Cooperatives generate net surplus not only for economic reasons but to sustain its social obligation and commitment to advance the 7th Cooperative Principle “Concern for the Community”. In one of our recent issue, I discussed some points on the relevance of cooperatives to socio-economic and political development of the country. It includes the benefits derived by members of cooperatives and the community where it operates. Allow me to share some of the experiences of cooperatives in the implementation of their community development programs that sustain their relationship with the community where they operate. It may serve as policy areas to some co-ops.
Further, to appreciate the unique features of cooperatives as compared to other institutions let us revisit some provisions of the Philippine Cooperative Code. Based on the provisions of Republic Act Number 9520 particular Article 86, cooperatives shall distribute their net surplus as follows: 1) an amount for the reserve fund which shall be at least ten percentum (10%) of net surplus: Provided, That, in the first five (5) years of operation after registration, this amount shall not be less than fifty percentum (50%) of the net surplus. 2) An amount for the education and training fund shall not be more than ten percentum (10%) of the net surplus; 3) An amount for the community development fund which shall not be less than three percentum (3%) of the net surplus. The community development fund shall be used for projects or activities that will benefit the community where it operates. 4) An optional fund, a land and building fund, and any other necessary fund of which shall not exceed seven percentum (7%). 5) The remaining net surplus shall be made available to the members in the form of interest on share capital not to exceed the normal rate of return on investments and patronage refunds: provided, That any amount remaining after the allowable interest and the patronage refund have been deducted shall be credited to the reserve fund.
Moreover, our focus in this issue shall be on the 3% allocation for community development fund. Recent reports submitted to CDA-CAR Extension Office indicated that most cooperatives have not formulated policies related to this provision. I thought of sharing some based on interviews with different cooperatives on how they fully harness the funds allocated for such purpose.
To realize the intention of the Community Development Fund (CDF), I suggest we segment the areas of coverage to be funded that will include social, economic, cultural, political, and environment.
Under social aspects, CDF projects related to a) health and sanitation (feeding program; clean and green; sponsorship for Phil Health coverage; health assistance to members and non-members, etc.); b) education (Scholarship Program; Subsidy to Tuition Fee and School Fees; support to school in the improvement of school facilities; Brigade Eskwela; Support to Athletes or sports activities, etc.) can be funded by CDF.
Furthermore, CDF can be used to support start-up capital for micro business enterprises of non-members in the community; and support to livelihood projects of groups in the areas of operation of the cooperative). In case cooperatives fund activities of members, it shall be considered under its regular program and funds should not be charges against the CDF.
In the life of the cooperative, cultural aspect should not be set aside. As a civil society organization, it caters to the needs of members and the community in time of death, sickness and calamities. Its relevance as a social organization must constantly put its commitment to address cultural aspirations of the group and the community. Cooperatives then can help set up fund to support mutual aid for relatives of members and non-members; financial assistance to barangay, municipal, provincial or city activities; church related activities and activities that promote preservation of living traditions that reflect cultural heritage of their respective communities.
In the promotion of democratic principles, cooperatives may undertake projects that support peace and order; information education campaign on the importance of cooperatives and other activities that sustain empowerment of the people towards sustainable development. This can also be aligned in consonance with the United Nations Sustainable Development Goals.
Finally, cooperatives had been involved in the protection of the environment. Conduct of tree planting; clean up drive and support to protection of communal forests in their respective communities. Sustaining the tree planting activities will complement government efforts to lessen the challenges of greenhouse gas emissions attributed to human activities. These are policy areas for consideration by cooperatives without Social Development It is encouraged that cooperatives support this sustainable effort, an indirect way of paying taxes without government knowing it.
