As we know already, Members/Owners contribute equitably to, and therefore democratically control, the capital of their cooperative. The third cooperative principle explores the ways in which that capital can benefit Owners as investors in the business. Unlike large corporations, with sometimes distant and shadowy shareholders that benefit from excess profit, the Co-op exists solely to serve and operate in the interest of its community of Owners that shop at the store.
As we discussed in the first cooperative principle, an investment in the Co-op is really an investment into the community so that Owners and fellow shoppers can enjoy the benefits that profitability brings. A profitable Co-op means greater selection, more resources for worthy community causes, events, store upgrades, discounts and when applicable, patronage refunds. Patronage refunds are distributed by the Board of Directors in a decision making process that takes place after the conclusion of each fiscal year. The store’s profit is always accounted for and allocated in a way that best serves the health and longevity of the Co-op. If after those decisions are made and there is still excess profit available, the Board can make the decision to pay money to the Owners for their investment.
The Davis Food Co-op will always be run in a democratic way, so any surplus income earned by the Co-op is invested back into the Owner community in an equal and fair way. We encourage all Owners to consider joining and/or voting for the Board of Directors so that they can be more involved with the decisions that are made in regards to profitability of the store. At the end of the day, the better that the Co-op performs financially, the better return on investment that all Owners can receive!
The second cooperative principle dives deeper into a very important aspect of what is presented in the first principle. A cooperatively owned business is truly owned by its members and therefore, it is governed by a democratic decision making process. Owners actively participate in setting policies and making decisions through either electing or joining the Board of Directors. Each Owner has equal voting rights upon joining the cooperative and elected representatives are accountable to the Ownership.
The Davis Food Co-op’s Board of Directors largely focuses on Policy Governance, which helps focus the board’s responsibilities into three areas: setting long term ends (or outcomes) and organizational limits; holding the General Manager accountable for organizational performance within those ends and limits; and creating an active dialogue with Member-Owners about updating the ends of the organization. Ends policies are supposed to answer the overarching questions: what changes, for which people or need, and at what cost?
Each May, Elections for the Davis Food Co-op Board of Directors is held. In order for an Owner to run for an open seat on the Board, they must:
• Be a DFC shareholder in good standing.
• Prepare for, attend, and participate in monthly Board meetings and the Annual Ownership Meeting in May.
• Serve on one or two committees or task forces.
• Attend and participate in a day-long annual retreat in the Fall and/or Spring.
• Participate in Board training, as well as workshops, conferences, and DFC events throughout the year.
• Regularly read and respond to email correspondence.
• Devote time to learning about the co-op movement and the board decision-making tool Policy Governance.
Learn more about our Board of Directors and becoming a DFC Owner.
For many co-ops, a recurring issue that they face is public awareness of what the cooperative model actually entails. We decided to use Co-op Month (October) to dive deeper into the guiding principles that shape all co-ops as well as provide insight into how the Davis Food Co-op has expanded on these principles to best serve the Davis community. More so than with traditional business models, co-ops do everything, from their daily tasks to large scale planning, according to the principles of the cooperative model.
To better understand the importance of the cooperative principles, it is important to understand a brief history of what a co-op actually is. The concept of cooperation started with the earliest human societies sharing all of their resources with one another for survival and began to take more formal shape in the late 18th century as people moved from farms to cities. Labor workers, consumers, farmers and producers banded together to make joint purchases of supplies and services to keep their collective costs lower as they entered into this new way of life. In their efforts to support one another’s new journey into city life, they became a co-op—a business run by the people, for the people.
In the late 1960s and 1970s, the “new wave” of consumer co-ops in the US began. Born out of 1960s counterculture, these stores were opened by idealistic community members that wanted an alternative to the standard capitalism business models. Each co-op had its own set of standards and procedures, dictated by the Members/Owners of the co-op. These co-ops were pioneers in what we know today as the natural foods industry.
The first principle of all cooperative structures that were born out of that era is that they are open for everyone to join regardless of age, race, gender, sexual orientation, economic status, political or religious beliefs and any other discriminatory based qualifications. While Membership (also known as Ownership) is open for everyone, it is not required for shopping at the Davis Food Co-op. The Co-op truly does exist as a community institution that is accessible to everyone. However, Ownership is highly encouraged!
By becoming an Owner of the Davis Food Co-op, you are investing not only in the store, but also in local farmers and artisans that offer sustainably sourced natural foods and products. You are also investing in programs that enrich our community, such as food drives for those in need, that the Co-op actively supports. As a community-owned grocery store, we are accountable to you, the members of our community who support and invest in us. We are committed to supporting the environmental, social, and economic concerns of all of our Owners. Over the next six principles, we will dive a little deeper into what Ownership actually entails and how you can further contribute to your local Co-op!