There are approximately 4,500 Co-op programs in the US made up of 50 product classifications on which some 50 billion dollars is spent each year.
Generally, as a best practice, program designers should ask the following questions while defining the program: MDFs are structured in different ways depending on the brands relationship with its affiliates (Open vs. Closed networks), the destination of Co-op Funds (for direct mail, email marketing, local PPC, etc.
The way Co-op money is structured is important as it affects affiliates' willingness to participate in the brand's proposed marketing programs.
Stipend - This structure gives affiliates the freedom to use a fixed quantity of money ($300 per month for example) to opt into marketing programs that the brand makes available.
This approach is often not recommended because Brands have a hard time motivating affiliates to spend their money first and try to recoup it later through cumbersome reimbursement logistics.