Rochdale Principle: Member Economic Participation

Around the world, cooperatives follow a common set of guidelines that harken back to 1844.

That’s when a group of merchants and peasants from Rochdale, England, decided to pool their money together and start a business that suited their needs. This allowed them to take advantage of economies of scale and profit-sharing that they would never have been able to touch. They called themselves the “Society of Equitable Pioneers”. Their original seven Co-operative Principles were adopted by the International Cooperative Alliance (ICA) in 1937, updated every thirty years and celebrated by every principled ICA Co-op.

Principle Three is Member Economic Participation. To quote a co-operator friend, “…this is really where the proverbial rubber hits the road!”. Our member-owner households, in addition to owning an equal share of Bethlehem Food Co-op, are each responsible to make an equal contribution toward the co-op’s financial capital: the single equity investment of $300. This capital is the foundation on which our business will invest in long-term development. While we envision our new community-owned grocery store, the co-op must build relationships with fair lending institutions as well as fund important parts of startup infrastructure like outreach materials, media and our secure website. This year, we plan to further invest cooperative capital by hiring talented community members like you.

Like Kensington Community Food Cooperative (KCFC) in Philadelphia, our business model also includes the eventual participation of member-investors, who can earn competitive rates of return on their loans to open the co-op. KCFC’s member loan campaign launched in Fall 2014 and, at press time, is on track to raise $200,000.

When a cooperative enterprise is run efficiently, a surplus is re-invested so that no individual or group benefits more than any other -- and the co-op, in turn, invests in their community through member services, local and ethical product sourcing, education (see Principle Five), and charitable giving (see Principle Seven). For example, Mariposa Food Co-op in Philadelphia voted to provide a small discount on all products for card-carrying members of all retail food co-ops including startups. Mariposa’s nearly $5 million in annual sales have made their Baltimore Avenue store, which opened in 2012, the largest employer in the Cedar Park neighborhood.  At some successful food co-ops, such as Wheatsville in Austin, Texas, and The Common Market in Frederick, Maryland, member-owners have voted to give back in the form of a Patronage Rebate, thanks to an opportunity in the tax code for member-owned cooperative enterprises!  

The third principle makes it clear that we as co-operators have agreed to participate in an association that exists for the good of the whole, not merely for the profit of a few individuals.

How can we see Principle Three in action today? Join the co-op and shop co-op!

Some of your favorite items might be produced by a co-op.

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Visit the National Cooperative Business Association,!

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