Are your utility and service needs being adequately met? Most citizens would say no or not entirely. Over the past 30 years, I have come to appreciate cooperatives as an effective means to address needs that private sector and government will not or cannot adequately fulfill.
First established in England in 1844 to address the high price and low quality of food and household goods, cooperatives have flourished worldwide. A cooperative is member-driven and exists solely to provide service, nonprofits, to its members. Cooperatives follow seven principles adopted in 1995 by the International Cooperative Alliance. They are:
•Voluntary and open membership.
•Democratic member control.
•Members’ economic participation.
•Autonomy and independence.
•Education, training and information.
•Cooperation among cooperatives.
•Concern for community.
I’ve found that many people do not understand the cooperative model, holding that it is applied only in rural areas for electric and telephone services. But while cooperatives were certainly instrumental in providing electrification to rural areas following the Great Depression, other examples of cooperatives today include home health care, credit unions, agriculture, housing, child care, telecommunications, insurance, and water and wastewater cooperatives.
The number of cooperatives in the United States continues to grow, with more than 29,000 as of 2016. Two of the fastest-growing categories are home health care and food production. The model is well aligned to serve the growing industry of “farm-to-table” food producers and holds promise in addressing areas of food deserts. As models of providing health care continue to evolve, home health care cooperatives are growing rapidly.
Cooperatives help provide infrastructure for economic development in rural areas. To become economically vibrant and competitive demands that our rural areas have reliable access to broadband, sewer, water, electricity and other telecom services. Frequently, the private sector and government are not interested in initial rural investments, dissuaded by low rates of return for investors and legal restrictions and funding limitations for governments.
Cooperatives can serve a local or regional solution to many of these issues because they can be sized appropriately (bigger isn’t always better), are self-governing, and operate as nonprofits, which allows profits to go back into addressing the need. Any excess profits are returned to cooperative members via capital credits. And, in Indiana at least, cooperatives pay property taxes.
As a disclaimer, for the past five years I have served on the board of directors of Greenfield-based NineStar Connect, which is a multi-utility cooperative. Today, every member of NineStar benefits from direct fiber-optic service to the home.
NineStar has partnered with multiple jurisdictions to assist them in providing fiber. Several partners include both Henry County and Johnson County REMCs, with other partnerships to come. NineStar has purchased small water and sewer utilities in an effort to improve quality of life and position those areas for economic growth. These acquired utilities have seen upgrades, expanded jurisdiction and fostered economic growth. Their customers are now cooperative members.
While cooperatives are not applicable to all situations, they have clearly demonstrated that they can effectively and efficiently address services where the private sector and government cannot.
