Favabank as a Cooperative

Giving You the chance to own it, help it grow, & share in the rewards...

Our aims are ambitious, we can't do this alone.
Our concept promotes openness, community, and sharing, so...
It makes sense to extend this ethos to the way the company is run.

Cooperative Membership

We're currently in the process of setting up the cooperative legal structure.
Further details will be announce once we can officially announce that Favabank is a cooperative.
We think that operating as a cooperative will give members a special social media experience with a stronger feeling of community.

What is a Cooperative?

Cooperatives are characterised by being owned and managed by members who benefit from it's services, having a say in how its goals are achieved.

A cooperative can be a commercial organisation which from the outside looks like any other business, but on the inside it operates with a greater degree of openness, shared participation and shared rewards.

Cooperatives You'll Know:

  • Employee owned John Lewis Partnership (John Lewis stores and Waitrose), well known for enthusiastic employees offering great customer service.
  • There is also The Cooperative group, comprising: Food, Banking, Clothing, Electrical, Estates, Funeralcare, Legal Services, Motors, Pharmacy and Travel.

The 7 Cooperative Principles

There are seven guiding principles which distinguish a cooperative from other organisations:

  • 1. Voluntary and Open Membership
    Co-operatives are voluntary organisations, 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.
  • 2. Democratic Member Control
    Co-ops are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. All members who carry out a role on behalf of the co-op are accountable to the membership of the co-op. Co-op members have equal voting rights (one member, one vote).
  • 3. Member Economic Participation
    Members contribute equitably to, and democratically control, the capital of their Co-op. That capital is usually the common property of the Co-op. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership.
  • 4. Autonomy and Independence
    Co-ops are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensures democratic control by their members and maintain their Co-op autonomy.
  • 5. Education, Training and Information
    Co-operatives provide education and training for their members, elected representatives, managers, and employees, so they can contribute effectively to the development of their co-operatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of co-operation.
  • 6. Co-operation Amongst Co-ops
    Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional, and international structures.
  • 7. Concern for Community
    Co-operatives work for the sustainable development of their communities through policies approved by their members.

Why a Cooperative for Favabank?

We feel the cooperative model gives us the best chance of success:

  • An incentive for early members to help to spread the word.
  • A good way to ensure strong governance of the Fava currency, avoiding misuse and fraud.
  • Extending the ethos of the mutual currency into our commercial ethics.
  • The best way to gain widespread support in overcoming any future difficulties.
  • Ensuring that what we do is in the interest of our members, whether in the way new features are introduced or in respect of user privacy issues.

Creating a Participatory User Experience

By taking the cooperative approach, we hope be an antidote to the way some leading social media platforms power and control is concentrated in the hands of a few individuals who profit from the content created by its users.

The Fava, Favabank's Mutual Credit Currency System

How Do I Become a Cooperative Member?

Once our cooperative is legally established we will announce ways in which people can become members.

Membership will be via the following methods:

  • Favabank users will have the choice of a free user account, or subscription membership making them cooperative membership during the subscription.
  • Favabank users, as well as external parties, will be able to invest in the cooperative. They will become full cooperative membership for the duration of their investment.
  • Any future Favabank employees will be entitled to cooperative membership
  • The Favabank management team, including the founding members, will be cooperative members during their involvement with Favabank.
Cooperative Membership and Control

Benefits of Cooperative Membership

All cooperative members will receive account privileges and full voting rights according to the legal obligations within Favabank's Articles of Association.

We will make a formal announcement regarding member privileges in due course. They are likely to be along the lines of:

  • Increased, or even unlimited credit limits
  • A prescribed number of highlighted ads, SMS alerts etc.
  • Earlier visibility of new ads
  • Advanced account authentication
  • Increased number of Group memberships
  • Ability to trade Favas for discount offers by businesses

These account features depend on Favabank's achievement of its membership recruitment goals and with membership consent.

Who Shares Wins

Common Assumptions About Cooperatives

Misconceptions arise when comparing commercial cooperatives to conventional businesses where power and control reside in the hands of its shareholders:

  • Can strong management decisions be made if a cooperative is supposed to be democratic?
  • Will a cooperative be able to take risks and innovate?
  • Can a cooperative be as profitable as shareholder controlled businesses?

There are many ways of constructing a cooperative, they can be created in ways that strike a balance between effective decision making, innovation, profit seeking, and democratic control. Day to day decisions can be taken by management within a freely accessible framework which defines how things are done within the organisation and how information flows between stakeholders. E.g., it is possible for a Limited Company to gain cooperative status by writing the cooperative framework into the Articles of Association as a legally binding guide to the company's operations.

Further Information

See the resources on the right for further information about the cooperative model.

Cooperatives UK:

As a 'campaign for co-operation' the Co-operatives UK website offers access to information, help, support and forums on setting up and operating cooperatives in the UK.

The Co-operative Enterprise Hub:

The Co-op Enterprise Hub is provided by the Co-operative Group, the company behind the famous Co-op retail outlets, bank and funeral services promotes the cooperative model by providing advice, training and funding for other cooperatives.

Beyond the Corporation: Humanity Working

In his book 'Beyond the Corporation: Humanity Working' David Erdal provides evidence to challenge assumptions commonly held by economists and shows the cooperative to be a model which frequently outperforms the competition.
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Latest from Favabank

October 2012:

In October, we launched our 'Local Pages' feature to create a space for people to talk about what's happening in their community. When you log in as a user, your default page will now be your local page. Every area in the UK has a local page and we will initially be having a promotional focus in the North Surrey and Berkshire area.

See EGHAM and STAINES-UPON-THAMES for examples of our local pages, or search below for your own postcode district.

Member Spotlights:

Favour exchange as the nexus of community...

Chris Thomas

Chris Thomas, Ealing

Music enthusiast Chris has a home recording studio and is using Favabank to offer musicians the chance to cut a demo.
View Chris' Profile >>

Siobhan Elliot

Siobhan Elliot, Egham

Siobhan, a Reflexologist in Egham, hopes to exchange dog walking or cat feeding favours, as well as offering foot care treatments.
View Siobhan's Profile >>

Paul Risk, Woking

Paul Risk, Woking

'I really like the idea of making it easier to ask a neighbour for a favour and would be happy to offer IT help in return'...
View Pauls's Profile >>