Cooperative Models and Non-Profit Social Enterprise Structures

Types of Cooperatives

1. Financial Cooperative: A financial institution where ethical and social aims take precedence over profit. Example: Lending money at lower interest rates, or providing loans to individuals who might not qualify at traditional institutions.

2. Housing Cooperative: Run to provide housing for its members, as opposed to generating rent for private landlords. Example: Owning an apartment building where each member is entitled to one housing unit.

3. Workers' Cooperative: A business owned and operated by the workers themselves, typically avoiding significantly higher wages for managers. Their primary priority is providing employment. These cooperatives often emerge when a business is about to fail, and workers take over to save their jobs.

4. Producer Cooperative: Groups of producers collaborating in specific stages of production. Common in agriculture: Grapes for wine production, or olives for olive oil. The aim is to maximize the utilization of expensive equipment that individual producers could not afford alone.

5. Consumer Cooperative: Provides services to its consumers, who are also part owners of the business. In the UK and USA, common consumer cooperatives include grocery stores. Individual consumers become "members," entitling them to purchase goods, often at lower prices.

Non-Profit Social Enterprises

Defining Social Enterprise

A social enterprise is an organization directly involved in the sale of goods and services to a market, but which also has specific social objectives that serve as its primary purpose. Social enterprises are not volunteer organizations; they operate as an enterprise by selling in a market and can be registered as for-profit or non-profit.

Characteristics of Non-Profit Social Enterprises

• In the case of non-profit organizations (NPOs), generating profit is never the ultimate goal.
• They are a form of business that has a social purpose, aiming to improve human, social, or environmental well-being.
• An NPO uses its surplus revenue to help achieve its purpose or 'mission,' rather than distributing surplus income to the organization's directors as profit. It directs all the money it raises toward a social cause.

Main Features and Financial Structure

The core aim of these businesses is always a social purpose; they typically do not aim to generate profit whatsoever.

• Though these social enterprises are run as businesses, they generate (or aim to generate) surpluses rather than profit.

• Understanding Surplus Revenue

  Conceptually similar to profit, Surplus is the extra revenue generated after subtracting the NPO's costs. Rather than distributing money to owners in the form of dividends (or paying taxes), the money they "spare" is used to advance their social purpose.

Examples of Non-Profit Organizations

• Examples include: Greenpeace, UNICEF, Red Cross, MoMA, and TED Talks.

Organizational Categories

• Social enterprises can take many forms, and sometimes the differences between models can be very subtle.
• For non-profit social enterprises, there are two main categories (types of organizations): NGOs and Charities.