Innovative Cooperative Investment Projects Through a Foundation to Developing Performance Sustainability Model

Abstract

The study aims to explore the sustainability indicators of a foundation operating within the umbrella of a cooperative. As the business environment changes rapidly, cooperatives face numerous investment opportunities, both traditional and non-traditional. Boards of directors and management should use multiple tools to evaluate investment opportunities, including the payback period and internal rate of return. The payback period measures the time an investment takes to pay for itself, while the internal rate of return looks at cash flows over the project's life. The best way to evaluate an alternative is a combination of payback period and internal rate of return.

A survey of 35 cooperative managers and board members in Oklahoma revealed that the most important factor when considering a new investment is the projected rate of return on the investment. The primary criteria used by cooperatives was the projected internal rate of return, with the rate of return accounting for 74.29% of the surveyed cooperatives. The return on investment ranged from 6 to 25%, with an average of 12.17% and a payback period of 2-15 years. The quality of information used in making an investment decision was primarily the general manager's tool, with verbal recommendations being the primary tool.

The study aims to design a set of sustainability indicators pertinent to the cooperative's longevity, focusing on meeting economic progress, satisfying socio-cultural interests, and protecting the environment.

In conclusion, cooperative businesses offer several advantages over traditional business models, such as equal status, open membership, product and service access, social benefits, business stability, and the ability to provide education and support to members.

Cooperative businesses are easier to form than traditional companies, requiring only ten members to form a steering committee, incorporate under the correct state statute, create a business plan, recruit members, secure financing, and open the doors. Members are only liable for the money they have invested in the co-op and are not responsible for any debts or other liabilities of the company unless in the case of fraud or negligence.

Cooperatives also receive less taxation as they are not-for-profit businesses, receiving several tax exemptions and concessions. States often offer loans, grants, and financial assistance to cooperatives, as they are crucial to the socio-economic development of the communities they serve.

Cooperative members enjoy better economic positions, with higher self-reported income figures and greater proportional representation in the top four income bands. They also report a sense of financial security and overall well-being, and 74% of non-members state that cooperative activity positively affects the community's overall economic development.

Cooperatives in the Philippines have an excellent record on gender inclusion, with women and men members benefiting equally economically when compared to their non-member counterparts. The higher representation of women cooperative members suggests that cooperatives play a key role in women's economic empowerment, as women's participation in the general labor force is significantly lower than that of men.

Cooperative members in the Philippines have greater social capital and resilience than non-members, with 94% of coop members having trust in others in their community. They also have greater access to resources in times of emergency, with 86% turning to cooperatives directly or through savings. Cooperative membership is perceived as supporting members in fundamental business activities and economic decision-making, with 91% believing that cooperatives help them make decisions fundamental to their economic security. However, cooperative members do not strongly perceive the benefits of membership in the social program. Qualitative research affirms intangible benefits, such as educational programs for youth and health-related programs. Both members and non-members perceive that cooperatives positively influence the overall quality of life in the community, with 57% observing direct effects and 70% believing that cooperatives attract outside investors.

Satisfaction with cooperative membership is very high, with 63% of members being "very satisfied" and 27% being "somewhat satisfied." Friendship and security were two dominant themes linked to the pride in their cooperative membership and loyalty to their cooperatives. Non-cooperative members often do not belong to a cooperative due to a lack of awareness about costs and benefits, inaccurate views of cooperatives, or communication issues. However, the data in the Philippines shows that members identify and value a "cooperative difference," and this satisfaction is borne out by the economic benefits they receive from their membership.

Cooperatives worldwide operate under the International Cooperative Alliance's core principles and values, which trace back to the first modern cooperative in 1844. These groups are autonomous individuals based on volunteerism, democracy, and common cultural, social, and economic needs. The six main cooperative values are self-help, self-responsibility, democracy, equality, equity, and solidarity. Members should help themselves and each other, and democratic structures ensure control, and no one holds more power than others. Each member should benefit from equal rights, treat members fairly, and form a unified network. Additionally, co-ops have ethical values, such as honesty, openness, social responsibility, and caring for others, which serve as guidelines for integrating and practicing these core principles in every aspect of their organization.