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Co-op FAQs and Facts

How can I distinguish a co-op from other organizations?

A co-op is a business, usually incorporated, that sells goods and services. It is not a charitable organization or a social service agency.

Who benefits from the co-op's existence?

A co-op exists primarily for the benefit of its members. Many co-ops also support other parts of the community through various programs and philanthropic activities as part of their commitment to cooperative values and principles.

Who controls a co-op?

In a cooperative, members democratically control the direction of the business. In most co-ops each member gets one vote. Members elect a board of directors to monitor the business, set goals and hire management to operate their business. Ultimately, the board is accountable to the members for its decisions.

What motivates people to form a co-op?

In private or stockholder-owned businesses, individuals invest to earn a financial return. In a co-op, individuals are motivated by a shared need for certain products or services. By joining together, members gain access to products, services or markets not otherwise available to them. In other words, when forming a co-op members are motivated to become co-owners of the business primarily so that their mutual needs can be met. And co-ops return financial gains to their members, whether through discounts, lower costs or patronage refunds. People join existing co-ops for a variety of reasons. Whether it is the commitment to community, the democratic approach to business, the desire to be part of a business that is locally owned or something else "uniquely co-op" that appeals, anyone can join a cooperative!

Sole proprietorship/partnership

A business owned by one or more people, usually to provide employment and a return on investment to the owners. Local examples include restaurants, bakeries and bookstores.

Sole Proprietorship/Partnership

Investor-owned corporation

A business whose stock is traded publicly by any number of investors. Examples include Safeway, Whole Foods, Starbucks, Microsoft and General Motors.

Investor-Owned Corporation

Cooperative

A member-owned and member-controlled business that operates for the mutual benefit of all members. Examples include your local food co-op, a local housing or child care co-op, Group Health Cooperative and any credit union. The cooperative form of business is one that brings the owners, controllers, and users of a business together into one group.

Cooperative

Facts

  • There are more than 29,000 co-ops in the United States with Americans holding 350 million co-op memberships.
  • U.S. co-ops provide over 2 million jobs and create about $75 billion in annual wages with combined revenue of nearly $653 billion.
  • Almost 2 million farmers are members of the various 2,106 agricultural cooperatives in the U.S. They create over 191,300 jobs and the top 100 largest farmer co-ops have a combined annual revenue of $176 billion.
  • Credit unions provide financial services to over 100 million members in the U.S. and provide 275,000 jobs.
  • More than 900 electric co-ops deliver electricity to more than 18 million homes, schools and businesses in 47 states. This makes up 42% of the nation's electric distribution lines and covers 75% of our country's land mass.
  • Five of the top ten largest insurance companies are co-ops, serving 25% of the U.S. market.
  • Food co-ops have been innovators in the areas of unit pricing, consumer protection, organic and bulk foods, and nutritional labeling. They also have significant environmental and social benefits compared to conventional grocers. Learn more.
  • There are over 1,000 childcare co-ops in the U.S., childcare costs can be reduced up to 85% by cooperative daycares.
  • About 1.2 million rural Americans in 31 states are served by the 260 telephone cooperatives.
  • Over 1.5 million people live in cooperative housing.
  • The .coop web address extension has been adopted by thousands of co-ops and while many cooperatives may use .com or other domain extensions, when you see .coop, you can be sure that it's a cooperative. For more information, visit www.coop.
  • How do co-ops impact the economy? Check out the University of Wisconsin Center for Cooperatives' research on the Economic Impact of U.S. Cooperatives and the Hoffer Report (summary) to see the impact co-ops have in Northwestern New England.