Cooperatives Provide Value, Community

Making an honest profit is a good thing. The U.S. economy thrives on a healthy profit incentive. But every healthy economy also needs a cooperative movement--people coming together to strike a good deal for good products, with no obligation to shareholders or to a profit-driven board of directors.

American cooperatives serve 120 million people, according to the National Cooperative Business Association (NCBA). If you're one of them, you may know that a co-op can be more than a place where you can get a good deal. It can be a place where you belong.

Farewell to dormland

Adrien Vlach noticed the cooperative difference when he moved from a cheap apartment near the University of Kansas into a housing co-op near campus in Lawrence, Kan.

For starters, the accommodations left area apartments and dorms in the dust. "I got to stay in a beautiful Victorian home on a double-wide lot. We grew the most fantastic garden I've ever seen," Vlach says. "We even had a greenhouse. You don't get home-grown organic vegetables in most dorms."

Vlach says he spent considerably less money than he would have living at a dorm with a university cafeteria plan. But even better was the spirit of community at the co-op. Although Vlach left the co-op 10 years ago and now lives in Michigan, he still has good friends from his first co-op experience.

Vlach and his housemates put in three to five hours a week maintaining the co-op. He did routine repair work, some cooking and cleaning, and in his second and third years he learned a valuable skill by keeping the house's books and helping to manage the co-op.

Learning skills for life

After his college experience, Vlach parlayed his experience by volunteering with Habitat for Humanity, then to a variety of executive and board positions for student co-op organizations. He's currently executive director of the Michigan State University Student (MSU) Housing Cooperative, East Lansing, Mich.

The MSU co-op owns 13 East Lansing houses, 12 of which are close to the MSU campus and one that serves the Cooley Law School and Lansing Community College area. Vlach sees the same community spirit there and the same emerging talent among the co-op's student leaders.

Vlach estimates the cost of a typical MSU dorm and cafeteria plan at $756 per month, compared with $445 per month to live in a student housing co-op house. This cost includes utilities, and such amenities as high-speed Internet and cable TV.

Students can save even more at universities located on very expensive real estate, such as San Francisco's University of California-Berkeley, according to an article on the co-op's Web site.

For a state-by-state guide to available student co-ops, visit the North American Students of Cooperation (NASCO) site.

Credit unions offer better rates

A student housing co-op is an example of a consumer cooperative--the people who buy the services own it. In addition to housing, consumers create co-ops to provide electricity, telecommunications, financial services, health care, and many other commodities and services.

Businesses, employees, and even local and state government form different types of co-ops, in general to combine their purchasing power.

What all cooperatives have in common are a set of principles, recognized worldwide, that emphasize democratic control--one member, one vote--and a commitment to education and training of members.

Most American consumers, for example, could use some education about financial management. Credit unions are an excellent source of financial products and good service, says Clark Howard, author of "Get Clark Smart: The Ultimate Guide to Getting Rich From America's Money-Saving Expert," and host of a nationally syndicated radio talk show. Howard touts credit unions as a consumer-friendly source of good rates on loans and deposits. You're able to read this article, for example, because the people at your credit union believe in the value of member financial education.

Getting your hands on the good stuff

If it's difficult getting your hands on organic, healthy foods at a decent price at your grocery store consider looking for a local food-buying cooperative--or "buying club"--to join, or start one yourself.

Co-op and club members share responsibilities for ordering, sorting, and distributing food from local farms, cooperative warehouses, or retail warehouses.

Bring a hands-on attitude to these clubs. Learn from working with local farms and distributors--and from other club members--what it takes to produce and process good, reliable vegetables, fruit, produce, meat, dairy, and herbal products. Exchange ideas and recipes.

See the sidebar for online advice about how to find or start a club.

Hanover Co-op: A great store and a great citizen

Some buying clubs have evolved into full-scale retail food co-ops. The Hanover Co-op started one Great Depression winter, when a group of New Hampshire families went together on a bulk purchase of citrus fruit from Florida.

Many of the food co-ops thriving today started that way, says Allan Reetz, communications director of the Hanover Consumer Cooperative Society, which operates two full-service grocery stores (one in nearby Lebanon, N.H.), a gas/service station, and a convenience store.

Despite its mostly rural hometown of about 9,000 people, Hanover Co-op has 16,000 active members, 300 employees, and revenues of $60 million in the most recent fiscal year.

Members of Hanover Co-op pay a one-time $50 fee, which buys them 10 $5 stock certificates. Members pay the same price at the register as nonmembers. However, Co-op revenues not used for operating expenses and improvements are paid back to members as a "patronage refund," a percentage of their total annual purchases.

Reetz says many members contribute their patronage refunds to the Hanover Consumer Cooperative Fund, a charitable endowment the co-op runs.

Saving money, after all, isn't why so many people remain Hanover Co-op members. The more important benefit, Reetz says, is the bond created by two things: Hanover's partnership with local producers to offer fresh, top-quality products; and the co-op's commitment to teaching members about the products they buy.

"As a consumer co-op, based upon the needs of members, we believe in educating our consumers. We have a registered dietitian on staff who writes the most popular articles in our newsletter," Reetz says. The co-op also conducts classes and demonstrations by the chefs and local home cooks.

Supporting local farmers

Over the past 10 years, Hanover Co-op has strengthened its partnership with local farmers. Before each planting season, Hanover buyers and farmers agree on who will grow what for the co-op in the coming year.

Everyone wins. Hanover is not-for-profit, so it can pay farmers more for their goods than chain food stores can. Farmers who once competed with one another cooperate. Reetz says this makes it easier for each farmer to have a sustainable mix of crops, which protects their businesses from losing everything if one product fails.

"I've had farmers say to me, 'I wouldn't be in business anymore if it wasn't for the co-op,' " Reetz says. "The whole local agricultural picture has changed, not only the business relationship, but this wonderful bond with farmers."

Published April 23, 2007