Health & Fitness
The Value of Cooperatives | Part 2 of 4
Learn about how a co-op could benefit your community.
Co-ops in your Community
As I talked about in my of this series, co-ops are formed by a group of like-minded individuals that come together to form a business that benefits its members, like REI. In this post I will focus on the value of cooperatives in the community.
In short, co-ops benefit a community by:
- Creating jobs within the community
- Supporting local producers and helping them grow
- Keeping money circulating in the community
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Cooperatives are a real boon to the community because the multiplier effect of shopping locally is in, well, full effect. According to Lion Investing: every dollar spent at a locally owned business generates two to four times more economic benefit—measured in income, wealth, jobs, and tax revenue—than a dollar spent at a globally owned business. A co-op creates a ripple effect of benefit that reaches out to the edges of the community and then pulls back bringing everyone closer together weaving a tight-knit community.
Co-ops, by their very nature, incentivize their members to support local businesses, both directly and indirectly. Each member of the co-op has invested in the co-op through the payment of a membership fee and will reap a portion of the earnings in profitable years, so it is in their personal best interest to shop at the co-op as much as possible. As co-op membership rises and sales rise, there will be a greater need for staff, so jobs will be created and wages will stay in the community. On the same note, as sales and profits rise, the earnings returned to patrons or producers rise proportionately and the money returned to members stays in the community ready to recirculate. Co-op members live and work in the community where the co-op is often located and are less likely to leave and are more invested in the community’s future.
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As co-ops grow, local producers benefit as well. By having a consistent place to sell their goods for fair prices with consistent revenue, opportunity is created to grow their businesses selling to other retailers in the community. The cycle goes on and on.