Why Choose a Co-op?

In the ever-evolving business landscape, co-operatives stand as the trailblazers of social enterprise, embodying values of shared ownership, democracy, and community wealth. Understandably, due to a lack of public understanding, some co-ops shy away from using the term ‘co-operative’ in their trading names, opting for labels like ‘social enterprise’ or ‘community-led’, meaning co-ops remain hidden in plain sight. The good news is that by raising awareness of the thousands of thriving co-operatives around Australia, interest in choosing this structure is growing!

In 2024, The Co-op Federation is calling on its members to unite in a collective effort to be ‘out and proud’ about their co-operative structure and use the term for marketing their co-op advantage along the way, increasing awareness.

Why choose a co-op? Better for Businesses and Not-for-Profits

Co-operatives present unique advantages, making them a great choice for both commercial and not-for-profit endeavours, whether for-profit (distributing) or not-for-profit (non-distributing). In both contexts, a co-op structure shines:

Distributing Co-op: At year’s end, a distributing co-op can distribute surplus funds to members based on their activity contributions. This incentivises involvement and ensures equitable power distribution—regardless of the number of shares one person holds; in a co-op, one member = one vote. Fairness is further baked into a co-op structure by limiting any member from owning more than 20% of the issued share capital. To check out a case study of a distributing co-op, see our blog featuring our member Plumbers Supplies Co-op.

Non-distributing Co-op: Opting for a co-op has advantages over a standard Not-for-Profit Association, which can sometimes be seen as ‘lazy’ or ‘there for a handout’. The co-op advantage lies in the requirement for ‘active’ membership. Unlike standard NFPs, non-distributing co-ops demand active involvement from all members in order to have a say.

Rooted in principles of active membership, democracy, member ownership and control, cooperation, and a commitment to community benefit, co-operative enterprises are flourishing. In a time when values-driven structures are actively sought, co-ops emerge as beacons of ethical business practices and community wealth building.

Key Benefits of Co-operatives:

1. Shared Ownership and Control: Every co-op is governed by an elected board, which the active members vote in. Co-operatives empower members with equal ownership and decision-making authority, and members feel included as they have a say and a stake in the co-op.
2. Stability and Sustainability: Co-operatives prioritise long-term economic stability, meaning they often have a long life span beyond involvement by their founding members. They also have the effect of localising the economy and securing supply chains. This strengthens community wealth through local dollars and professional development of the members who become joint asset owners.
3. Global Values: Seven co-operative principles guide the practices of co-operatives worldwide. These principles speak to democracy, engagement, fairness mentioned above, collaboration over competition, and concern for the community.

Co-op businesses attract customers who value fairness and community. In a world where values matter, co-ops are catalysts for positive change. Join the Co-op Federation’s call to arms to “Shout Your Co-op”; let’s shape a future where businesses serve the many, not just the few.