What is a Cooperative?

A cooperative is an enterprise or organization owned by and operated for the benefit of those using its services. A cooperative is owned by the consumers they serve and the seven Cooperative Principles reflect the best interests of those consumers. As a cooperative, NISC works for and serves its Member/Owners. Cooperatives exist in a variety of industries, including child care, credit union, food, hardware, health care, heating fuel, insurance, utility service and more.

What are the Seven Cooperative Principles?

All cooperative businesses adhere to these seven Guiding Principles:

  • Voluntary and Open Membership. Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political, or religious discrimination.
  • Democratic Member Control. Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. The elected representatives are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote) and cooperatives at other levels are organized in a democratic manner.
  • Members’ Economic Participation. Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership.

Members allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.

  • Autonomy and Independence. Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.
  • Education, Training, and Information. Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their cooperatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of cooperation.
  • Cooperation Among Cooperatives. Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional, and international structures.
  • Concern for Community. While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.

The seven Cooperative Principles, along with our Statement of Shared Values, describe the types of attitudes, behaviors and commitments that reflect and guide the business culture of NISC. They stand as the foundation of how we conduct ourselves, treat one another and serve our Member/Owners.

Board of Directors

NISC’s Board of Directors is comprised of 14 directors who represent and advocate for the interests of our energy and telecommunications Member/Owners. All Board members serve three year terms.

Type of Entity

Cooperatives are governed under Subchapter T of the Internal Revenue Code. Cooperatives can also be corporations. NISC is a cooperative, Subchapter T, corporation that is organized under the laws of the state of Colorado. We were incorporated in 2000, when North Central Data Cooperative merged with Central Area Data Processing.

The process to become a cooperative corporation may include filing of governing documents, such as Articles of Incorporation and Bylaws, with the state in which an entity wishes to become incorporated. The Articles of Incorporation is the key document submitted to the state or governing body to create a cooperative corporation in the eyes of the law. Details included in the articles of incorporation include what the cooperative is meant to accomplish, (sphere of business or nature of the cooperative), its headquarters, officers that may be named, and primary rules set up to dictate the organization and workings of the cooperative.

Bylaws are like an official game plan of how a cooperative is to be run and operated and are developed during the incorporation phase of a business. Bylaws are the rules that govern the internal management of an organization. They are written by the organization’s founders and cover, at minimum, topics such as how directors are elected, how meetings of directors are conducted, and what officers the organization will have and their duties.