Why Joining a Coop is Truly Beneficial for All
A lot of people are now having an interest of joining food cooperatives because of the reason where there’s a growth of people having interests on local, natural and organic foods and more people now have an increased awareness on economic vulnerability. Another thing is that more and more communities today desire to get stability as well as accountability that a cooperative can provide.
Cooperative ownerships are considered to be a good economic model which can provide different benefits towards a community and to its members (owners). The cooperative models also are powerful tools, especially when we are going to place more focus towards the side of the owner.
The members of a coop will pay fees or dues and they also will get something like a purchase discount in return. Owners are going to invest and will get benefits if the business prospers. A cooperative should create an economic linkage together with its members through activities that will be able to help in creating clear connections with regards to the success of the members and the business.
For cooperatives, patronage and owner equity refunds are tools that are true and have been tested already which helps in maintaining good relationship for both the owner and the cooperative.
A cooperative business needs capital and will generate capital through share investments of its member-owners. Debts and earnings also primary sources of capital.
Member share programs also have two goals where member shares provide the co-op with good capital basis and creates a sense of ownership as well. A co-op’s purpose is for meeting its member’s needs and members must understand that for such purpose to be fulfilled, it needs a capital.
Members will actually own and invest on a cooperative because they trust that doing this is on their best interest. Because our culture does not have many examples of democratic ownership, member share programs should consider including adequate education for owners to understand well how co-op ownerships really work.
It is very important to take note that different types of capital comes with its very own advantages and disadvantages and member shares are also a part of it. Member shares can be slow and can be limiting to get, especially for a co-op that plans on expanding. In some states, they have laws that will allow co-op investment options that would help to overcome the disadvantages in capital formation.
To meet a coop’s needs, member shares actually have an advantage to being a low-cost option because the co-op does not usually pay interest on its member shares because as it does with debt capital. Member investments are usually a lot more dependable and this is less risky than having to rely with its earnings as a main source of capital.
The member share investment also are advantageous because the shares are not taxable income on the co-op.