What is a Cooperative?

LCEC was founded by people who laid the groundwork for what has become one of the largest cooperatives in the nation. The story that began three quarters of a century ago was the beginning of many chapters filled with many milestones and the promise of new possibilities. The cooperative was founded not to earn a profit, but to serve members throughout a five-county service territory in Southwest Florida that no other utility wanted to serve. In spite of the pressures of changes confronting the utility industry, LCEC remains true to its homegrown roots of serving its members while building and maintaining the electric system that lit the first member’s light in 1940.

In 1844, long before LCEC was established, a group of small-business people in England founded principles with which to govern cooperative operations. These principles were introduced into in United States in 1874 and formally adopted in 1937. They still hold true for cooperatives today.

  1. Voluntary and Open Membership
    Cooperatives 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.
  2. Democratic Member Control
    Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. The elected representatives are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote) and cooperatives at other levels are organized in a democratic manner.
  3. Members’ Economic Participation
    Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. 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 the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.
  4. Autonomy and Independence
    Cooperatives 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 cooperative autonomy.
  5. Education, Training, and Information
    Cooperatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of cooperation.
  6. Cooperation Among Cooperatives
    Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.
  7. Concern for Community
    While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.

The seven cooperative principles—which form the basis for every cooperative enterprise in the world today―are underpinned by six cooperative values: Self-Help, Self-Responsibility, Democracy, Equality, Equity, and Solidarity. On top of these, the International Cooperative Alliance also separately lists cooperative “ethical values” of Honesty, Openness, Social Responsibility, and Caring for Others.