Do you hear a lot about cooperatives? Not sure what they are?

At its most basic, a cooperative is a group of people who work together to meet their common goal. There are about three million cooperatives in the world. They come in a wide variety of categories, depending on the needs of their members, including cooperatives for consumers, workers, housing, finances, health care, and many more. 

You’ll find cooperatives, commonly referred to as “co-ops,” all around us in New Hanover and surrounding counties. You may belong to a grocery or preschool co-op. You may use products from well-known agricultural cooperatives, such as Land O’Lakes and Ocean Spray. You may patronize successful business cooperatives, like Ace Hardware, or get information from The Associated Press, a news cooperative.

The Modern Cooperative Movement
Although many cooperatives were organized during the Industrial Revolution, the modern cooperative movement began in 1844 when the Rochdale Society of Equitable Pioneers, a consumers’ cooperative in England, established seven principles for their organization. These served as the foundation for the principles that cooperatives follow today. 

The standard Cooperative Principles are:

1. Voluntary and Open Membership 
2. Democratic Member Control 
3. Member Economic Participation 
4. Autonomy and Independence 
5. Education, Training, and Information 
6. Cooperation among Cooperatives 
7. Concern for Community 

Credit Unions: Not-for-Profit Financial Cooperatives
One of the most common types of cooperative in the United States is the credit union, a not-for-profit financial cooperative, where members work together to support each other financially.

Credit unions first achieved wide success in Germany in the mid-1800s, and the business model spread across Europe and then came to North America. The first credit union in the United States opened in New Hampshire in 1909. Today, according to World Council of Credit Unions, more than 403 million members belong to more than 82,000 credit unions in 98 countries.

Like other cooperatives, credit unions follow the seven Cooperative Principles. However in 2019, the Credit Union National Association and the National Credit Union Foundation added an eighth principle for credit unions: Diversity, Equity, and Inclusion.

Credit Unions vs. Traditional Banks
Because they follow the Cooperative Principles, credit unions operate quite differently from traditional banks.

One member, one vote: Credit unions are owned and governed by their members, not by outside owners or shareholders. Each member of the credit union gets an equal say in important decisions.

People over profits: Rather than enrich owners or shareholders, credit union profits are returned to members through better rates, lower fees, and member services. Their financial products are designed to benefit people, rather than the institution. For example, last year 392 people without credit were able to receive a loan from Excite Credit Union.

Community-focused: Through financial literary workshops, sponsorships, local events, and partnerships with other nonprofit organizations, credit unions work to improve the lives of people in the local community. In 2023, Excite donated a total of $425,000 to 62 local nonprofit organizations, and it partnered with 50 nonprofit organizations to provide financial literacy training to more than 3,500 people.

Join the Credit Union Movement
Now that you’ve learned more about cooperatives, why not take the next step and experience the credit union difference firsthand? Excite Credit Union invites you to celebrate International Credit Union Day® on October 17, 2024. Each year since 1948, this annual event shines a light on the unique benefits of credit unions and financial cooperatives.

At Excite, we put people over profits—offering great products, personalized service, and a real commitment to the community and your financial well-being. Are you ready to join a movement that works for you? Become an Excite Member today by visiting excitecu.org!