What are co-ops and mutuals?

Consumer or community-owned co-operatives can be an ideal approach for disadvantaged groups where there is the energy, commitment and expertise in the community to tackle problems together.

Co-operatives can facilitate the development of members’ capacity to participate in the broader community by providing enhanced networks, increased confidence and skills.

Consumer co-operatives have a successful track record and offer enormous potential for some of Australia’s most disadvantaged groups to access appropriate care, including Indigenous groups, rural communities, people from culturally and linguistically diverse backgrounds, people with disabilities and older Australians in need of care.

Worker-owned co-operatives provide employees with autonomy and the ability to make judgements as to how to provide the best service at the local level. They free staff to be entrepreneurial and to innovate.

Employee-governed businesses can be effective for those working with people with complex needs, where consistency of personnel is required, and where services are focused on empowerment-based approaches. Staff-based co-operatives can be particularly effective in areas where staff attraction and retention has proven problematic.

Governments throughout Australia are seeking larger, more efficient service organisations with a single point of entry for a wide range of complex social problems. Many smaller, yet highly effective social support organisations may not survive competing against these larger organisations with their economies of scale. This can mean larger organisations replacing smaller local groups that have built relationships with their local community, have local knowledge and specialist experience.

Co-operatives of businesses and not-for-profit organisations, called enterprise co-operatives, can support smaller providers to share corporate functions including bulk purchasing, accounting, human resources, marketing, client software and OH&S services. Enterprise co-operatives assist specialist organisations to increase productivity and market power while retaining local input and local jobs.

Multi-stakeholder co-operatives are co-ops that formally allow for governance by representatives of two or more “stakeholder” groups within the same organisation, including consumers, producers, workers, volunteers or general community supporters.

This can help align the interests of otherwise competing stakeholders – producers and consumers, for example. They are appropriate when there is a need to plan long-term for the needs of various stakeholders and the normal market relationship is leading to inefficient short-term investment horizons.

Having only gained traction in the 1990s, multi-stakeholder co-ops are one of the newest models of co-operative.

A mutual is a member-owned organisation where people come together to meet their shared needs. The members of a mutual are its customers who do not usually contribute to the capital of the organisation through direct investment. Instead, they support the mutual through using its services.

A mutual is a co-operative when each member has one vote and the organisation is guided by the seven co-operative principles.

Defining Mutuality explains what co-ops and mutuals are and how they fit together as a unified sector.