A mutual association is an organization that exists for the benefit of its members. While you may think that all associations exist to benefit their members, many associations and corporations exist only to benefit their shareholders.
For example, when it comes to association voting, mutual associations allow their members to vote, whereas corporations only grant that right to shareholders.
Mutual associations come in many different types and exist for many different purposes. Mutual association legal structures also vary depending on the mission of the association, but they all share the goal of benefiting their members. Here are some examples of mutual associations that most people would be familiar with:
A credit union and a bank are not the same thing. When you put your money into a credit union, you aren’t buying a banker another fancy car–you’re pooling your money with all of the other members of the credit union.
Any profits made on interest payments from loans and other associated income is either returned to the members as a dividend or used to offset the cost of operations. This allows credit unions to offer substantially better interest rates to its members.
Mutual insurance companies are like credit unions for insurance. Members pool their money and share the risk of each other's policies. Because the insurance company is member-owned and profit is not the goal, mutual insurance companies often have lower premiums and report higher member satisfaction than the typical insurance company customer.
Cooperatives exist to benefit their members by allowing them to pool together their resources–this is typically done to enhance bargaining power. For example, if multiple restaurants form a co-op, this co-op can negotiate favorable deals from food suppliers because the co-op is buying in larger quantities than a single restaurant could afford.
Cooperative association voting is conducted in a manner similar to how corporations and legally recognized associations vote for their leadership. Candidates are nominated, ballots are sent out, votes are cast, and results are announced.
The key difference between mutual association elections and corporation elections is that only members may vote, as there are no shareholders. Each member is given one vote. In the shareholder system, one share is one vote, allowing the wealthy who hold many shares greater power. In this way, mutual associations protect their members and give everyone the same power.
Many mutual associations are large, national entities that have members across the nation or around the world, which can make elections difficult. Thankfully, online election services such as ElectionBuddy have streamlined this process and made it easier for mutual associations and other organizations to allow all of their members to participate in the leadership election process.
Mutual associations can be powerful entities. Once you understand how their elections differ from other associations, you’ll understand just how effective they can be.
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