Solidarity cooperative

A solidarity cooperative is a place-based multi-stakeholder cooperative bringing together all stakeholder membership categories around a shared neighborhood vision. These can include workers, customers, tenants, patrons, and members of the larger community.

As far as defining what a cooperative is, a cooperative enthusiast would probably say that ANY organization that is committed to and practices cooperative principles is a cooperative. A corporate lawyer would say that a cooperative must be formed under a cooperative statute. A tax lawyer would say it doesn’t matter what statute it’s formed under as long as it “operates cooperatively” as that term is defined in tax law.

What is a solidarity cooperative and does it compare to others?

We are using the solidarity cooperative model, where ownership is shared between customers, tenants and workers under a shared vision. Here’s how it compares to other cooperative models. Solidarity cooperative - Ownership is shared between customers, tenants and workers, often with distinct membership categories. Producer cooperative - Allows its members to cooperatively market and sell products, most commonly found in the agriculture industry (30% of total agricultural production is marketed by co-ops.) Purchasing cooperative - Groups of businesses that wish to jointly purchase services or supplies, allowing them to compete with national chains. Consumer cooperative - Organized by consumers who want to achieve better prices or quality in the goods or services they purchase. Worker cooperative - A company owned by its employees, and its purpose is to provide employment for the members. Housing cooperative - One or more residential buildings owned by a corporation that is membership-based, with each member granted the right to occupy one housing unit.

Cooperative Principles

The basic (non-legal) cooperative principles according to the International Cooperative Alliance are:

1. Voluntary and open membership: Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political, or religious discrimination.
2. Democratic member control: Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote), and cooperatives at other levels are also organized in a democratic manner.
3. Member economic participation: Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.
4. Autonomy and independence: Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.
5. Education, training, and information: Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their cooperatives. They inform the general public—particularly young people and opinion leaders—about the nature and benefits of co-operation.
6. Co-operation among cooperatives: Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional, and international structures.
7. Concern for community: Cooperatives work for the sustainable development of their communities through policies approved by their members.

Societal Benefits

The Societal Benefits of Cooperative Ownership
Extractive (Institutional) Ownership	Generative (Cooperative) Ownership
Financial Purpose: Maximizing profits in the short term	Living Purpose: Creating the conditions for life over long term
Absentee Membership: Ownership disconnected from life of enterprise	Rooted Membership: Ownership in human hands
Governance by Markets: Control by capital markets on autopilot	Living Purpose: Creating the conditions for life over long term
Institutional Finance: Capital as master	Community Finance: Capital as friend
Commodity Networks: Trading focused solely on price and profits	Ethical Networks: Collective support for ecologial and social norms

Adapted from Owning Our Future: The Emerging Ownership Revolution, by Marjorie Kelly

Personal Benefits

The Personal Benefits of Cooperative Ownership
Finance-As-Partner Ownership	Cooperative- As-Partner Ownership
Financial Partners: Partners based on who has money	Purpose Partners: Partners based on who shares purpose
Personal Risk: Revenue responsibility held solely by partners	Shared Risk: Revenue responsibility shared by community
Limited Support: Assistance limited to financial partner network	Extended Support: Assistance extended to cooperative community
Fragile Ownership: Partner’s project interest can change overnight	Resilient Ownership: Shared accountability in maintaining core mission
Limited Equity Growth: Limited by growth capacity of financial partners	Robust Equity Growth: Accelerated by increase in community value

Adapted from Owning Our Future: The Emerging Ownership Revolution, by Marjorie Kelly