About Co-ops

Experience the Cooperative Difference

Welcome to the dynamic world of cooperatives, a great American tradition that continues to thrive in Iowa today. Nearly 1.4 million people in Iowa are members of at least one cooperative, and many belong to more than one.

There are plenty of good reasons why Iowans support a variety of cooperatives. Here are some answers to some common questions about cooperatives and their unique role:

Q: What makes a cooperative different from other businesses?

A: While cooperatives resemble other businesses and are usually incorporated under state law, cooperatives have two unique characteristics. First, they are owned and controlled by the people who use their services, rather than outside investors. These member-owners elect the cooperative’s board of directors, who set policy and oversee the business. Second, members share in the cooperative’s earnings. The cooperative’s benefits (including services received and earnings allocations) are distributed to the member-owners on the basis of how much they use the cooperative. As member-owned businesses, cooperatives operate for the benefit of their members, rather than earning profits for investors.

Q: What benefits do cooperatives provide?

A: Cooperatives allow people to work together to meet challenges and solve problems that are too big for them to overcome as individuals. Cooperatives are organized to improve members’ bargaining power, reduce costs, obtain products or services that might otherwise be unavailable, expand new and existing market opportunities, develop priorities for effective political action, and maximize members’ income potential.

Q: Are cooperatives just for farmers?

A: While cooperatives are often identified with agriculture, the cooperative business structure provides solutions for many industries, including financial services (including credit unions), insurance, credit, health care, housing, independent grocers, hardware retailers, telecommunications, transportation and more.

Q: Are cooperatives like non-profits?

A: Sometimes people confuse cooperatives with non-profit associations. Clear distinctions exist, however, between non-profit groups and businesses. Non-profit laws and tax issues are designed for charitable and civic organizations, but they are not appropriate for business ventures. Operating as a non-profit, for example, keeps members from sharing in the earnings of the business. In a cooperative, however, earnings are returned to patrons based on the basis of use.

Did You Know:
  • Co-ops provide almost 11,000 Iowans with stable jobs that often provide benefits, including healthcare, a defined benefit program, 401(k) plans with employer matches, term life insurance, paid time off, continued education incentives, and wellness plans. If cooperative employees were grouped together, cooperatives would be one of the top 10 largest employers in Iowa.
  • Co-ops play a tremendous amount of property taxes that help support their local communities. Between grain and farm supply, petroleum, telephone, and rural electric cooperatives, approximately $41 million is paid in property taxes to Iowa communities.
  • The Iowa Institute for Cooperatives, which offers a variety of educational resources, training programs and more, has been lighting the way for Iowa cooperatives since 1951.

Have more cooperative questions? Contact us!