There are many cooperatives around us, and yet we sometimes have trouble understanding what sets them apart from other business models. Can you sort out the myths from the facts?
A cooperative’s main goal is to meet the needs of its members
True. Basically, a cooperative is an association of people who have come together voluntarily to meet a common need. For example, Desjardins is a cooperative group made up of caisses that meet members’ financial needs. These members create a force that acts in their interest to help them achieve and maintain their financial independence. That’s why mutual aid and solidarity are key values of the cooperative model.
A cooperative’s mission is to make a profit
False. However, to be viable, any business must be profitable. This is also the case for cooperatives. However, the profitability of a cooperative is not an end in itself, but rather a means to achieve its true objective: to always do what’s best for its members and clients. In cooperatives, annual profits are not called profits but surplus earnings. They are always used to serve the interests of members and clients, either directly or indirectly.
At Desjardins, a portion of its annual profits is used to build up financial reserves to remain financially strong and to ensure the security of members’ savings and the maintenance of services. They also help Desjardins continue to develop its product and service offering to meet members’ needs, which are constantly evolving as quickly as technology.
In addition to increasing its reserves each year, Desjardins chooses to redistribute a portion of the surplus earnings to members in the form of dividends. The amount paid to each member varies according to their use of the services and products of their caisse, including insurance products. Another part of the surplus earnings is returned to members and their communities, particularly through the support of community projects: the community dividend, also known as the Community Development Fund.
Members of a cooperative have democratic rights
True. One of the main foundations of a cooperative is that its members can actively participate in decision making. At Desjardins, members have the opportunity to express their needs and expectations of their affiliated caisse at annual general meetings (AGMs). Each member also has a voting right. In addition to voting on the distribution of surplus earnings (known as dividends), members vote to elect caisse directors. These directors will form the board of directors and represent the members in a number of caisse decisions. They will therefore have various decision-making powers throughout the year, such as selecting projects supported by community dividends.
Learn more about annual general meetings.
It’s important to take part in this annual meeting. Find out all the reasons to attend.
Cooperatives are mainly for low-income people
False. They’re for everyone—and there are many reasons to be part of a cooperative! People who share cooperative values, solidarity and equity will definitely benefit from it. Being part of a cooperative also helps you become familiar with the concepts of democracy and administration, and develop your individual and collective commitment. As a cooperative, Desjardins also does a lot of educating to help its current and future members achieve financial empowerment. In short, no matter what their age or status, there are many advantages to being a member of a cooperative.
A cooperative can be sold
Could be true or false. The answer depends on the law under which a cooperative is founded. What’s for sure is that a financial cooperative in Quebec, like Desjardins, is a collective and inalienable property. That means it can’t be divided or bought. This concept is important because it means that the cooperative’s property will remain here and will never be sold abroad. That’s why at Desjardins, caisses don’t close but merge. It’s only points of service that close due to a lack of foot traffic.
All members participate in the cooperative’s constitution. In a way, it’s a legacy from all the members who have trusted it since its inception. The cooperative is a distinctive force that helps unite to stand the test of time and continue to better meet the needs of its members.