The Cooperative Movement

Cooperation, economic and otherwise, is a concept which has been around for most of history. People learned ages ago that by working together they can accomplish more than the sum of each individual's efforts. Early cultures recognized the advantage of collective strength and the potential of cooperation by hunting, living, worshipping, cooking and providing shelter together in groups. The history of human economic cooperation is perhaps older than the history of competition. Even before agriculture had become the basis of human economy, cooperation was a necessity.

The modern cooperative movement dates to a group of twenty-eight textile workers who organized the Rochdale Society of Equitable Pioneers. In 1844, these weavers pooled 140 British pounds to open a small dry goods store stocked with oatmeal, sugar, butter and flour. Their effort was rooted in poverty and desperation. The previous year they had been fired and blacklisted by employers after an unsuccessful weavers' strike.

The Rochdale Pioneers incorporated several important features of democratic organization previously tried by earlier cooperatives. Most importantly, they codified their features and rules into what is commonly known as the Rochdale Principles. These principles helped strengthen the organization and formed the basis of a growth-oriented movement. The International Cooperative Alliance revised the principles in 1995 after the 150 birthday of Rochdale. The new document, called the Statement on Cooperative Identity is recognized as the basis of any cooperative.

These principles make several distinctions about cooperation. First, cooperatives are member-owned and -controlled businesses, in which all members have an equal say in the governance of the business: one member, one vote. Co-ops stand in contrast to proprietary ownership, in which one person holds all of the authority, and "traditional" corporate ownership, in which bases control on the size of one's investment. Second, cooperatives serve their members, and not the interests of speculative capital. By establishing limits on the return of investment and on share holdings, cooperatives discourage profit-seeking investments. Instead co-ops encourage local control and investments by the people who use the business. Third, cooperatives help the members actively govern their organization through education and help other cooperatives to better serve their members. This is done through buying goods from other cooperatives and providing development assistance to organizing groups. Finally, cooperatives exist not just for the benefit of the members but to serve, strengthen, and sustain local communities. They are community organizations.

It is of interest to note that the cooperative principles state nothing about member labor or low cost, two common perceptions of cooperatives. While member labor is a method frequently used by smaller cooperatives to keep the costs of operations low (thereby maximizing savings to members), member labor is not a principle or even an overwhelming characteristic of the cooperative movement. Involving membership in the daily operations of the cooperative, however, is another means of fostering cooperative education, participatory democracy, and a sense of community amongst the members.

Similarly, although cooperatives operate at cost and keep their prices as low as possible, many people equate cooperatives with the potential to under-price mainstream competitors. In many cases, it is possible to price below competing businesses, particularly through the use of member labor. However, cooperatives are generally subject to the same market conditions as other businesses, and there is no magic, nor mandate, that cooperatives' prices be lower than that of the competition. In fact, in contemporary markets, national and transnational corporations sell merchandise at incredibly low prices by paying their employees poorly, and/or relying on the lower costs of labor and materials in other countries. Some cooperatives have made a conscious decision to keep prices high enough to pay their employees fairly, provide higher quality goods, offer some additional service, or achieve other social goals.

In housing, most new co-ops are constrained from offering low rates due to the expensive nature of purchasing property. While members may realize some savings due to the co-op's nonprofit nature, or through the use of member labor and group purchasing, most new housing co-ops will operate near market rates. Fortunately, mortgage payments remain relatively constant over the term of the mortgage, and, due to inflation, the co-op becomes lower in cost over time. In the meantime, the co-op members are building equity for themselves and future members.


On a world-wide basis, modern cooperatives have developed for over 200 years. In many countries, such as Sweden and Japan, cooperative businesses figure prominently in their national economies. More importantly, cooperatives exist all over the world providing goods and services which would otherwise be unattainable. In many Third World countries, cooperatives such as credit unions and agricultural organizations have been very successful in helping people provide for themselves where private and other corporate capital do not see high profitability.

In Canada and the US, the roots of the cooperative movement sprang up for similar reasons. Rural electric co-ops, credit unions, and agricultural co-ops were founded to meet the needs of populations, particularly rural, which did not attract investment or where goods and services were provided at unfair prices.

In the early 20th century, cooperatives in these two countries began to see a need for national organizations. In the US, cooperatives organized the Cooperative League of the USA, which later became the National Cooperative Business Association (NCBA). NCBA provides networking, technical assistance, and development assistance. One of NCBA's major contributions has been lobbying at the national level for cooperatives. For instance, it lobbied for legislation which made cooperative incorporation possible and helped pass legislation which formed the National Cooperative Bank in 1978. Today, NCBA remains the premier cross-sectoral link among co-ops in the United States.

Canada enjoys an even stronger network of cooperative support organizations. The Canadian Co-operative Association (CCA), formed from a merger of the Co-operative Union of Canada and the Co-operative College of Canada in 1987, provides educational services to its member cooperatives and sponsors cooperative development in lesser-developed nations. The Co-operative Housing Federation of Canada (CHF) provides technical assistance to developing and established co-ops throughout English-speaking Canada. Canadian cooperatives have also benefited from the support of the Canadian Mortgage and Housing Corporation (CMHC). However, the CMHC has not provided financing for a student cooperative since the early 1970s, and funding for the program has dropped off sharply in recent years. Other sources of financing are available, primarily from within the cooperative movement itself.

The contemporary cooperative movement is strong and diverse. Cooperatives exist all over Canada and the United States. Some of the larger cooperatives have an annual income of several billion dollars. In addition to rural electric co-ops, credit unions, and agricultural co-ops, there are cooperatives to serve almost every need: food co-ops, automotive co-ops, insurance co-ops, housing co-ops, book co-ops... the list goes on.

Student Cooperatives

The beginnings of student cooperatives are unknown, but it is believed that the first student co-ops were bookstores and group houses that began in the late 1800s. The Harvard "Coop" is the best known example of the early bookstores. Recent research by Deborah Altus has documented the existence of women's housing co-ops during this period. These houses, owned and controlled by the university, were established to provide affordable housing for women. They were "cooperative" only in that the members shared responsibilities and ate meals together. Most of the pre-Depression Era student housing cooperatives were university owned and operated.

The Great Depression of the 1930's brought many student cooperatives into existence in both Canada and the United States. This period of economic hardship encouraged people to think in new directions and a wave of new co-ops was started. If one event can be seen as the birthplace of student cooperative movement it was a lecture by an internationally-renown Japanese labor, cooperative, and peace activist, Toyohiko Kagawa. Kagawa spoke at a Student Christian Movement conference in Indianapolis, Indiana. Students from Ann Arbor and Toronto went to this conference and returned home to start student housing cooperatives that thrive even today. Other student activists saw him speak elsewhere and where similarly inspired.

The 1930s also saw the start of other long standing cooperative systems including Berkeley, Austin, Los Angeles, and Eugene. By 1941, about 150 cooperative housing associations had some 10,000 student members. An association was formed called, the North American Students Cooperative League (NASCL), which survived into the 1950s. The Second World War deflated much of the momentum of this period, drafting members for the war. As most of these co-ops were in rented buildings, most of them died during the war. The organizations that survived were usually the ones that had begun to purchase their own buildings.

In the 1950s, new systems in Kingston, Ontario; Oberlin, Ohio; and Lincoln, Nebraska were established. However, McCarthyism did not encourage progressive answers to social problems. No one can tell, with cooperatives or other progressive movements, to what extent the fear and guilt of the McCarthy era damaged the chances for revival and expansion. At any rate, there was little new development of cooperatives during these years.

In the 1960s, the political fervor over the civil rights, free speech, and anti-war movements brought new enthusiasm to student communities around the world. This enthusiasm translated into a keen interest in non-traditional forms of democracy, such as cooperatives. New cooperatives were started in places such as Austin, Texas; St. Paul and Minneapolis, Minnesota; and Providence, Rhode Island, among others.

Throughout the 1970s, former student activists put their ideas into action by creating food and other cooperatives based on the idea of participatory democracy and a healthy life. This activity translated into what is known as the "New Wave" cooperative movement, as opposed to the "old wave" co-ops of the 1930s. Some of these organizations existed on college campuses but most were integrated into communities and served community needs. The New Wave cooperatives, with their emphasis on healthy and organic foods, were the beginning of the contemporary health food movement.

In 1968 at a conference sponsored by the Inter-Cooperative Council at the University of Michigan a proposal was passed to form an organization to meet the growing needs of the student cooperatives in Canada and the United States. Three weeks later, a group gathered in Chicago to organize the North American Students of Cooperation (NASCO), based on the NASCL model of the 30s and 40s. During the 1970s, NASCO was composed not just of student cooperatives but of the new wave co-ops that were popular in youth circles. The contemporary NASCO is composed mainly of student cooperatives and serves as the voice of a strong and future-oriented movement.

In the realm of development, an important change that took place during the late-60s and early-70s was in the area of federal funding provided by the US and Canadian governments. Most of the existing student housing cooperatives took this opportunity to expand rapidly. However, the late-70s and early-80s were the end of this period of fantastic growth. Established cooperatives expanded during this period, but only a few new systems were started. For this reason, in 1987, the Campus Cooperative Development Corporation (CCDC) was founded as the development partner of NASCO. With the vision of a co-op system on every campus, CCDC has advocated for and assisted student groups.

Student cooperatives are considered to be unique in relation to the rest of the cooperative movement in many respects. First, campus cooperatives have higher rates of member turnover than most because of the limited time students attend college. Second, most student cooperatives have a higher degree of member participation --both in governance and operations-- because of the labor responsibilities of membership. Third, student co-ops often serve the social needs of their members more intensely, since they are frequently based upon group houses and/or shared dining groups.

Management Structures

For the day-to-day operations of their organizations, student members have developed a variety of management structures. However, most structures contain the two following types of participation:

A balance between these two aspects should be maintained. If the balance is unstable, the cooperative might close its doors or loose its cooperative identity. Without the member volunteer labor, the housing becomes too expensive, the commitment of the members declines, the member education becomes negligible, and the understanding of member control is insignificant. With member labor, a "sweat equity" investment is developed by all members, learning and control are maintained, and a strong sense of community develops.

Similarly, with long-term management, the cooperative can maintain its properties in good condition and remain financially healthy. Many student cooperatives that lack this continuity and expertise have withered away into nonexistence. Recognizing the need for skills and continuity, some campus cooperatives have also worked to put community and university resource people on the Boards of Directors, to complement the students decision-making abilities and create a link between the organization and the outside world.

Teaming these two aspects enables campus cooperatives to provide on-going housing services at an affordable price. This teaming has proven in the past to be the most successful way to operate a co-op within the given constraints --high student turnover, inexperience, limited financial capacity-- because it is the least expensive management structure and enables students to learn about and invest in the organization in a way they can afford given the limitations of the student lifestyle.

Building Structures

Over the years, the campus housing cooperatives around the continent have built or purchased several different types of facilities designed to meet the particular needs of an individual campus. Four basic types of building styles have been used.

Small Group House. Fifteen to fifty students share a house, which is often an older, converted building. This "group house" usually has shared meals several times per week, often every day. Members contribute about four to six hours of labor per week to the operation of the household. This labor includes preparing meals, cleaning the kitchen and "common areas," collecting rent and paying bills, and possibly office work within the central management structure. Co-ops of this size generally have about five to eight officers responsible for administrative tasks and networking with the central organization or university housing office.

Large Group House , or Small Dorm. In this model, approximately 100 students share one large structure. There are usually shared meals. Some have constructed their own buildings for this model, usually resulting in a structure of about eight to ten "suites" which offer cozy areas in a large building. Most of these large houses are operated quite similarly to the small houses, but it has been observed that houses of this size require more people in administrative positions and may require staff specific to the building; i.e., a building manager, cook, or maintenance personnel.

Small Apartment Building. These buildings are often purchased or built by co-ops that have group houses to give older members more privacy. Some organizations with these types of buildings do require a work contribution, often for grounds maintenance. There are no shared meals and there is generally a "small" feeling to the co-op but with a high degree of privacy. A similar structure is the townhouse complex, organized very successfully as a cooperative in many family-housing situations.

Large Apartment Complex. Students share apartments of two to five bedrooms. This model allows the largest number of students housed per square foot of land, but may lack a sense of cooperation. There are no shared meals. Students are not usually required to contribute labor to the cooperative in this model, although they may organize their apartments as "mini co-ops."

There are many student cooperatives that consist of only one group house, but the majority of students involved with campus cooperatives live in a building that is part of a cooperative system. These co-ops are organized into a central organization governed by a member-elected Board of Directors, which is accountable to the membership. In a system of several group houses, or one with houses and small apartment complexes, Directors are usually sent to the Board as representatives of a building. In high-rise apartment complexes, Directors may be elected at large, or represent a floor of the building.

Movement Organizations

The existence of organizations whose mission is to educate and expand the student cooperative movement has furthered the general interests of student cooperatives. NASCO, CCDC, and NASCO Properties are three movement organizations that have been created the student co-ops in Canada and the US. They have provided a forum to discuss issues affecting member co-ops and an impetus for assisting organizers in building new student co-ops.

North American Students of Cooperation

NASCO's creation in 1968 meant that student cooperatives began working together towards their common interests. NASCO began its work almost immediately on creating tools to develop more cooperatives. Through a strong lobbying effort, student co-ops were able to get the Department of Housing and Urban Development to make loans directly to student co-ops.

As part of its goal to serve active members, NASCO developed educational programs to assist it student co-ops in educating their members. First focusing on regional conferences, NASCO developed a bi-national conference, called the Cooperative Education and Training Institute (CETI) to train co-op members and organizers in the principles and practice of cooperation. Other programs were developed to educate and link NASCO members from around the US and Canada. Today, NASCO keeps the student cooperative movement strong and develops leaders for the future. The services currently include the following:

Campus Cooperative Development Corporation

The late eighties and early nineties brought the development and implementation of a new business plan for NASCO, which called for increased efforts in maintaining the ground which student cooperatives had achieved through enhancing member services. The plan also called for increases in development activity and resulted in the creation of the Campus Cooperative Development Corporation (CCDC).

CCDC was founded in 1987 by NASCO and its member cooperatives. A nonprofit organization dedicated to cooperation among cooperatives, CCDC was created because NASCO found that, due to limited resources, it could not effectively assist co-op organizers. The organization encourages and initiates co-op development on a substantial and continuous basis by providing comprehensive technical assistance to student groups looking to establish co-op housing. CCDC works with student groups on cooperative organizational aspects, legal incorporation, analyzing the feasibility of potential properties, finding appropriate properties, arranging financing, and assisting in the design of the organization.

CCDC is a separate organization with its own membership, which allows for special participation in a development effort that is not perceived as a drain on NASCO's educational efforts. While NASCO and CCDC are different organizations, there are substantial connections between the two. First, the memberships in the two organizations overlap extensively. Second, the organizations consider themselves to be development partners, meaning that they coordinate their efforts. Finally, NASCO, CCDC, and NP all share staff and office space.

As a part of their strategy, in 1988, CCDC and NASCO incorporated another organization, NASCO Properties (NP), which provides ownership and management services for several new cooperatives. NP seeks to combat the problem of student organizers' lack of access to mainstream financial resources. By poising as a reputable national property owner, NP is able purchase a property for local student cooperatives. A more detailed description of NASCO Properties can be found in the "Purchasing Property" chapter.