Nonprofits and Cooperatives By: Cynthia Reifsteck, Andy Reetz, Michael Elmendorf, Mallory Mittan and Meaghan Henderson
Definition and General Characteristics Cooperative: A business organization owned and operated by a group of individuals for their mutual benefit. A cooperative business, or co- op business, uses an integrated business structure with members of the co-op sharing decision-making authority, profits, and liability for debts. Nonprofit Organization: Institution that functions much like a business, but does not operate for the purpose of generating profit. Which means that Nonprofits can't distribute money to shareholders. The funds of a nonprofit must stay in the corporate accounts, they can only be used for salaries, expenses and activities of the nonprofit.
T ypes Cooperatives: • Consumer Cooperative: retail outlets owned and operated by consumers • Service cooperatives: provide a service rather than a good • Producer cooperatives: Agricultural marketing that helps members sell their products Nonprofits: • Professional Organization: Nonprofit that works to improve the image, working conditions,and skill levels of people in particular occupations • Business association: Promotes the collective business interests of a city, state or other geographical area or of a group of similar businesses • T rade Association: Promotes the interests of particular industries • Labor Unions: An organized group of workers whose aim is to improve working conditions, hours, wages, and fringe benefits
Advantages Cooperatives: • Pay lower stabilized prices for products • Shared Ownership/Shared risk • Reduced expenses for operational costs Nonprofits: • Benefit society • Exempt from income taxes • Operate with partial government support (could be an advantage or disadvantage)
Disadvantages Cooperatives: • Longer decision making process • Participation of all members required for success • Extensive record keeping is necessary • Less incentive to invest additionally Nonprofits: • Have to pay fees to apply for tax exempt (expensive fees, especially for small nonprofits) • Hiring staff • T akes a lot of your time and energy
Examples Nonprofits: • The Miracle Foundation • The Austin Zoo • YMCA • Make-a-Wish Foundation Cooperatives: • Ace Hardware • National Cooperative Bank • Land O' Lakes • Dairy Farmers of America
Statement Nonprofit Organization: We would choose to have a nonprofit organization because they help people in a community. Cooperative: We would run a cooperative because everyone whose a part of it benefits.
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