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A patronage dividend is a refund that a co-operative distributes to its members as a share of the co-op's profits. Unlike a regular stock dividend, a patronage dividend is not a return on investment.
Cooperative corporations are formed to provide some mutual benefit for their members, and because of this, the Congress of the United States beginning in 1951 has allowed them a deduction from their income for "patronage dividends." [2] A "patronage dividend" is money paid by a cooperative to its patrons on the basis of business done with these ...
Retailer-Owned Cooperative, where store-owners are shareholders of the larger company and therefore receive patronage dividends. (“Retail cooperative,” confusingly, also can refer to consumer cooperatives that have a retail storefront.) (Example: Ace Hardware, True Value, NAPA Autoparts).
This type of dividend is sometimes known as a patronage dividend or patronage refund, as well as being informally named divi or divvy. [ 38 ] [ 39 ] [ 40 ] Producer cooperatives, such as worker cooperatives , allocate dividends according to their members' contribution, such as the hours they worked or their salary.
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In 1953, the company name was changed to Associated Wholesale Grocers, Inc., (AWG) and the following year, AWG paid its first year-end patronage of $20,441 to members. Prior to 1954, members had received dividends on their stock, usually from .50-.75 per share. By the end of the 1960s, AWG had two new warehouses including one in Springfield.
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