This is the third of seven blogs detailing the principles that form the foundations for how co-operatives across the world operate. This week we take a brief look at Principle Three: Member Economic Participation. You may find it useful to read our previous blog about the history of the co-operative movement and the Rochdale Pioneers.
The dividend, part of the driving force behind Principle Three is credited to Charles Howarth, one of the original Rochdale Pioneers, as a way of rewarding loyalty and thanking members of the co-operative for their support.
Paying profits back to the users of the Pioneers’ Co-operative store was a major difference at the time to the way that other businesses, who would choose to pay their profits back to their shareholders, operated.
Nowadays, members of co-operatives allocate their profit surplus in a variety of ways, such as (but not limited to); developing the business, supporting the activities of members and paying a dividend of profits back to members in proportion of their transactions with the co-operative.
Organisations such as Central England Co-operative are renowned for paying out the annual “divi” to their members, but this practice began in the time of the Pioneers and grew from there to become synonymous with the co-operative movement as we know it today.