that exists to benefit its members.    Like all businesses, co-ops are created to solve an existing problem or to fill a gap in the market.  Typically a small group of like-minded volunteers come together with an idea and work cooperatively make their idea a reality.  REI is a local example of a wildly successful co-op that was started because a young mountaineer couldn’t’ find the gear he needed:

“REI's thriving spirit was born in the 1930s when Pacific Northwest mountaineer Lloyd Anderson began his search for an ice axe. Lloyd wanted a reliable tool at a reasonable price but had no success in finding one locally. He eventually found a high-quality model in an Austrian alpine gear catalog for a mere $3.50, shipping included. Word about his find quickly spread among Seattle's climbing community, which led Lloyd and his wife, Mary, to convene with 21 fellow climbers to establish an outdoor gear co-op in 1938.”

 REI was started and exists today as the largest consumer co-op in nation with over 4 million member-owners.  Though the gear has changed, the co-op is still committed to helping people enjoy the outdoors by offering innovative, high-quality outdoor gear and apparel.  Every year members benefit from special sale opportunities and by receiving about 10% of annual purchases back in the form of a dividend check.

REI may be the biggest and most well known co-op around, but it is just one of hundreds of co-ops here in the northwest.  How many can you think of?

Co-ops exist to benefit its members, what does this really mean?

When you choose to join a co-op and pay your membership fee, you become a partial owner of the co-op; your membership fee acts as an equity investment.  Benefits can be realized in a number of different ways depending on the co-op.  For example, 21 Acres Local Food Co-op will benefit patrons and producers in potentially different ways.  Producers may find the greatest benefit is having an additional outlet for selling their goods without needing to increase staffing, where as patrons might find the most benefit in being able to find natural, seasonal, locally produced food, year round under one roof.  Both will reap the benefit of patronage dividends, which are the net profits returned to owners based on their use of the co-op throughout the fiscal year. 

I own part of this business, now what?

Put that way, co-op membership can seem a little daunting, but it’s really pretty easy!  Once you are a member-owner you will have a voice through the opportunity to vote in the annual election of the co-op board of directors.  The board is then responsible for monitoring the co-op’s financial status, ensuring sound management and setting long–range goals while strategically planning for the co-op’s future.  Additionally, you have the responsibility to patronize the co-op, ensuring the business will thrive.  When you use the co-op you are increasing the likelihood that the co-op will be profitable, and return a dividend while keeping money circulating in the community bolstering the local economy.

In my next post I’ll be talking more about the value a co-op brings to the community.  In the meantime, there are a few great co-op events coming up this month for those of you who would like to learn more or get involved in organizing the 21 Acres Local Food Co-op in your community:

Saturday, June 18th @ 6pm:  Potlucks with a Purpose; The Value of Cooperatives

Details:  Transition Snoqualmie Valley

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Karin Hsiao June 18, 2011 at 03:14 PM
Thanks for this series, and for planning for a food co-op. I belonged to one way back when in Davis, CA, and loved it. I'm really looking forward to having a co-op at 21 Acres!
Jerry Gropp Architect AIA June 19, 2011 at 08:46 PM
Our REI number is 3213- that always boggles the mind of the cashier at check out.
21 Acres June 20, 2011 at 05:10 PM
Karin, we'd love to see you at our meeting on June 29th. The more community involvement the sooner the co-op will become a reality!
21 Acres June 20, 2011 at 05:13 PM
Wow Jerry! I'll bet its been quite interesting watching REI transform over the years. And just think, you could be one of the first members of the 21 Acres Local Food Co-op!


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