Cooperatives Provide Valuable Lessons for Young Entrepreneurs

AMES, Iowa -- Some people see cooperatives as the way electricity gets to their rural home, or how local crops get from grain bins to the market, or the way to buy fresh, locally grown foods. Some people call cooperatives a business model, but college students and graduates who have had experiences with cooperatives see them as a way to gain valuable work experiences, scholarships and the means to addressing community needs.

Members benefit

Mingwei Huang, Director of Education and Training at North American Students of Cooperation (NASCO), lived in a housing co-op as a student at the University of Wisconsin-Madison. The housing co-op was not only a beneficial living situation, it was also an educational experience.

“My co-op was in the heart of campus, but was not entirely a student co-op,” Huang said. “In fact, it was about half student and half community and workers. This was very grounding for me since it's easy for students to live in a bubble. I learned a lot and developed many great relationships while living with so many great, interesting people.”

In fact, skills like basic budgeting, communication, handling conflict, minor maintenance and accountability were skills she learned while living in the housing co-op that remain valuable to her today.

Member ownership and control

A housing co-op is significantly different from an apartment building, rental house or sorority or fraternity. As a member-owner, each resident contributes to the house labor and has a say in how it’s run and managed. Huang used her time in a housing co-op to become involved on its board as vice president and in member education. These responsibilities gave her leadership experience, in addition to teaching her about collaboration, democracy and accountability.

“In our society, we are taught to think and act independently or in our own interests,” she said. “We tend to organize our relations with others as sole independent people rather than interdependent groups and networks.”

The ability for any cooperative to succeed depends on a collective effort, which Huang says is accomplished through healthy communication and navigation of power dynamics. These skills can carry over into the personal and professional realms.

Huang’s experience with her housing co-op demonstrate three principles that are widely recognized and practiced by cooperatives: member benefits, member ownership and member control. According to, an educational partnership of 74 land-grant universities, these principles distinguish a cooperative from other kinds of businesses. The member-benefits principle is carried out when members unite to produce services otherwise not available, gain access to markets, or other mutually beneficial reasons. The member-owner principle is simple; members own the cooperative and have the financial and operational obligations and rewards of an owner. The member-control principle is exercised when members vote at membership meetings and serve on the board of directors.

Jesse Martin applies cooperative principles to the daily operations of Martin’s Native Lumber of Dayton, Va., even though the business is a private, fourth-generation, family-owned business.

Communicating through one-on-one employee meetings and offering profit-sharing retirement portfolios are two practices Martin applies that reflect the cooperative business model.

“Cooperative education has allowed me to consider the world of business with a far more open mind,” Martin said. “Often, I approach items in my own business with principles learned through the co-op education programs. I have found that if we think of our customers as owners and having a vested interest in our company, that we provide higher quality service.”

Martin became involved with cooperatives after attending a conference during college and later becoming selected as the National Institute of Cooperative Education’s chairman. The National Institute on Cooperative Education (NICE) is a youth scholar program that provides educational and social activities. The goals of the institute include increasing the understanding of basic cooperative principles, the challenges faced by cooperatives and the opportunities provided by cooperatives. 

Expanding cooperative education

A leadership team made up of university faculty and researchers has created the eXtension Cooperative Community of Practice to increase the visibility of the cooperative business model with information they contribute to the website.

Leah Henkes, an Iowa State University senior in dairy science, contributed to the development of the cooperatives on eXtension website during her initial involvement with cooperatives.

“I think it is extremely beneficial for young people to learn about the cooperative business model because it gives them the chance to help network their abilities and resources,” Henkes said. “By working with others to accomplish a goal it is easier to reach that goal.”

Three Iowa State University students from Ron Deiter’s Cooperatives class had the opportunity to attend the 2011 College Conference on Cooperatives (CCOC), a three-day program offered by the National Farmers Union (NFU) and the cooperative community of the upper Midwest on Feb. 19-21. The conference helps college students gain a more thorough understanding of cooperatives and the career opportunities available. It exposes attendees to the many areas of the economy stimulated by cooperatives – beyond agriculture.

Students wanting to be more engaged with local cooperatives, thinking of starting a cooperative, or wanting a better understanding of the responsibilities of a board member, can explore the resources available at the eXtension Cooperatives Community of Practice website. Leadership programs, local job opportunities, scholarships and careers offered by cooperatives are featured on the site. 


Photo (127 KB): CAPTION - Iowa's delegation to the 2011 College Conference on Coopertives(l to r) Austin Merical, Ashley Loes, Lynn Heuss, Cody Newgard, Zijun Lan and John Kennedy.


Cooperatives from Iowa State University Extension on Vimeo.