The United States had not yet been born when, many believe, free-thinking Benjamin Franklin formed the first cooperative in the New World.
Obviously, in 1752, it wasn’t electric, but an insurance cooperative called the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. And, Carpenter’s Hall, the building in which the Continental Congress met in 1774, was insured by the contributionship.
It was the first fire insurance company in America and has been so successful it continues to this day.
The world has changed substantially over the last 240-plus years, but the structure of a cooperative has remained relatively intact. They remain democratically controlled by those who use the service(s) and are designed to benefit their users, or members.
Although Mohave Electric Cooperative is a utility, cooperatives extend into nearly every walk of life.
Consumers use cooperatives for services such as housing, credit and financial services, groceries, education, telecommunications, and, of course, utilities.
Those who have stopped by KFC, Popeye’s, Dunkin’ Donuts, Ace or True Value hardware stores, or even Burger King, have supported a cooperative because these establishments purchase some of the products they sell from cooperatives.
“Cooperatives, or cooperation, is not a new idea,” said Ardie Lauxman, chief financial officer at MEC. “Ben Franklin might get deserved credit for organizing the Philadelphia Contributionship, but the idea itself dates back to the start of civilization.”
Consider that survival of humans depended on what might be considered a modern day cooperative model.
“Many would go on a hunt together and the meat would be divided with all,” Lauxman said. “Having a group work together toward a common goal is more effective than a single individual trying to survive alone.
“Cooperating is among the reasons we are all here today.”
Three primary principles are practiced among cooperatives: user-benefit, user-owner, and user-control.
Members work together to get services that might not otherwise be available.
This was the case with electricity in rural areas. In the 1900s, because existing utilities saw no profit in powering rural America, groups formed to purchase electricity with help from the Rural Electrification Administration.
Working together provides the advantage of bargaining power. Those who may have haggled over the price of a car may understand the general principle. If a car lot is full and a new shipment is anticipated, creating space for the new inventory becomes imperative.
The people who belong to a cooperative, own it. Members own the assets and have the obligation to provide financing to keep a cooperative in business and allow it to grow for the benefit of, and in cooperation among, all members.
Because cooperatives follow a democratic model, members have control through voting at the district and annual meetings. Regardless of how much any one individual has spent in a cooperative, each member has only one vote.
From the time of early humans to Franklin organizing the nation’s first cooperative, the cooperative model continues to grow, and members continue to discover and reap the benefits.
Members vs. customers … that’s the cooperative difference.