The Rochdale Principles are a set of ideals for the operation of cooperative

Cooperative

A cooperative is a business organization owned and operated by a group of individuals for their mutual benefit...

s. They were first set out by the Rochdale Society of Equitable Pioneers

Rochdale Pioneers

The Rochdale Society of Equitable Pioneers, founded in 1844, was an early consumer co-operative, and the first to pay a patronage dividend, forming the basis for the modern co-operative movement....

 in Rochdale

Rochdale

Rochdale is a large market town in Greater Manchester, England. It lies amongst the foothills of the Pennines on the River Roch, north-northwest of Oldham, and north-northeast of the city of Manchester. Rochdale is surrounded by several smaller settlements which together form the Metropolitan...

, England

England

England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...

, in 1844, and have formed the basis for the principles on which co-operatives around the world

World

World is a common name for the whole of human civilization, specifically human experience, history, or the human condition in general, worldwide, i.e. anywhere on Earth....

 operate to this day. The implications of the Rochdale Principles are a focus of study in co-operative economics

Co-operative economics

Co-operative economics is a field of economics, socialist economics, co-operative studies, and political economy, which is concerned with co-operatives.-History:...

. The original Rochdale Principles were officially adopted by the International Co-operative Alliance

International Co-operative Alliance

The International Co-operative Alliance is a non-governmental co-operative federation or, more precisely, a co-operative union representing co-operatives and the co-operative movement worldwide. It was founded in 1895. The ICA maintains the internationally recognised definition of a co-operative...

 (ICA) in 1937 as the Rochdale Principles of Co-operation. Updated versions of the principles were adopted by the ICA in 1966 as the Co-operative Principles and in 1995 as part of the Statement on the Co-operative Identity

Statement on the Co-operative Identity

The Statement on the Co-operative Identity, promulgated by the International Co-operative Alliance , defines and guides co-operatives worldwide. It contains the definition of a co-operative as a special form of organization, the values of co-operatives, and the currently accepted cooperative...

.

Current ICA

International Co-operative Alliance

The International Co-operative Alliance is a non-governmental co-operative federation or, more precisely, a co-operative union representing co-operatives and the co-operative movement worldwide. It was founded in 1895. The ICA maintains the internationally recognised definition of a co-operative...

 version of co-operative principles

The Rochdale Principles according to the 1995 ICA revision are detailed below.

NOTE: The subcategories listed below are of an editorial nature, in that they are an explanation of the author's understanding of these principles. They are not expounded upon in that much detail in the actual ICA principles. See: http://www.ica.coop/coop/principles.html .

Voluntary and open membership

The first of the Rochdale Principles states that co-operative societies must have an open and voluntary membership. According to the ICA's Statement on the Co-operative Identity, "Co-operatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination."

Anti-discrimination

To discriminate socially is to make a distinction

Distinction (social)

Distinction is a social force that places different values on different individuals. The criteria for such judgements have always been a matter of controversy and subject to criticism. They are, furthermore, subject to constant change....

 between people

People

People is a plurality of human beings or other beings possessing enough qualities constituting personhood. It has two usages:* as the plural of person or a group of people People is a plurality of human beings or other beings possessing enough qualities constituting personhood. It has two usages:*...

 on the basis of class

Social class

Social classes are economic or cultural arrangements of groups in society. Class is an essential object of analysis for sociologists, political scientists, economists, anthropologists and social historians. In the social sciences, social class is often discussed in terms of 'social stratification'...

 or category

Categorization

Categorization is the process in which ideas and objects are recognized, differentiated and understood. Categorization implies that objects are grouped into categories, usually for some specific purpose. Ideally, a category illuminates a relationship between the subjects and objects of knowledge...

. Examples of social discrimination include racial

Racism

Racism is the belief that inherent different traits in human racial groups justify discrimination. In the modern English language, the term "racism" is used predominantly as a pejorative epithet. It is applied especially to the practice or advocacy of racial discrimination of a pernicious nature...

, religious

Religious discrimination

Religious discrimination is valuing or treating a person or group differently because of what they do or do not believe.A concept like that of 'religious discrimination' is necessary to take into account ambiguities of the term religious persecution. The infamous cases in which people have been...

, sexual

Sexism

Sexism, also known as gender discrimination or sex discrimination, is the application of the belief or attitude that there are characteristics implicit to one's gender that indirectly affect one's abilities in unrelated areas...

, sexual orientation

Sexual orientation

Sexual orientation describes a pattern of emotional, romantic, or sexual attractions to the opposite sex, the same sex, both, or neither, and the genders that accompany them. By the convention of organized researchers, these attractions are subsumed under heterosexuality, homosexuality,...

, disability

Disability discrimination act

In the late 20th and early 21st centuries, a number of countries have passed laws aimed at reducing discrimination against people with disabilities. These laws have begun to appear as the notion of civil rights has become more influential globally, and follow other forms of anti-discrimination and...

, and ethnic discrimination. To fulfil the first Rochdale Principle, a Co-operative society should not prevent anyone willing to participate from doing so on any of these grounds.
However, this does not prohibit the co-operative from setting ground rules for membership, such as residing in a specific geographic area or payment of a membership fee to join, so long as all persons meeting such criteria are able to participate if they so choose.

Motivations and rewards

Given the voluntary nature of co-operatives, it requires a motivation to encourage people to participate. Each person's motivations will be unique, and will vary from one co-operative to another, but will often be a combination of the following:

• Financial - Some co-operatives are able to provide members with financial benefits.
• Quality of life – serving the community through a co-operative because doing service makes one's own life better - is perhaps the most significant motivation for volunteering. Included here would be the benefits people get from being with other people, staying active, and above all having a sense of the value of ourselves in society that may not be as clear in other areas of life.
• Giving Back – many people have in some way benefited from the work of a co-operative, or more generally, and volunteer to give back.
• Altruism – volunteering for the benefit of others.
• A sense of duty – some see participation in community as a responsibility that comes with citizenship – in this case they may not describe themselves as volunteers
• Career Experience - Volunteering offers experiences that can add to career prospects.

Democratic member control

The second of the Rochdale Principles states that co-operative societies must have democratic member control. According to the ICA's Statement on the Co-operative Identity, “Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organised in a democratic manner.”

Member economic participation

Member economic participation is one of the defining features of co-operative societies, and constitutes the third Rochdale Principle in the ICA's Statement on the Co-operative Identity. According to the ICA, co-operatives are enterprises in which “Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.” This principle, in turn, can be broken down into a number of constituent parts.

Democratic control

The first part of this principle states that “Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative.” This enshrines democratic control

Democracy

Democracy is generally defined as a form of government in which all adult citizens have an equal say in the decisions that affect their lives. Ideally, this includes equal participation in the proposal, development and passage of legislation into law...

 over the co-operative, and how its capital is used.

Limitations on member compensation and appropriate use of surpluses

The second part of the principle deals with how members are compensated for funds invested in a Co-operative, and how surpluses should be used. Unlike for profit corporations, co-operatives are a form of social enterprise

Social enterprise

A social enterprise is an organization that applies business strategies to achieving philanthropic goals. Social enterprises can be structured as a for-profit or non-profit....

. Given this, there are at least three purposes for which surplus funds can be used, or distributed, by a Co-operative.

• “Members usually receive limited compensation, if any, on capital subscribed as a condition of membership.”
• “Developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible;” in other words, the surplus can be reinvested in the co-operative.
• Benefiting members in proportion to their transactions with the co-operative;” for example, a Consumers' Co-operative may decide to pay dividend
  Dividend
  Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...
  
  s based on purchases (or a 'divvi').
• “Supporting other activities approved by the membership.”

Autonomy and independence

The fourth of the Rochdale Principles states that co-operative societies must be autonomous and independent. According to the ICA's Statement on the Co-operative Identity, “Co-operatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.”

Education, training, and information

The fifth of the Rochdale Principles states that co-operative societies must provide education and training to their members and the public. According to the ICA's Statement on the Co-operative Identity, “Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public – particularly young people and opinion leaders – about the nature and benefits of co-operation.”

Cooperation among cooperatives

The sixth of the Rochdale Principles states that co-operatives cooperate with each other. According to the ICA's Statement on the Co-operative Identity, “Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.”

Concern for community

The seventh of the Rochdale Principles states that co-operative societies must have concern for their communities. According to the ICA's Statement on the Co-operative Identity, “Co-operatives work for the sustainable development of their communities through policies approved by their members.”

Original version (adopted 1937)

1. Open membership.
2. Democratic control (one person, one vote).
3. Distribution of surplus in proportion to trade
   Trade
   Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...
   
   .
4. Payment of limited interest on capital
   Ownership equity
   In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid. If liability exceeds assets, negative equity exists...
   
   .
5. Political and religious neutrality.
6. Cash trading (no credit extended).
7. Promotion of education.

ICA

International Co-operative Alliance

The International Co-operative Alliance is a non-governmental co-operative federation or, more precisely, a co-operative union representing co-operatives and the co-operative movement worldwide. It was founded in 1895. The ICA maintains the internationally recognised definition of a co-operative...

 revision (1966)

1. Open, voluntary membership.
2. Democratic governance.
3. Limited return on equity
   Ownership equity
   In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid. If liability exceeds assets, negative equity exists...
   
   .
4. Surplus belongs to members.
5. Education of members and public in cooperative principles.
6. Cooperation between cooperatives.
7. Concern for community

See also

• Rochdale College
  Rochdale College
  Opened in 1968, Rochdale College was an experiment in student-run alternative education and co-operative living in Toronto, Canada. It provided space for 840 residents in a co-operative living space. It was also a free university where students and teachers would live together and share knowledge...
  
   (a Canadian experiment in Rochdale principles)
• Rochdale, Queens
  Rochdale, Queens
  Rochdale is a neighborhood in the southeastern corner of the borough of Queens in New York City. Located in Community Board 12, Rochdale, along with other neighborhood areas are grouped as part of Greater Jamaica, corresponding to the former Town of Jamaica...
  
  , a cooperative housing project in New York.

External links

• The International Co-operative Alliance
• Statement on the Co-operative Identity
• Revi=158 Cooperative Principles Then and Now

Article for lay audience, tracing the early history of the Rochdale Pioneers and the Rochdale Principles.

• Principles of the International Co-operative Alliance
• A variant of the 1966 principles from Circle Pines Center