The Time-Tested Co-op Solution

During a dinner conversation with a 20-year-old college student, I was discussing my work with cooperative businesses. In particular, I was discussing my work with electric cooperatives. “You mean to tell me that the people in the community can actually own their electric company?” he said. I replied that yes, there are actually about 900 of them serving 42 million people and businesses. His response: “That is so cool. How do I start one?”

This little anecdote is emblematic of a nationwide renaissance of interest in the cooperative business model. Businesses like Uber or Airbnb may market themselves as part of the “sharing” economy, but in reality they are investor-owned businesses where the owners never have to use the service. Cooperatives, on the other hand, blend the best of the free market with an ownership model that requires the co-op to be responsible to the people who actually use the goods or services. The only other owners of your electric co-op are those in the community who also get electricity from your co-op.

There are more than 29,000 cooperatives in the United States in every sector of our economy, responsible for employing almost 1 million direct employees. Cooperatives generally fall into four categories:

Consumer: These co-ops are owned by the people who use the service, such as electric co-ops, credit unions, housing, retail food stores, and health care. They are designed to make the services available and affordable.

Producer: These include some of the best-known brands in the country: Sunkist, Welch’s, Cabot Cheese, Land O’ Lakes, Organic Valley and Blue Diamond. Farmers came together so they could better market and earn a sustainable price for their goods.

Purchasing or Shared Services: Co-ops such as Ace Hardware, Carpet One and True Value are all examples of small business people coming together so they can buy goods at similar prices to the big box stores. Many franchise owners of brands like KFC, Pizza Hut and Burger King use a purchasing cooperative to keep costs lower and pass on the savings to consumers.

Worker Co-ops: In this type of co-op, the workers own the business, and it can be in any kind of industry. Successful worker co-ops include: Isthmus Engineering (more than 30 engineers own the firm and select their manager); and Equal Exchange, which imports coffee, tea and chocolate while paying a fair price to the co-op farmers who grow the products. Other worker co-ops include those for health care workers, taxi drivers and information technology.

What do all these co-ops have in common? They truly are designed to be “shared” by all the members, because all the users are owners. All co-ops share a commitment to the same seven cooperative principles, which connect all co-ops. In my work with co-ops from all sectors in this country and around the world, I can attest that there is a co-op solution for any possible challenge facing your community.

Co-ops are all about local people simply coming together to solve a problem. One of the reasons co-ops are so popular in so many different industries is that they answer the question: What’s in it for me? With a solution that also serves we, the community.

So the next time you or your community is facing a problem, think cooperatively. Chances are, there will be a cooperative solution.