Making Dollars and Sense of Cooperation
Perhaps one of the most impressive aspects of cooperatives is that they all apply set principles and values to fulfill their respective visions and missions. The seven principles, established by the International Cooperative Alliance in 1995, include member economic participation and concern for community. The 12 cooperative values include self-help, equality and honesty. Together, these guidelines set co-ops-including credit unions-apart from all other business models and demonstrate a commitment to creating a better world, starting in the communities we call home.
In my years of working with cooperatives, it has become especially clear to me that more cooperatives need to embrace the sixth principle: cooperation among cooperatives. Everyone benefits when cooperatives support each other. A business partnership between two co-ops means that both cooperatives now have an opportunity to expand and grow, creating strategies for both sustainability and, ultimately, increased member value. By working together, cooperatives make a greater impact throughout their communities through job creation, an increased sense of ownership among constituents and respect for the democratic process.
Last year, NCBA sponsored a report by the University of Wisconsin Center for Cooperatives, showing the impact of nearly 30,000 cooperatives on the national economy: creating jobs and keeping profits circulating in their communities. These cooperatives own more than $3 trillion in assets, and generate over $500 billion in revenue. Their two million jobs annually generate $75 billion in wages and benefits paid.
Co-ops are clearly an important force in society, and the impact is magnified when multiple cooperatives join forces.
NCBA has just launched a planning committee to create a Cooperative Equity Fund. This body is chaired by Larry Blanchard of CUNA Mutual and includes representatives from all cooperative sectors, including credit unions. The committee's purpose is to create a business plan for a national Cooperative Equity Fund that will accept investments from individuals, cooperatives and other businesses, foundations and other organizations. These investments will provide a source of equity capital for new and expanding cooperatives, enhancing opportunities to grow what many consider to be the best business model for economic and social progress.
This will not be the first time that co-ops have helped launch other co-ops. In Olympia, Wash., the TULIP Cooperative Credit Union received key support from the Olympia Food Co-op, which provided a paid part-time coordinator for the long and difficult charter process, then gave up valuable retail space for an in-store branch. BECU provided the ATM through which transactions are made, and the Washington State Employees Credit Union offered critical back-end support. TULIP's website now prominently thanks them and five other neighboring credit unions that have offered support, and uses this as a teachable moment about why their "competitors" are so helpful.
Cooperation among cooperatives can also protect existing cooperatives. In 2006, the Lafayette Federal Credit Union, Kensington, Md., was on the verge of demutualizing. Its board was prepared to abandon the co-op model in favor of profit motives and stock options. When members objected, CUNA and NCBA helped save the co-op.
We are at a pivotal time in our common cooperative history. As more and more consumers watch the profit-driven business models crumble, we must harness the power of cooperation to demonstrate how our business model endures the test of time. To play their part at this moment, I encourage credit unions to look among the cooperative community to honor the sixth principle. All you have to do is look within your communities and see your neighbors as fellow cooperators. There's often a retail food co-op, a hardware store, an arts and crafts shop or a group of farmers that could easily become part of your membership once they recognize your shared identity. Cooperatives offer you a chance to increase your membership and a way to improve your own value in the communities where you live.
Next month, cooperative leaders from practically every sector will gather in Washington, D.C., for my organization's annual meeting and educational conference. Our theme this year is "Cooperatives Transforming the Economy," and I'm excited to see the in-depth programming that will showcase the sixth principle in action.
Our event also offers you a great opportunity to get to know the cooperative that may be just down the road from your credit union. I would be highly surprised if you attend this event and didn't walk away with at least one potential partnership within the co-op community to strengthen your own credit union.
I hope you'll make your own choice for cooperation and join us for our event May 4-6. With so many positive signs pointing toward co-ops as the solution to our nation's challenges, there has never been a better time to cooperate.
Paul Hazen is president/CEO of the National Cooperative Business Association. He can be reached at 202-383-5444 or email@example.com