Sustainability of Cooperatives

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Formation of civil society organizations like associations, clubs, sororities and cooperatives are associated with various goals. The purposes can be for social, economic, cultural, religious and environmental concerns. Reality tells us the ease of forming groups but sustaining their operations is a different story.

Cooperatives registered with the Cooperative Development Authority (CDA) have different business operations. In order to be competitive cooperatives’ adherence to organizational policies; diversified services; effective and efficient operations; concern for the member-customers; functional organizational structure; frequent audit; compliance to government regulatory bodies; and persistence to conform with standards. As cooperatives’ need to exist based on the concept of self-help, they must exert effort to rely on internally generated resources and ask help from external sources when situation requires. However, it cannot be denied that some registered cooperatives rely on subsidies, grants, donations and borrowings as sources of funds for business operations. Observations indicate that these institutions have difficulty in raising the status of their business operations as members fail to commit their hard-earned resources as capitalization of the cooperatives and dependence on assistance provided by government and private entities is part of the resource generation strategy.

Recently, we discussed the challenges and risks involved in cooperative operations. The topics discussed in our previous columns have relationship with sustainability. Failure of cooperatives to recognize planning with the involvement of members, management staff, officers and stakeholders can create problems during the implementation stage. Stronger support and participation of stakeholders in the whole project cycle of a given organization has always been highlighted by various authors of development initiatives. We draw lessons from the experiences of civil society organizations and government entities in various countries wherein the involvement of people in the decision-making created stronger relationships to resolve issues that confront them in their respective communities. It clearly indicates harnessing local indigenous knowledge that touches the hearts and minds of the people to cooperate and be part of the intended change.

Further, clarity of purpose and the acceptance of the needed intervention allow people to be part of the activities. In cooperative undertakings, the conduct of regular officers and staff meeting; annual general assembly; audit of books by accredited external auditors; presence of effective feedback mechanism on how far the business is serving the needs of members; vertical and horizontal integration; and compliance to required reportorial requirements, etc. are some of the best practices that guide cooperatives to grow. This brings us the need to fully appreciate the vision, mission, goals and objectives of our respective cooperatives. Imbibing the essence of why we form and join organizations ensure our commitment to support all affairs of the cooperative being owners and member-users. Guided by the articles of cooperation as contract between the government and the group, the need to periodically assess how far objectives or purposes are attained. Also, the by-laws that provide the framework for the governance of organization together with duly approved policies must be known to members and management staff. In cases wherein some provisions need to be revised, it must always be approved by at least two thirds of regular members with voting rights.

In addition, issuances from local and national agencies must be complied to ensure smooth operations. Some cooperatives challenge regulatory bodies and protest the imposition of approved laws. In this context, we understand the sentiments especially when they were not consulted or informed of such laws. This scenario manifests the need for policy-makers to relate with affected communities on the possible impact of legislated laws and the need for consultation or public hearing. Similar to cooperatives, the need for transparency by involving all members on policy matters that affect cooperative business operations during regular or special general assembly is necessary. Officers and management staff are accountable to the general membership, thus, the need to disclose all plans and programs and formulated policies is vital to the organization. Records must be readily available to members and government and non-government bodies when required subject to policies and procedures to ensure protection of members’ information.

Finally, sustainability requires participation aside from transparency and accountability. As members there is a need to actively support the business operations of the cooperative. I have heard some stories wherein members complain when some members avail the savings and time deposit services of their cooperatives but fail to borrow or make use of the cooperative services. It brings to us the question whether those members who only deposit their money to the cooperative are patronizing the services of their cooperative. While it may seem that depositors fail to patronize the services of the cooperative because they don’t borrow or buy from the cooperative, the act of putting their hard earned money in the cooperative that forms part of the capitalization signifies participation through increased capital build-up. For cooperatives to be sustainable, flexibility must be within the reach of those involved. The need for transparency, participation and accountability of all stakeholders assures the momentum for cooperative business operations to succeed. Learning from the experiences of other institutions and putting forward the interest of the majority keeps the organization moving. We salute all cooperatives that have shown their strengths as they continue to soar in bringing changes to the communities they serve. It is our fervent prayer that our commitment and willingness to survive the challenges inspire us sustain our gains.

HAPPY COOPERATIVE MONTH CELEBRATION TO ALL!

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