How to measure the success of cooperatives beyond the economy

The purpose behind a cooperative is not to obtain the maximum economic profit, as usually occurs in a conventional company, but rather to meet the needs of its members using a collective business structure with democratic management. 

Requirements that constitute a cooperative 

For this reason, the success of a cooperative cannot be measured using the same parameters as for a traditional company. Although a cooperative might obtain good economic results, it will be considered to be a failure if it does not respect the seven cooperative principles: 

1. Voluntary and open membership: Cooperatives are voluntary organisations, open to any person willing to use their services and accept the responsibilities of the membership, without any discrimination due to reasons of gender, social class, race, ideology or religion. 

2. Democratic management by the members: Cooperatives are controlled by their members, who take an active part in the decision-making process and in the designing of the organisational policies, based on the principle of “one person, one vote.” 

3. Economic participation of the members: The members contribute equally to the cooperative’s capital. The profits are used for the development of the cooperative, for providing proportional returns to the members or for supporting activities that have been collectively agreed upon. 

4. Autonomy and independence: Cooperatives are autonomous organisations. Any agreement with external entities (such as governments or investors) must guarantee the members’ democratic control. 

5. Education, training and information: The training of members, executives and workers is promoted in order that they may efficiently contribute to the cooperative’s development. 

6. Cooperation amongst cooperatives: They work together locally, nationally and internationally, strengthening the cooperative movement and extending its impact. 

7. Commitment to the community: Cooperatives seek the sustainable development of their communities through policies and actions that benefit their surroundings. 

Measuring the success of cooperatives 

In addition to fulfilling these principles, cooperatives must be able to adequately attend to the needs of their members. To do this, there are several indicators that allow their success to be evaluated: 

• Economic sustainability: Long-term financial viability is essential. The capacity for self-financing, reinvestment of surplus, growth of assets or diversification of income sources are all valued. 

• Participation and democratic governance: The degree of involvement of the members in the life of the cooperative, their attendance of assemblies, the active exercising of their vote and their knowledge of the cooperative values are all essential aspects. 

• Social impact: It is measured by the generation of stable, quality employment, the inclusion of vulnerable groups (young people, the elderly, women, migrants…), affordable access to essential goods or services and the contribution to the local development.