The most important thing to understand about being a member of a co-op is this: as a member, you are an owner of the business.
This might sound like a gimmick, but co-op members really do play an ownership role in a co-op. This comes with more responsibilities and benefits than, say, membership at a gym or Costco.
What co-op members get — and can give
The benefits of co-op membership include sharing in the co-op’s profits, having a say at members’ meetings, and voting or running for the board of directors. Most importantly, all co-op members have one, equal vote on decisions made by the co-op’s members.
In addition to these benefits come responsibilities. The most important expectation is that co-op members will contribute financially to the business by using its services. This might include shopping at a retail co-op or working 40 hours a week in a worker co-operative. Beyond this, members may be expected to pay membership fees, volunteer some of their time, or serve on a committee. The kind of co-op you join often determines your level of engagement.
In some cases, like in times of crisis, co-ops may need their members to play a more active role than normal. A great example is the way members stepped up to help Maple Creek Co-op when it faced financial difficulty.
How members saved Maple Creek Co-op
This small town retail co-op (now part of the larger Pioneer Co-op) sells groceries, fuel, hardware, and farm supplies — a vital service in a rural, agricultural area of southwest Saskatchewan.
In 1982, Maple Creek Co-op had expanded its operations — it had introduced new lines of business and built new facilities. To do this, it took out some big loans with high interest rates (it was the 80s, after all). In an environment of stiff competition and economic recession, the co-op found itself near bankruptcy — paying $165,000 in interest made it difficult to stay afloat. The co-op considered closing down locations. But losing local access to its products would have affected residents of not just the town, but the entire region.
Not wanting to cut back on its services, the co-op’s board decided to ask its members for financial help — and the members pitched in, big time. Fearing the loss of their co-op, members invested $150,000 in new equity and over $100,000 in prepaid accounts. This gave the co-op the cash it needed to secure an interest-free loan from its wholesaler, Federated Co-operatives Limited.
In fact, a single member, named Barney, contributed $40,000. According to Manager John Pituley, “Barney was the kind of guy who believed in the co-op, the pool, and the credit union” — the kind the guy Pituley referred to as “co-op-minded people.”[i]
Members are key to success — if they know their role
Maple Creek had a lot of people who loved and believed in their co-operative. Their dedication to the business speaks to the co-op’s importance to the community, and the community’s importance to the co-op. These members embraced their role not just as passive consumers, but as owners who were responsible for its success.
As the Maple Creek case shows, co-op members need to understand the importance of their role. Having engaged members who know their responsibilities helps a co-op with succession, financial planning, and crisis preparation. This understanding doesn’t come naturally. Co-op boards and managers should create a process for onboarding and engaging co-op members.
For day-to-day advice on onboarding and engaging members as well as managing your co-op, check out our Board Basics workshop.
[i] This case study, including this Pituley’s quote, is taken from Jason Heit, Murray Fulton, and Brett Fairbairn’s book chapter “Autonomy and Identity: Constraints and Possibilities in Western Canada’s Co-operative Retailing System” in Brett Fairbairn and Nora Russell’s book Co-operative Canada: Empowering Communities and Sustainable Businesses.