The Case for a Co-op Mutualist Fund: Why Co-ops Should Fund Themselves

Future federal funding for co-op development, which was always small, is at risk. But co-ops have resources. Here’s how co-ops could self-finance their own development.

Cooperatives are a vital tool to build collective wealth; meet social, economic, cultural, and ecological needs; and boost local power. Yet federal support for cooperative small business development is extremely limited. For example, in fiscal year 2024 alone, the US Small Business Administration approved 70,242 7(a) guaranteed loans to private small businesses totaling more than $31 billion. By contrast, since 2020, there have been not 400, not 40, but four 7(a) loans made to co-ops.

The one federal program dedicated specifically to support co-ops is the Rural Cooperative Development Grant (RCDG) program, housed at the US Department of Agriculture (USDA). Funding for the program has remained stuck at $5.8 million—an annual allocation that works out to less than two cents per capita.

For that pittance, over the past decade RCDG has enabled co-op development organizations to provide specialized technical assistance, business support, education, and training to more than 8,000 cooperatives and mutuals in rural areas. It has supported the incorporation of more than 1,000 businesses and created or saved more than 17,000 jobs since 2015. This year, the administration of President Donald Trump has sought to zero out this modest allocation, though Congress appropriated full funding for the program for FY2025.

But in a society where traditional lending has never embraced co-ops and with existing limited federal support at risk, what options does the co-op movement have?

Much like Dorothy in the Wizard of Oz, it’s time for folks in the co-op movement to realize that when it comes to financing development, there is no place like home.

The Wealth of Co-ops

The layperson may think of cooperatives as scrappy. Even those within the co-op movement often operate through a lens of resource scarcity.

But the US co-op movement is large and powerful. “Look to your left, look to your right.” Congratulations! If this were an Econ 101 class, I’d let you know that one of you was a co-op member-owner.

Over a third of Americans hold cooperative memberships in credit unions alone, 143.2 million people as of March 31, 2025. Many of those people are member-owners of multiple cooperatives, as the US boasts more than 350 million co-op memberships. All told, an estimated 30,000 co-ops generate more than $660 billion in revenue. A USDA-funded study from 2009 found that co-ops generated more than $25 billion in wages and held over $3 trillion in assets, numbers that are surely higher today.

This success, however, is not evenly experienced. In 2023, the 100 highest grossing co-ops generated nearly $325 billion in revenue. Put another way, a third of one percent of the nation’s estimated 30,000 co-ops account for nearly half of all co-op revenue.

The Co-op 100 list is frequently dominated by cooperatives in agriculture, finance, and energy. For instance, Land O’Lakes is number three on the list. Not coincidentally, these sectors—the most established US co-op sectors—when they were emerging were supported by federal policy. For example, the Capper-Volstead Act of 1922 has been described as the “Magna Carta of Agricultural Co-ops.”

A mutualistic fund would invite all cooperatives to meaningfully participate in sustaining the movement—and would enable co-ops that have flourished to pay it forward.

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