One of the ways cooperatives differ from other business structures is their adherence to cooperative principles and values that reflect social, political, and business concerns. Cooperatives trace the roots of these principles to the Rochdale pioneers, who established the first modern cooperative in Rochdale, England in 1844. These principles have been refined, adapted, and reinterpreted over time. The seven principles used by the International Cooperative Alliance today are generally accepted by cooperatives worldwide.
Cooperatives are also based on the values of self-help, self-responsibility, democracy, equality, equity, and solidarity. Cooperative members believe in the ethical values of honesty, openness, social responsibility, and caring for others.
1. Voluntary and Open Membership
Cooperatives are voluntary organizations, open to all people 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 – those who buy the goods or use the services of the cooperative – who actively participate in setting policies and making decisions.
3. Member Economic Participation
Members contribute equally to, and democratically control, the capital of the cooperative. This benefits members in proportion to the business they conduct with the cooperative rather than on the capital invested.
4. Autonomy and Independence
Cooperatives are autonomous, self-help organizations controlled by their members. If the co-op enters into agreement with other organizations or raises capital from external sources, it is done so based on terms the ensure democratic control by the members and maintains the cooperative’s autonomy.
5. Education, Training and Information
Cooperatives provide education and training for members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperative. Member also inform the general public about the nature and benefits of cooperatives.
6. Cooperation among Cooperatives
Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.
7. Concern for Community
While focusing on member needs, cooperatives work for the sustainable development of communities through policies and programs accepted by the members.
More recently, in response to changing market conditions, some cooperatives in the United States have experimented with modifying these principles. For example, some cooperatives have used closed membership to maximize efficiency, profitability and the return on member equity investments. New cooperative laws in some states have granted voting rights to non-user investors.