patronage dividends

Patronage dividends are financial rewards that organizations, particularly cooperatives, distribute to their members based on the amount of business those members conducted with the organization. Essentially, if you purchase goods or services from a cooperative, you may receive a portion of the profits back as a dividend at the end of the year. This system encourages loyalty and supports the cooperative's mission, as members benefit directly from their contributions to the organization's success. Unlike traditional dividends paid to shareholders, patronage dividends are tied to members' usage rather than their investment stakes.