Most theoretical and empirical research on cooperatives focuses on the comparative statics behavior of optimizing cooperatives. We focus on the magnitude and sources of variation in the dividend that cooperatives are presumed to maximize. Variation in the dividend leads to an inefficient allocation of labor among cooperatives. For a panel of 59 Spanish cooperative financial institutions, from 1994 to 2001, we decompose dividend variation into mutually exclusive and exhaustive sources. We also compare the performance of all other cooperative financial institutions to that of Caja Laboral Popular, which provides financial services to the Mondragón group of cooperatives. © 2004 Association for Comparative Economic Studies. Published by Elsevier Inc. All rights reserved.