What is a cooperative?

Cooperatives exist to serve their members, whether they are customers, employees or the local community.  Cooperatives want to trade successfully – they are businesses, not charities, after all. Members, such as farmers or freelancers, tenants or taxi drivers, can often do better by working together. And sharing the profit is a way to keep it fair and make it worthwhile. Rather than rewarding outside investors, a cooperative shares its profits among the members.

Cooperatives are businesses, but not like any other.

Cooperatives are people-centred and value-based businesses that put the power back into the hands of the citizens. They are collectively owned and democratically governed by their members (consumers, producers, employees or local communities) who have an equal say in the business management and the way the profits are shared. Cooperatives act guided by common values and principles set in stone as the “Cooperative Identity”.  

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Learn more about the cooperative values & principles

From the outside, a cooperative may look like any other business. It is what goes on inside that makes them different. Cooperatives are businesses with unique qualities and ways of working that provide a more collective, long-term approach to economic growth. By their very dual nature as enterprises and civil society organisations, they work closer to the local community and as a movement, share knowledge and provide opportunities in ways that are impossible for shareholder-driven businesses. 

Let’s take a closer look at co-operatives. Cooperatives are successful businesses because:

  • They represent a successful force for economic growth and social cohesion in Europe;
  • They are businesses, not NGOs: they trade, but share equally and reinvest our profit;
  • They work in all economic sectors: retail, agriculture, housing, banks, healthcare, insurance, consumers, renewable energy, intellectual property, water, industry…;
  • They come in all types and sizes: from small companies owned by employees to large banks owned by clients

 

Members, not shareholders

The fundamental feature of cooperatives is that they have members – not shareholders – who decide democratically. Depending on the type of cooperative, these members can be employees, producers or clients depending on the kind of cooperative. At the same time, they are the owners of the cooperative business. Therefore, they have a direct say on the profit and how it is shared. 

Cooperatives are unique because their members are stakeholders at different levels. For example, workers have a direct stake in worker cooperatives, producers in producers or retailers’ cooperatives, and users in cooperatives of users (consumer cooperatives, housing cooperatives, cooperative banks, etc.). Multi-stakeholder cooperatives (such as an increasing number of social cooperatives and community cooperatives) also feature different types of stakeholders. This leads to a more collaborative, participatory and long-term approach to business engagement.

 

Thinking differently: 140 million members in Europe

Cooperatives constitute a valuable alternative to traditional businesses and exist in all sizes, from micro-enterprises operating locally to large companies working at the international level. They are active in all sectors of the economy, from industry to services, healthcare to housing, agriculture to banking and energy to culture.  

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Learn more about the cooperative movement

Cooperatives in Europe represent 163,000,000 members, 5.4 million employees and 250,000 enterprises. As a European network, we implement activities for sustainable development and innovation, while boosting economic growth and social cohesion in territories. We believe in the power of the people and are committed to fostering that creativity that allows individuals to collectively develop and implement long-term solutions to the most pressing challenges.  

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