Got A Problem?

Chances Are There's a Co-op Solution

by Adam Schwartz, Contributing Writer

Back in the early 1930s, our nation�s rural areas had a problem. They did not have access to electricity, so a group of neighbors and friends set out to form a cooperative solution. At the same time, folks in 1,000 other rural communities throughout the United States were doing the same thing, creating rural electric cooperatives. Interestingly, folks in urban areas also formed co-ops ― not electric or farm co-ops, but credit unions and housing co-ops. 

Cooperatives of all forms get started when the �market� fails to offer a good or service or does so at prices few people can afford. So, back in the time of the Great Depression, when banks did not have much interest in extending credit to people of modest means, people got together with their friends and neighbors, collected a $5 membership fee (and remember in the 1930s, five bucks was real money) and formed more than 23,000 credit unions. They solved their problem with a cooperative solution. Today, mostly due to mergers between credit unions, there are about 6,800 credit unions with nearly 100 million members.

Meanwhile, in New York City, folks needed to find safe and affordable housing. So, what was the answer? Form a housing co-op. And they did by the hundreds. Today, there are more than 3,000 housing co-ops nationwide. While most are located in urban areas, they are a growing solution in rural areas, and a number of mobile home parks are being converted to cooperative ownership.

Is reliable child care a concern? There are more than 1,000 pre-school cooperatives operating in the U.S. While some require parents to volunteer a certain number of hours per month, these cooperatives have been a great solution for the vast majority of families when both parents need to work outside the home.

On the other end of the spectrum, there are even co-ops covering funeral needs. By joining the co-op, which has pre-negotiated the price of the funeral based on your preferences, consumers can save up to 40 percent off the average cost of a funeral and burial. From cradle to grave, co-ops have you covered.

Perhaps you own a small business and are looking to lower the cost of the goods you sell, or maybe you are one of 50,000 small-business owners who is a member of a purchasing cooperative. Through cooperatives, small locally owned businesses are able to compete against larger retailers like Walmart and Home Depot. Dollars that are spent locally stay in the community six times longer than dollars spent at stores owned outside the community, according to the U.S. Small Business Administration.

So, what do all these businesses have in common? Local people coming together to solve a problem with a cooperative solution. One of the reasons co-ops are popular in so many different industries is that they answer the question, �What�s in it for me?� and provide a solution that also serves we, the community. So the next time your area is facing a problem, think cooperatively and chances are, there will be a cooperative solution.

Adam Schwartz is the founder of The Cooperative Way, a consulting firm that helps co-ops succeed. He is an author, speaker and member-owner of the CDS Consulting Co-op. You can follow him on Twitter @adamcooperative.