Organisation

From DnDWiki

Contents 1 Introduction 2 Flowchart, key 3 Legal structures 4 Finance - external and internal 5 Degrees of income sharing 6 Business planning 7 Types of decision making 8 Why have rules? 9 Tenancy agreements 10 Records

[edit] Introduction

Good organisation reduces stress, as well as wasted time, materials and money. The minute you decide that you want to realise the dream of living communally, you will need to start organising and planning - perhaps in your head to begin with, then on paper. The important thing is to avoid reinventing the wheel; there is so much collective experience out there, which you can use and adapt, and only invent if you really want to.

So this chapter is about laying your hands on that juicy previous knowledge, whether you want to set up a new community, or want to understand the organisation of one which you are thinking of joining.

This chapter has been roughly chopped up into six sections: decision-making being the first, which in turn affects plans, rules, legal structures and money matters. Finally, we look at record-keeping - absolutely vital in any organisation.

It is important to remember the people-centred positions of communities in all of this: agreement and co-operation between individuals is essential. Decisions are agreements on courses of action. Any bureaucracy established should be there to further the aims of the group. If it doesn’t, don’t be afraid to throw it out.

Finally, there are some cracking organisations out there with excellent on-line information. The following have been incredibly useful, and offer information either free (cc - creative commons [catalyst]- put a bit about copyright into ‘how we made this book’) or for a donation. Please give generously to such organisations who take it upon themselves to present information clearly and freely, empowering all of us.

http://seedsforchange.org.uk

http://www.radicalroutes.org.uk

http://www.upstart.coop

http://www.catalystcollective.org

[edit] Flowchart, key

This is a stub. We can remember a flow chart that leads you through the maze of choosing a legal structure - we think it was orginally drawn up by ICOM or the National Federation of Housing Co-ops but we haven't found it in the archive yet. If anyone out there has a copy please put it here.

[edit] Legal structures

When you start talking about legal structures for communal living, there are different reactions from different people:

-nervous (‘will I understand this?’)

-angry (‘this is a waste of time’, or ‘why do we need this?’)

-yawning (‘I won’t understand this, so I might as well not try’)

-alert (‘OK, this is a necessary step - what do we do next?’)

-enthusiastic (‘mmm - more jargon to get my teeth into!’)

-blank (‘I’ll just switch off for this next bit - someone else will handle it’)

Maybe you are one of those people who thought that living in an alternative community would let you get away from the rules and structures society imposes on people. Well... er... you can go for a purely collective status, but the fail-safe egalitarian approach is to have a legal structure. Why? Basically, if you as a group intend to do anything which would put an unfair responsibility on an individual on behalf of the group, you need a mechanism to share that responsibility, and legal structures provide this.

Let me give you an example: if you collectively wanted to borrow money or own a property, having a legal group identity, that is becoming incorporated, means that financial risk and responsibility is shared among members of the group. Such a Corporate Body can own property, make contracts, be sued in law and generally act as a ‘legal person’. It can be registered either under the Companies Acts (including the relatively new ‘Commonhold’ body) , through the Registrar of Companies, or the Industrial and Provident Societies Acts, through the Registrar of Friendly Societies.

Probably the most important aspect of incorporation is limited liability: like a lot of organisational structures, they are there for when things go wrong - and when borrowing large sums of money or owning property, there is the potential for things to go very badly wrong! Legal structures also allow an interface with financial institutions and the legal system of the country in general.

Suppose you have one or two members who are willing to take on personal responsibility on behalf of the group? My advice is to not let this happen under any circumstances! If you have (say) a couple with money who are willing to stump up the cash, what happens if they fall out with the rest of the group? Or with each other? It happens. Make it fair. Organise a legal private mortgage with them instead, or ignore their money and borrow from a corporate ethical lender instead. You have been warned.

OK, so what type of legal structure should you go for? Have a look at the following flow-chart to see if there is something which fits easily. If you need advice on which type to choose, visit http://www.upstart.coop or http://www.catalystcollective.org both of which specialise in setting up co-operatives.

A word to clarify how Housing Co-ops and CoHousing fit into all this...

Housing Co-ops and CoHousing are not types of legal entities, rather they are different ways of providing housing:

‘A Housing Co-operative is a business that owns or rents property for the purpose of housing its members. A fully mutual Housing Co-operative is one in which all members are tenants or prospective tenants and all tenants are members. In other words, it is the people that the co-op is housing or intends to house who decide how it will be run, and no one else.’ (UpStart)

Co-Housing is a ‘particular style of neighbourhood development based upon a creative combination of private and communal facilities.’ (Field)

A word on freeholds, leaseholds and commonholds

Commonhold is a new type of property ownership, which is an alternative to the leasehold system. It allows freehold ownership of individual flats, houses and non-residential units within a building or an estate. The advantage of this is that you don’t have leases which diminish in value with time. The rest of the building, or estate ( the commonhold) is owned and managed jointly by all the flat or unit owners, through a Commonhold Association, which is a company.

A commonhold can only be created out of freehold land, or a freehold building, and comes into effect when the land is registered at the Land Registry as a commonhold. This can be a new building or an existing building.

(Full details of how to register a commonhold are available from the Land Registry - see Practice Guide 60 - www.landregistry.gov.uk). [can’t see this at website - B]

co-ops act? What effect would this have?

[Need a paragraph on the process for each of the following to set up: - go to UpStart?)

unincorporated association (Whiteway)

Industrial and Provident Societies (Radical Routes)

In Britain, most Housing Co-ops are registered with the Registry of Friendly Societies. This makes them ‘Industrial and Provident Societies’, governed by the legislation of the same name. This gives them a legal identity; property is owned, and agreements made, not with any individuals in the organisation, but with the organisation itself as a separate body.

If a registered Housing Co-op is fully mutual, it is entitled to exemption from corporation tax on all income from rent. Since this is usually all of a co-op’s income, this means no taxes at all - a big advantage. Because the Housing Co-operative can behave as a landlord, the grants and benefits to do with landlords can also be received by it - in particular, Housing Benefit. This is very important for Co-ops with tenants on low incomes.

An important part of Co-op rules for Industrial and Provident Societies is the clause that states that no payment can be made to members. No profits are paid out, no wages can be paid for work as an officer of the Co-op, and no bonuses or cash handouts are possible. This is why they are ‘Friendly’ societies - they are run by volunteers.

If you want to set up a Housing Co-operative, you will need a group of at least three people willing to take responsibility for it, and you will need about £400 (assuming you use standard, ‘model’ rules). You will need to work with a ‘promoting body’ - we recommend Catalyst Collective, who register Housing Co-ops for Radical Routes at a low cost.

Company Limited by Guarantee (Beech Hill)

Companies (which are registered by Companies House) also have a legal identity; property is owned, and agreements made, not with any individuals in the organisation, but with the organisation itself as a separate body.

Indeed, it is possible to register a Housing Co-op as a company. The advantage to this is that members can come and go without having to legally disentangle themselves from ownership of the property, mortgages and loans. They are easy to leave and join, but while you are a member you effectively own the property. If the Co-op fails (it has more liabilities than it has assets) then the liability of the individual members is limited to one pound. Cheaper to set up if you have some model rules...

[ask upstart about housing benefit and companies - I think it’s no problem]

company limited by shares (Stroud)

A company limited by shares is controlled by share-owning directors who will have a collective and shared liability for all the action and effects of the company. The worth of their shares can accrue monetary value, and shareholders may have the opportunity to amass unequal proportions of the limited number of formal shares that has been issued. The absolute liability of directors in such companies is unlimited, in as much as each director may become individually liable for the responsibilities of the whole company (and other directors acting on behalf of the company)

registered charity (Findhorn)

To become a registered charity, you need to fit with the charity commission’s purposes:

• the relief of financial hardship;

• the advancement of education; and

• the advancement of religion.

Second Group: certain other purposes for the benefit of the community.

Co-Ownership, Trusts and Housing Associations

Other ways of owning and managing properties include: private individuals, groups of individuals (joint mortgages), Housing Associations, and Trusts. The advantage of Co-ops is that all the people living in the property, and only the people living in the property, have an equal voice in the running of the co-op. Trusts are sometimes used when there is an outside interest that may conflict with tenants interests (for instance, the preservation of a listed building). Housing Associations are more appropriate when the people living in the properties need the support of other people to take decisions. Private ownership is used because people want to have a stake in the property, and be able to sell their share when they leave.

The following are notes that need expanding on.

equity v ease of coming and going (old hall v lifespan)

other agreements eg allotments

tax? stamp duty? capital gains? - talk to UpStart

A guide to legal entities - see Martin Field p 102+ Collective Housing Handbook p3

should this be approached the other way round, with these presented first and then types of structure? I think it would be an easier way to grasp it all! B

- Privately-owned unit model (2-column) stroud, lewes, old hall

buying property or land - borrowing money (see money chap) - freehold and leases - communal space - upkeep - service charges - conversion v greenfield - mortgages - selling - design of units - the co-housing model - precursors - sweat equity

-Renting model (2-column) radical routes, upstart

buying property or land - borrowing money (see money chap) - tenancy agreements (assured shorthold, what they should include) - the job of being your own landlord/lady (landl) (different hats, shooting yourself in the foot, legal requirements eg fire regs, furnished or not, deposits) - council tax - security of tenure v being able to get rid of people - being the rent collector - dealing with the council over housing benefit - dealing with slow or non-payment by renters - what happens when the loan has been paid off? - going away and coming back. Equity v. ease of coming and going. (Oldhall v. Lifespan)

- Mixed model (2-column) BUNK

Beech Hill - pros and cons -

Flowchart

(double-page spread) - detailed descriptions (rules, who governs, pros and cons, legal requirements) (co-operative.uk website?; ICOM?;upstart? for type of legal structure - is there a flow-chart for whole organisation?)

Secondary rules

what are they? Why have them? What is relationship to primary rules?

Leases

Loanstock

Tenancy agreements

Liasing with solicitors and accountants

What’s a Housing Co-op? (upstart)

Links: Confederation of Co-op Housing, UK Housing Co-ops, UpStart Workers Co-op

A company might not have the same rules, but it would probably not be possible for tenants to claim Housing Benefit. Housing Benefit is meant to go towards the provision of social housing, and not to be passed on to the claimant.

Co-ops have proved to be effective forms of management: a report by an accountancy firm said they came out best for maintaining properties and providing a good service to tenants. By taking property into common ownership, we can create a strong co-operative housing sector providing security for all of us for the future.

Then you will need to decide as a group want kind of property you want, whether you intend to rent or buy, and if you want to buy, how you will raise the finance.

This will lead to your writing a business plan. This will contain more or less the same things that any business would have to think about, from marketing to cash flows. As well as the business plan, you will need policy or ‘secondary rules’. This will state what your aims are as a group, how you will organise yourselves to achieve them, and how you will resolve any conflicts or disagreements that may arise. UpStart can help you with the whole process from developing a vision for your project, through business planning and finance, to ongoing support and services.

[edit] Finance - external and internal

MONEY

paying bills

The good news is that you will definitely be able to live more cheaply by sharing resources. The bad news is that you will still have to pay bills! The even worse news is that if you spend the money you’ve saved on a cheap flight, you blow your environmental credits sky-high!

If you talk to someone who has lived in community for years and years, probably one area they will have lost skill in is shopping, especially for food! It is possible to live in a community and not have to buy a toilet roll, bag of flour, sack of potatoes or box of matches for a decade. Yet you might be up-to-date on the best broadband deals or green power options.

The great thing is that responsibility for paying bills lies with a subgroup or certain individuals who may take on, say, the telephone bill for a couple of years before passing it on to someone else.

How collective bills are depends totally on the set-up. In an income-sharing situation, all bills will be paid collectively (usually with individuals receiving ‘pocket money’ for small items each week). In a co-housing situation, it is more usual for households to be responsible for their own bills, with some sort of service charge to cover communal features such as the communal house, maintenance of carpark, sewage works etc.

Communities in the middle of this spectrum, typically having rented rooms in a large house, tend to have a mixture of collectively paid bills and ‘kitties’ for user-paid services.

For example, food, shelter and warmth are usually paid by individuals at standard rates while other services (perhaps seen as more variable depending on individual choice) are paid for by use (eg phone, carpool).

In this way, the approach to paying bills is very different from that of an individual household where you have to deal with what can seem a never-ending parade of them. Also, if there is a problem paying a bill, you can share that with the rest of the group to find a solution, or if you want to dispute a bill, there is plenty of support for calls, letter-writing etc.

As well as interacting with the ‘outside’ world in terms of paying bills, it is often the case that an internal economy arises.

Here are some ways that different communities have tackled paying for stuff:

RENT

Rent can be based on people (an adult pays so much, a child less etc) or space (floor area, ‘unit’, other qualities) or on ability to pay (if you earn less, you pay less) or combinations of the above.

Setting the rent is an interesting and extremely empowering exercise -

-’What? I get to decide how much rent I should pay?’

-’yes!’(use speech bubbles?)

you probably need to include repayment of loans/mortgages, an amount for structural upkeep (including some towards a ‘capital reserve’ for bigger, less frequent jobs like replacing the roof), an amount for decoration of rooms and communal areas, buildings insurance, council tax, water bills?, essential checks such as gas appliances, fire alarm etc and an amount for ‘voids’(if during a year one room out of six is empty for a period, you need to make sure that you still have enough money coming in from the other rooms to cover essential outgoings).

Then there are other questions to consider:

Should the rent be inclusive of other living costs (such as heat & light, TV license etc)? Should rent be set to reflect local values? Should rent be subsidised by communal income generation? What about rent levels set by housing benefit and how might they affect members on benefits? What about a ‘profit’ element gained from rent and what should be done with it? Should dependants be subsidised by other renters? If rent is paid according to income, how is that level set? What happens when loans are paid off - should rent levels drop? To what level? Should long-term renters who have effectively paid those loans off be expected to carry on paying the same? Should rent be for a particular room, or for use of space within the house? If the latter, will you expect people to move around to accommodate everyone’s needs? Should renters be able to paint their room gloss black, and if so who pays for it and who pays for it to be painted over when they move? What about deposits? What about infestations? What happens if someone wants to go travelling for six months and then come back?

For example, at Beech Hill community in Devon, renters pay weekly rent for their room and a weekly ‘communal charge’ which covers electricity, gas, oil, wood, water, washing materials (eco-balls), domestic cleaning materials, lightbulbs, capital costs on white goods etc. They then pay ‘foodpool’ which covers wholefood orders, bread, milk, cheese, some tinned and fancy goods and all the costs of running a productive vegetable and fruit garden, including costs of seeds and tools. Rent and communal charge are not negotiable, but foodpool can be, depending on diet. The foodpool provides for a healthy, mainly organic, vegetarian (with a bit of tinned fish) wholefood diet, with people buying their own chocolate, alcohol, meat and fruit if they want to (some don’t).

As a company, Beech Hill has accounts at some local stores, making buying of some non-food items (eg DIY materials) very easy.

The following are notes that need expanding on.

Families and economies of scale

in community - win or lose?

rented space

bulk buying - lose choice of brand

need more stuff here.... editor!

Cute (and not so cute) Kitties

The ‘pay-by-use’ or ‘club’ approach is sometimes used when facilities are used very unevenly, when the community is not willing to finance all the costs (but may become a member), but a subset of people are. Some examples of ‘pay-by-use’ are phone use, carpool use, TV use (those who have TVs and so contribute to the license), meal use (in communities where people log communal meals and pay for them monthly) and photocopier use. Pay-by-use can be as simple as a tin for collecting money and someone willing to change cash into a license/cheque for materials etc, or become as complicated as you like. Probably the acme of complexity is the dreaded phone bill, which may be divided between perhaps 20 users! (By the way, the Phone Co-op provides a service whereby users enter a two-digit code before making a call and get a bill itemised for each code user - very useful!).

Some examples of ‘clubs’ are newspaper/magazine subscription clubs, pig or chicken clubs (to raise animals for meat and/or eggs) and internet access clubs. These likewise may have simple or complex administration.

FOOD

Growing your own food saves loads of money, and ordering wholefoods wholesale also saves a lot. Sometimes it is possible to strike deals with local producers for regular orders, especially if someone is willing to collect from the farm. Community supported agriculture is another possibility.

SERVICE CHARGE

In a leasehold or cohousing set-up, although bills may be paid by individual households, the costs of communal facilities need to be paid for. These may include such things as infrastructure of the site (parking, roads, paths, lighting, recycling+rubbish facilities, grass-cutting etc), communal house costs, sewage, renewable energy costs etc. Will these be covered by housing benefit?

Borrowing Money

If you are setting up a community, you will probably want to borrow money to be able to do it. The following summary from UpStart describes the options available to you and explains some of the jargon if you are new to all this.

private loans

loanstock

Secured Loans

Those Building Societies that have not yet converted into banks offer the best deals because their mutual status allows them to save money. However, they must have a legal charge on the property as security - usually the first charge. That means that if the co-op is unable to meet its obligations, they can repossess and force a sale of the property to recover their money. It is also the case that government rules regarding Building Societies limit their exposure to businesses - including Housing Co-operatives. For this reason, they may be unable to lend to you. The first place to try would probably be the Ecology Building Society, for their strong ethical and environmental record: 18 Station road, Crosshills, Keighley BD20 7EH.

Among banks, the Co-op Bank would appear to be the best bet (or its subsidiary, Unity Trust, which provides free banking services for co-ops). The Co-op’s branches are well able to assess business plans and will be able to accept 60% security on a property. They may be open to other forms of security - ask and see. To find your nearest branch, contact PO Box 101, 1 Balloon St, Manchester M60 4EP. Unity Trust is at 4 The Square, 111 Broad St, Birmingham 0121 631 2743.

Triodos Bank is a European ethical bank which specialises in lending to community based projects without conventional forms of security (though they would still prefer to be the main lender with a first charge of up to 70%). They look for groups of supporters and friends who can act as guarantors. Each person pledges to pay a fixed sum in the event of the co-op collapsing, and place 10% of the sum on deposit with the bank. Contact Triodos at Brunel House, 11 The Promenade, Bristol BS8 3NN 0117 973 9339 www.triodos.co.uk. Radical Routes is a secondary co-op which runs its own ethical investment scheme, Rootstock, for the benefit of its members. They can apply for loans with very low interest rates (6% for Housing Co-ops, 8% for Workers Co-ops) and can use a similar system of guarantees (although they don’t require the 10% deposit, and prefer smaller individual guarantees).

Unsecured loans

Industrial Common Ownership Finance was set up to provide finance for co-ops, and have proved very successful in raising investment for this purpose. They make small (up to £50,000) loans to co-ops and other social economy organisations from a number of different funds. In order to cover their risk, the interest rates are high and the terms of the loans are shorter (usually ten years). Contact them at 115 Hamstead Road, Handsworth, Birmingham B20 2BT 0121 523 6886 icof@icof.co.uk.

Of course, individuals can make loans to co-ops with more or less whatever terms they like. Check your co-op’s rules, as most will place some limits on the interest payable - it should be a commercial rate, not a get rich quick scheme. ICOM can provide some sample loan agreements - you should definitely have something down on paper to explain when and how the money is to be repaid, even if you are borrowing from a friend (some would say, especially if you are borrowing from a friend). If you haven’t yet registered, at the very least provide a receipt for any loans you receive until you can establish a proper contract with the co-op.

At this point it is worth making a distinction between Industrial and Provident Societies (most, but not all Housing Co-ops and Community Businesses) and Companies (many Worker’s Co-ops). I&PSs have more flexibility over taking investment and don’t have to take tax from interest for the investors. Worker Co-ops do, and it involves a lot of form filling. They are also restricted in that they cannot advertise any opportunity to invest to the public without getting a prospectus approved by a solicitor and an accountant (which isn’t cheap). The legislation isn’t totally clear, but it seems that you aren’t advertising to the public if the only people who hear about it are your members, up to 50 others, and people who are deemed to be well informed (financial advisors, local authorities). Loans to companies from Directors (e.g. members) are usually recorded as such in the accounts.

This is particularly worth bearing in mind if you are intending to issue loanstock. This is a form of loan agreement popular with many Housing Co-ops in which loanstock is ‘purchased’ with a closing date when it will be repaid. It is quite a good idea to ‘stagger’ the closing dates so they don’t all fall at once - this will also allow you to offer different terms to different lenders. Many schemes state how repayments can be made before the closing date if the investor requests it, and suggest appropriate ‘periods of notice’ for various sums. However, you should always state that such early repayments may be suspended if the co-op feels it has insufficient funds.

You can offer interest, and you may think is prudent to pay interest in the form of additional loanstock, to avoid high running costs. Some co-ops have linked interest to inflation or base rates, but this is administratively very complex. Whether you make the interest simple or compound is up to you; and you can allow yourselves to vary the rates each year, but whatever you decide spell it out in detail in the conditions. If interest is set too low, lenders may find it unattractive; if it is too high, you may find it an expensive form of finance. Lenders are liable to pay tax on their interest. However, it is not your responsibility to inform the Inland Revenue of any investors receiving less than £250 interest each year - though if they request a list of all investors you must supply it. Although loanstock sounds like having a share in the co-op, it must be borne in mind that it carries no voting rights, and does not give any member of the co-op a different status to non-investing members.

It is most important that you keep scrupulous records and ensure that clearly stated conditions are on all application forms and certificates. Make sure that cheques are made out to the co-op and not to individuals - when handling other people’s money like this it is wise to take precautions against fraud. If the scheme is operating on a large scale you may even want to consider the type of insurance against losing money that all credit unions have. The purchase of loanstock can look like ‘deposit taking’, which under the Banking Act is only meant to be done by properly established banks. In order to avoid falling foul of this legislation, you need to ensure that you do not make ‘repeated issues of loanstock with similar conditions’. For this reason, we would advise using loanstock only to start up your enterprise, and not as a long term source of finance. We can provide a loanstock pack, including forms, certificates, loanstock register and model conditions -get in touch for more details.

Another kind of unsecured credit is from a Local Exchange Trading Scheme. These are now quite common and offer a wide range of goods and services. Although you should remember your obligation to repay your commitment to the community, it is interest free and available without the need for application or negotiation of terms. If you were to default, the people providing services to you would have been credited -but it might damage the credibility of the scheme. To find your nearest scheme, contact LETSlink UK.

The following are notes that need expanding on.

[box on financing for Springhill - notes from Lancaster Cohousing conference]

A word on sugar mummies and daddies.

sweat equity

Accounts

How to do book-keeping - see part on RECORDS

Cash Flows

[edit] Degrees of income sharing

income sharing

There are quite a few communities in this country which income share, but almost all of them are religious. Take for example the Bruderhof communities, in which two or three hundred people live together and work together and have all their needs met by income generated from their own business (at Darvell in Sussex, a successful play furniture workshop called Community Playthings brings in money to finance the community). For most of the participants in this community, life can feel money-free: most needs are catered for on site and only those who deal with supplying the community with its outside material needs actually use money. (need to check this - email David?)

Monasteries and such like are traditionally income sharing, with all the needs of the monks or nuns met by the order. Minimum wage problems?

Income sharing in secular communities was more common during the 1970s and 80s... so why did it die out? Thatcherism? richer communards? bigger diversity in income of communards? Less social idealism? Apparent need for more personal freedom, fuelled by advertising/the media?

Nowadays, Corani and Erraid are the only secular income-sharing communities listed in Diggers & Dreamers. Corani is part of a larger income-sharing group called ‘snowball’, which has a detailed running structure, worked out over many years.

Examples of large, effective income pooling communities in other countries include Twin Oaks in America and Svanholm in Denmark.

More informal ways of income sharing include having a sliding scale for rent, depending on income, as found at Birchwood, or sharing profits from B&B at Beech Hill by using them for fun group activities such as a weekend away or a party.

Another type of income sharing is the subsidising of dependants by providing cheaper rent for them in housing co-op set-ups.

Laurieston story?

Pool percentage of income to run house

Birchwood fairly relaxed

Sweat equity

saving money

The big savings which can be made by living in community are made several ways: economy of scale, sharing and use of member’s skills.

Skills include gardening/growing/farming, DIY, car maintenance, food processing (baking, preservation etc), cleaning, fixing etc.

Sharing a vehicle can save a lot of money, although there might be bigger maintenance costs. Other shared stuff might include such things as white goods, tools, kitchen equipment, cleaning equipment, garden machinery, polytunnels and office equipment. And what you save by sharing those things, you can spend on things you might not otherwise afford, such as musical instruments, play structures, a dressing-up wardrobe, canoes, a sauna, an art studio, a workshop, a yurt, a cinema, a swimming pool or a bar!

Economy of scale comes in with things like food ordering, buying wood, making your own biodiesel, or putting up a good-sized wind generator.

At Hockerton, members undertake to put in some hours each week which aim to reduce the need for a cash income (for example, growing vegetables).

[edit] Business planning

Before you start to plan anything, it will help to be really clear on where you want to get to. Why are you doing this? What do you hope to achieve?

Keep those goals in mind as you plan. Keep referring back to them. Put a copy on the wall. Spend some time getting the phrasing right. Make a collage with images of your ideal. Think about not only what you want to achieve, but the process of achieving - will the end justify the means??? Is the journey more important than the destination? Think about the triple bottom line: social/environmental/financial. And think about a realistic time-scale.

This type of thinking not only helps with planning the project, but is critical in creating the collective vision. And, speaking of that, how do you go about getting your vision together? Well, see (chap 2??) about creating your vision [should this bit be offset in a little box?]. But when you are planning, when should you involve everyone, and when a smaller group? A possibility is that you could continue discussing setting up a community or cohousing project forever, with a gradual change in membership which meant that you endlessly renegotiated your vision but never actually did anything. To avoid this scenario, and start actioning things, a good idea is to call a meeting to discuss ‘non-negotiables’. What does this mean? These are the issues which you think will affect whether you could actually live together with other people in the group or a future group. Such issues might include numbers, ideology, spirituality, inclusiveness, diet and location. In fact, such a discussion may take a few meetings, but you will need to fix the main issues, perhaps over two or three meetings.

Once these items are largely fixed, it will be possible for a small group or series of subgroups to work on aspects of the overall plan, whether it’s raising finances or looking for land.

One possible map for this experience is shown here. The hourglass shape shows how the people involved narrows during the initial setting-up process. Although such a process is not inevitable, it is quite common, since a smaller group out of all the initial dreamers will have the commitment to dig to produce legal structures, financial structures and plans for physical structures.

Since such a process results in major bonding (or falling-out!) between members of the core group, when the time is right to open up the membership to the structures now in place, this may have to be done carefully, so that the core group is not overwhelmed, and has time to integrate the newcomers (or oldcomers: the core group may want to produce updates to keep the wider group informed). If there is a core group and a wider group who hope to join the community, but haven’t the time to help with the work of setting up, it seems only fair that the core group record their hours of work, with some form of payback or sweat equity in mind.

This is a balancing act - planning needs to be participatory (finally, an aspect the business world has picked up on...”Civilization is a slow process of adopting the ideas of minorities.” - Herbert Prochnow), visionary and pragmatic. An approach which allows for honest discussion, graceful use of people’s strengths, appreciation of support, awareness of people’s limits and a grounding in humour will make the journey easier.

The risk analysis shown is part of an in-depth investigation by one cohousing group setting up, to try to determine what would be most likely to go wrong, and therefore what could be done to mitigate against this. The items came from a brainstorming session and give a flavour of the sort of issues you might be dealing with in a similar situation.

“Oh no! We never made a plan and we’re halfway through!”

It’s never too late! - in fact, you should update it, not forget about it. Having a plan at the very least gives you the option as to whether you drift or move purposefully. And it can be very gratifying with a daunting project to compare it with reality and see that - yes! - progress has been made.

MAKING PLANS

There probably won’t be one plan, but a few. Or phases of an overall plan. Or, in the case of a housing co-op with a business, one business plan for the housing co-op (where the rental aspect is a ‘business’), and the worker’s co-op having its own business plan.

The simplest plans consist of a list of things to do in the right order. For example, Radical Routes offers a straightforward overview with the following stages, each with a paragraph on how to do it, for setting up a housing co-op:

1. Form a group

2. Raise some money

3. Register your co-op

4. Record-keeping and documentation

5. Issue loan stock

6. Look at houses

7. Draw up a business plan

8. Get a mortgage

9. Buy the house and move in

(For the full version of this plan, go to www.radicalroutes.org.uk)

If you are into efficiency, you might consider using a Gantt chart (see example), beloved of the project management aspect of business planning, especially if you have to fit this new creative enterprise around an already busy life. There is tons of information available on the web or in management books about this type of planning.

TN 4-stage plan: dreaming/planning/doing/celebrating

Why write a Business Plan? (upstart?)

There are two audiences for your business plan - external and internal. You will need to address an external audience if you are asking for loans or grants, and the funder needs to be convinced that your plan is workable. This is the usual reason for writing a business plan, but the internal audience is very nearly as important.

A business plan can give you very useful information as to whether your business idea is viable. It can help you to clarify your goals and your shared values, and it helps you to anticipate problems that may come along. It also gives you a yardstick by which you can measure your progress. It may also be useful information for anyone thinking of joining.

As you fine tune the plan, you will get a clearer idea of what resources you require and when you will need them.

The Process

It is crucial that the business plan is the shared goal of the organisation - not just one person’s idea. Although it may be necessary to delegate the drafting, consultation should involve everyone at some stage. The process of collecting ideas, through brainstorms, visioning, consensus building and questionnaires should begin right away - before the first draft. Only that way can you be sure that everyone will see something of themselves in the finished product. As well as full members, are there volunteers, probationary members or supporters whose ideas you could include?

However, the process will need a co-ordinator to pull all these threads together, and monitor progress. Very often, the business plan is what the whole organisation is waiting on. It is very important that the process is not allowed to flag. Allocate responsibility clearly; set firm (but realistic) deadlines for contributions. In a sense, you need to have in your head a plan for the plan - consultation for so long, first draft circulated on such a date, redrafting to take place whenever. Finally, there will need to be a clear point of decision when everyone has the document in front of them and consents to it being adopted. A meeting is usually the best way to do this.

Once it has been adopted, it will need to be modified in the light of changing circumstances, re-evaluated and revised. There should be a clear understanding of when this will happen when it is adopted - conflict can arise if some people believe it is set in stone where others think it is a convenient fiction for one-off use.

What the Business Plan should include

Aims

This is a statement of what your organisation is about. This is general, talking about your values and ideals, but also connected to the real world. What are the needs, and the community, that you serve?

Objectives

This is what you do in order to meet your aims. They are tangible, achievable targets that you are working towards. As you enterprise develops, you may achieve your objectives and you will need to adopt new ones; but unless your philosophy changes, you aims will remain the same.

History and Context

This puts the background in which explains where you are coming from. It will include general information about the area you are operating in, such as geographical, demographic, or political information. If other organisations have been involved in bringing the project about, this would be the place to mention them.

If your organisation has been in existence a while, it is worth including a potted history, with emphasis on your achievements. You should certainly list the present personnel, and if it is a new project it is their skills and their experience that will be the basis for this.

Personnel

For many readers - particularly those who know co-ops - this is the section that will be studied with the most interest. Who are the real people behind the company name and image? Do they have the experience, the skills and the will to make the project succeed? How long have they been involved for, and to what extent is there a team spirit binding them together? This is your opportunity to catalogue the things you have rather than those you are waiting for, and you should make the most of your talents and background. Avoid exaggerations that you can’t live up to later, and don’t be ashamed of any relevant facts - just present them in a constructive, positive way.

Also, think a bit about whether you may want to recruit new members in the future. This might be because you want to expand, but it might also be to replace an existing member who is unexpectedly leaving. Where will you advertise? How much will it cost to recruit and train them? Do you have an equal opportunities policy?

Current Activities

If you are a new group this may not apply (unless the members had been meting similar needs in other ways). If you are an existing group, this will be a summary of the projects that you have underway right now, the services you are providing, and the present level of operations. You should link these in to your aims and objectives, and set the scene so that it is clear how the new projects contained in the business plan will logically build on you present activities.

Development Plan

This is the part where you say what is happening in the business plan that is new. If you are looking for finance, this is what you are seeking to fund. You should be clear and brief, but you should ensure that a full picture of the new service comes across clearly. Be cautious - don’t start listing every idea that you have had if it doesn’t actually feature in the plan or affect the finance you are looking for. Be focused, and talk about the things that you definitely intend to do.

SWOT Analysis

Although optional, this is increasingly expected. It is a four part list intended to encourage you to be realistic and imaginative about where you are at and where you might get to. The four parts are:

Strengths - what are the assets that you have in terms of people, resources, skills or property?

Weaknesses - what do you lack, compared to others in the field or relative to the need to be met?

Opportunities - what is there in your environment that presents openings or benefits to you?

Threats - what do you see around that might impede your project and get in the way?

This is an excellent subject for a brainstorm in your group - it works best when people are able to open up their imaginations, and be both optimistic and pessimistic at the same time.

PESTLE Analysis

This is another way of breaking down the situation you are in, and looking for the main chances.

PESTLE is an acronym for political, economic, social, technological, legal and environmental. For each of these six categories, think about the changing world around you, and how it will affect your business.

Market Analysis

This is not optional. This is where you explain why you believe there is a demand for the service you are offering. What else is around, what past experience have you had of this market, what is different about your product, who is your likely audience, what makes you think they exist in sufficient numbers? You don’t have to have gone out door to door questioning people, but you do have to show that you have thought carefully about who will take up your service.

Marketing

Once you know they are out there, you still have to reach them. What form of advertising will you use, and type of communication, and how will you ensure that you reach everyone in your target audience (this is a good place to think about equal opportunities).

Operations

This is about the internal structure of your organisation. You should state your legal status, what committees or bodies exist, where and how decisions are taken, and how new members join. What divisions of labour are there - what posts and what titles? You should include brief job descriptions for any new posts.

This is also about the physical resources you have or need - the tools you work with, and the environment you work from. Where are you based, or where will you be based? How do you store information and records (if that is an important part of your work)?

How do you resolve disputes, and what are the procedures for appeal and redress? What are you policies regarding equal opportunities, health and safety and other forms of protection for your members?

Action Plan

This should show a co-ordinated programme of goals and timescales, so that you can see what needs to be done by when. Break down tasks as far as reasonably possible into separate stages, and make sure that it all comes in the right order without bottlenecks or holdups. Clearly indicate any ‘milestones’ - events that constitute turning points or significant achievements.

Terms of Finance

Where you are looking for any sort of outside funding or resources, you need to state clearly what the conditions are that you’re looking for. What interest, what repayments, what security and guarantees?

Holiday and Sickness Cover

This is very easy to miss out, but will prove absolutely crucial once you are trading. You will need holidays, otherwise your members will burn out; and you must be sure that if you are struck by illness - mild or serious - it does not bring the whole co-op down. Make some rough estimates of the time and money that will be lost, and set aside a budget to cover it.

Evaluation and Monitoring

How will you know if you have achieved your aims? You will want some fairly tangible targets, and mechanisms for monitoring. It is no excuse to say ‘you can’t measure the good we hope to achieve’ - after all, if you can’t measure it, why should anyone believe you have done it? Every organisation needs good feedback mechanisms so that achievements are celebrated and shortcomings remedied.

The Accounts

You will be expected to provide some well laid out financial information to back up all this text. You can lay this out by hand, but a computer running a simple spreadsheet programme will make your task massively easier. If you don’t know how to use such programmes, make a priority of getting some advice - these kinds of plans needn’t involve any rocket science, so you should only need to understand the basics.

Past accounts

If you have accounts for past financial years, ideally audited by someone outside the organisation, it is well worth including them. They establish your track record.

Budget

This is the breakdown of all the expenditure and income that comes at the beginning of your project. Make a comprehensive list of all the things you will need, such as equipment, advertising, furniture, properties and improvements and total its value. Compare that with the money coming in from various sources - are you definitely going to raise enough money to get the project underway?

Cost Analysis

Now examine a typical month in the life of you project when it is up and running. What are the regular sources of income, and how do they compare with ongoing expenditure (don’t forget NI and pension contributions, sickness cover, insurance, training, rates, maintenance, volunteers expenses, legal fees, recruitment costs...). You should be looking for a comfortable surplus of income over expenditure (around 10%, usually). Are you going to make money on the project? If you are providing housing, it is usual to allow for an imaginary expenditure on ‘voids’, meaning a loss of income through rooms being empty. You might set this at around 5% of rental income.

Cash Flow

The cash flow takes the different flows of money and tries to predict when they will happen, so that a month by month picture of the organisation’s bank balance emerges for the first year of operation. As you do this, you will find that income often comes in too late to meet expenditure, or that the cycles do not mesh very well, and that this leads to cash flow problems. Possible remedies: overdrafts, raising more finance, deferring payments, demanding income in advance. Are you going to keep going through the difficult times?

Profit and Loss

This is only necessary for any enterprise with significant amounts of capital goods (tools, computers, machinery, stock) that loses value over time (as opposed to buildings, which generally don’t if they are reasonably well looked after). A typical rate of depreciation is 25% of the value of your assets over a year. Add this on to your surplus for each period, and you can say whether the value of your enterprise is rising or falling over time.

For more information, you could also check out the UpStart briefing on financial planning.

[edit] Types of decision making

As a group, you will need to make decisions together, and how you start going about this process will probably be coloured by your past experiences of meetings. But communities have been at the forefront of meeting and decision-making techniques for decades - we have the technology! Many extremely effective methods, now adopted by the business world, began life in an atmosphere of floor cushions and rollie smoke.

Remember that your aim is to reach agreement within your group. There are no prescribed methods, so you can use whatever works for you.

You also need to think about long and short-term decision-making; is the decision for yourself or for the community? Personal comfort v long-term aims. Jam today or tomorrow?

Although community meetings do sometimes have a reputation for being long-winded and circuitous, there is really no need for this to be the case if participants are willing to use the tools at hand. Here we will look at some of those tools, starting with the heavy-weight champion of co-operative decision-making: consensus - favoured by egalitarian communities all over the world.

Whatever method of decision-making you use, it is ABSOLUTELY VITAL that people know what it is before they start the meeting; it’s bad enough when no-one knows how a decision is going to be reached - but terrible if only a few know the ‘rules of the game’ and everyone else is disempowered.

Consensus

Here is a definition of it:

Consensus decision-making aims to reach agreement by taking everybody’s view into account. Even though this may be a longer process than a simple vote, people should be willing to go with the decision, even if they don’t like it, which means that the process of turning the decision into action should be wholehearted and is less likely to be sabotaged.

How Does It Work?

Often, decisions will start life as a ‘why don’t we...?’. This may come up around the kitchen table, or in a meeting as a response to a problem. If such a proposal needs no research, it can enter straight into the consensus process but, more often than not, a proposal will need some research before it is brought to a meeting. Ideally, especially if the information is complex, such research should be made available to everyone before the meeting, in order to save valuable meeting time. At the meeting the proposal is put forward and if facts are lacking, a person or subgroup is given the job of completing the research. There’s nothing worse than sitting around guessing about stuff that you don’t have the facts for - it’s a complete waste of time!

Once everyone has had a chance to digest the facts and is ready to discuss the topic, the process can begin, using whatever style of meeting is appropriate to your group (eg ‘rounds’, talking stick, hats or other methods: see Sustaining the dream - Meetings). Essentially, the process will unfold as a reciprocating dialogue involving concerns, fears, hopes, expectations, assumptions, seeing through assumptions, solutions, adjustments and improvements. The chair or facilitator should keep an eye on the time allotted for the discussion, whether the discussion is being dominated by certain people, bringing the discussion back on track after attempted diversions and tangents, the emotional landscape, repetition, whether to call for input from certain people, or whether to ask for a ‘round’ (quick input from everybody, one at a time), whether to adjourn for a cup of tea etc. Such responsibility might mean that the facilitator may not be able to concentrate on their own input to the discussion, and they may hand over to someone else while they have their say. If it is possible to find a neutral person to facilitate the discussion, so much the better: in particularly difficult situations, such as a breakdown of the group, you may need to bring in an outside facilitator. In experienced groups tackling day-to-day issues, some of the facilitator jobs can spontaneously emerge from the group.

At some point, the facilitator (or someone else) will test for consensus by asking the group whether it feels consensus has been reached. This is an ideal opportunity to summarise the position reached so far and get some perspective. If consensus has been reached, the decision should be carefully recorded in the minutes, and read out for confirmation if needed. If no consensus has been reached, but the time is up, the matter should be put off to the next meeting - perhaps with some brief notes made if necessary.

What happens if I don’t agree with the proposal? Well, there are two types of disagreement; there is the ‘I don’t agree, but I can live with it’ type, and then there is the ‘I don’t agree and if this goes through I think I will have to leave the group’ type. With the former you can ‘stand aside’ so that the rest of the group can make and action a decision. With the latter you can either block the decision or leave the group, but this should not be taken lightly and only used for extremely important issues where you feel that the very foundations or underlying principles of what the group is about are being attacked. You need to ask yourself whether your concerns are self-serving or genuinely important for the group. Where consensus runs well, blocking almost never occurs; years pass without its use.

It is important to voice your concerns early and clearly so that those concerns can be dealt with by the group. And this is where the honesty bit comes in: you need to be honest with yourself as well as the group and ask yourself how important is this issue to me really? It is not necessary to have input into every item on the agenda if you don’t feel very strongly or your views are held by other people too; you can simply say ‘I feel the same as X’ and leave it at that. It is a common beginner’s attitude that - giddy with collective control - you feel that you must exercise your expression on every single issue which arises. This can make meetings unnecessarily long.

Vital for consensus to work are a number of things: people must come to the meeting with a sense of trust in the process and in the group, each individual must be prepared to speak honestly and clearly and each individual must be open to new ideas and viewpoints. The combined feeling of empowerment and humbleness which good consensus can engender is fantastic and a real source of personal growth.

When not to use consensus (from Starhawk, Truth or Dare)

When there is no group in mind

A group thinking process cannot work effectively unless the group is cohesive enough to generate shared attitudes and perceptions. When deep divisions exist within a groups bonding over their individual desires, consensus becomes an exercise in frustration.

When there are no good choices

Consensus process can help a group find the best possible solution to a problem, but it is not an effective way to make either-or-choices between evils, for members will never be able to agree which is worse. If the group has to choose between being shot and hung, flip a coin. When a group gets bogged down trying to make a decision, stop for a moment and consider: Are we blocked because we are given an intolerable situation? Are we being given the illusion, but not the reality, of choice? Might our most empowering act be to refuse to participate in this farce?

When they can see the whites of your eyes

In emergencies, in situations where urgent and immediate action is necessary, appointing a temporary leader may be the wisest course of action.

When the issue is trivial

I have known groups to devote half an hour to trying to decide by consensus whether to spend forty minutes or a full hour at lunch. Remember consensus is a thinking process. Where there is nothing to think about, flip a coin.

When the group has insufficient information

When you’re lost in the hills, and no one knows the way home, you cannot figure out how to get there by consensus. Send out scouts. Ask: Do we have the information we need to have to solve this problem? Can we get it?

As a group, you may not want to use consensus. If this is due to unfamiliarity, we strongly suggest that you get training. Organisations such as UpStart or Seeds for Change will come to your group and teach you how to use consensus properly - a very worthwhile investment - in fact probably the best investment your group will ever make.

For more detail we highly recommend the Seeds for Change website (www.seedsforchange.org.uk) for an excellent overview of consensus and meeting techniques.

Other decision-making methods

Some groups have different decision-making processes stacked up. For example, if a couple of attempts at consensus fail, then they turn to a voting system. If a loggerheads situation develops, the next step is mediation followed by arbitration! Even if you don’t go this far, you should think of worst-case scenarios with all your organisational structures, because that’s when you will be really glad you have them in place.

‘Consensus-1’ (‘consensus minus one’) This is a strategy developed by those stuck in situations of constant blocking by single individuals, whereby one person is unable to block a proposal by themselves. Since you can’t really have consensus which ignores any single person’s input, it isn’t really consensus. But it might work for you.

Voting

The best-known form of group decision-making is majority voting: after a proposal and discussion a vote is taken, with a previously-arranged majority (whether 51%, 95% or anything in between) winning the decision. This is a much ‘rougher’ approach to decision-making, and although it may be quick, it may leave a large proportion of the group dissatisfied (at worst almost half!). In addition, it can take quite a while to word a proposal on which people are happy to vote (a weapon used in referenda is a carefully crafted proposal which tries to link two issues, which should never be allowed in a voting system!).

There are other voting systems such as proportional which can be used when there are more than two options to choose between. See Wikipedia.

More techniques

Unless you are a very small group or extremely in tune with one another, you soon realise that it is impossible to discuss everything in one big meeting. Most small to medium communities (<50 adults) tend to have a combination of big meetings with all or most members present, and smaller subgroups which handle specific tasks such as maintenance or finance. These different groups can have completely different ways of meeting if they want to. PIC - tarot (and other methods to open up ideas -> holiday). David Michael -> Tony Buzan.

Larger communities tend towards ‘council’ organisation with representatives serving in different decision-making groups which deal with different aspects of the community and long- and short-term planning. Planners at Twin Oaks: Focalisers at Findhorn. Trustees: Monkton Wyld, Beech Hill, Othona.

Some Beech Hill Tools

At Beech Hill Community in Devon, several tools have been developed over the years to try to cut down on meeting time and make decision-making more efficient.

An early contender was the concept of ‘brown envelopes’ - recycled A4 manilla envelopes with a title and everybody’s names on the back. Inside was a proposal with facts and pros and cons and some blank sheets of paper. It was put into someone’s pigeon-hole and they read it, commented on it, ticked their name and passed it on to an unticked name. The idea was that people could read it in their own time and comment on it before it went to a meeting. In reality, it got buried in a pigeon-hole or lost under someone’s bed and it would take weeks or months to travel around the whole community. Also, the first few people would miss the comments of the later people. It was pretty disastrous and was eventually modified into the ‘clip-board’ - a clip-board kept in the kitchen on a special hook with proposals and room for comments on it. At least this didn’t get lost - but both systems favoured those at ease with expressing themselves with writing. The clip-board is still used for current information, but not so much for comments. The newest and by far the most successful addition to the tool collection is the ‘dazzle file’ - a ring-file (with a dazzling holographic cover) with photocopied pages in with a space for a proposition, perhaps comments, and then a grid with everybody’s names and the following options: ‘yes’, ‘no’, ‘don’t mind’, ‘need more info’ and ‘take to a meeting’. By using this, many things can be done or ditched without going anywhere near a meeting!

[copy of page]

Hi Pulled this off the Braziers Website thought it might be interesting in the decsion making section Chris

Braziers’ Method

Braziers has developed a series of methods for meetings which are designed to allow everyone to state their ideas and feelings. Meetings are either ‘sensory’ or ‘executive’.

Sensory meetings

The purpose of a Sensory meeting is to explore, evaluate and gain understanding of matters concerning the community and its members, and sometimes wider social issues, but not to make decisions. A typical sensory meeting begins with silence, and continues with a ‘reporting in’ round. Each person speaks in turn and contributes what they feel is appropriate from personal experience. Interrupting, or otherwise breaking the discipline of the round, is considered unacceptable. This method enables the group to build its long term identity, to learn to trust each other and to gain support and courage.

When a decision is required, a body called the sensory committee discusses all the available aspects of issues to be decided, supplementing factual background with feelings, reactions and possible repercussions that would result from different choices. Its findings are reported to the Committee of Management.

Executive meetings

Meetings of the Committee of Management are termed executive. These take place once a month, and decisions are made which take into account the results of discussions of the Sensory committee, which meets three times a month. Most of the time these decisions are reached through consensus.

If the Committee of Management is unable to agree on a matter, it is referred back to the Sensory Committee for further discussion and appraisal.

This dual system has formed the basis of the theory and practice of the governance of Braziers since its beginning in 1950. Instead of actions being directed by one executive body with overall power, the function of decision-making is shared by the two committees. This enables people with differing personalities and strengths to collaborate more effectively. It allows time for personal development and a chance for individuals to rethink their position, which increases the possibility of achieving a more integrated corporate view.

Decision-making - a check-list from UpStart

- Who is legally able to make decisions. Is this explicit.(the legal documentation)?

- How are you to remove this power from a member (see primary rules)?

- How do you give that power to someone.(see primary rules)?

- What information/training are you to give to a new member (Primary rules, policy document, procedures, training)?

- How do you make decisions (when by consensus, when by voting)?

- Which decisions are made when (different types of meeting - business, planning, review, creative thinking, informal decision-making)?

- How are decision recorded (minutes, long-term decisions in a policy document)?

- What if there is major disagreement (mediation, arbitration)?

- How are members made accountable for decisions (names in minutes, reading minutes out, checking minutes before they are written down)?

[edit] Why have rules?

Wouldn’t it be great if we didn’t need rules? Well, yes, but we would all need to be clones to feel the same way about everything. Rules are the boundaries we make for ourselves, agreed to by that group of people, arrived at (hopefully) by discussion and consensus.

Rules are strange things... we each have our own ethics which change as we experience life, but these are internal and rarely examined explicitly. But when a few people get together to live, this internal system rubs up against others’ systems via the agent of action, by which we live out our ethics. This process can be the most inspiring, frightening, passionate, frustrating, humbling, interesting, exhausting, energising and challenging aspect of communal living.

Rules limit the amount of friction between people because a difficulty has been discussed, and a compromise arrived at which does not have to be renegotiated every time that action occurs.

A rule for everything can be stifling, but a complete absence of rules can lead to a lot of conflict too (see ‘The Tyranny of Structurelessness’ - http://uic.edu/orgs/cwluherstory/jofreeman/joreen/tyranny.htm). A few simple rules in contentious areas can ease day-to-day living enormously. Even if you don’t invoke a rule, if you have worked it out in advance, it acts as a safety-net, should things get out of hand.

There are basically two types of rules which communities need to use: ‘external’ (such as the constitution [primary rules, Memorandum & Articles], loan agreements, tenancies etc which generally are part of a nation-wide set of legal rules), and ‘internal’, (including ‘secondary rules’) which serve only the interests of the group.

The ‘external’ rules are covered in the part of this chapter called ‘Legal Structures’. Here is a checklist from UpStart about some of the issues which should be looked at under the heading of ‘internal’ rules.

First, though, a word about written and unwritten rules. (please put in some words here!)

Internal Structures (upstart)

Running an organisation however large or small involves having written agreements about:

- some clearly defined ways of making decisions

- how members are to act towards each other and the outside world

- what they are trying to achieve.

Often there are some issues which are forgotten and not responded to and can therefore cause conflict when they arise. The purpose of this briefing sheet is to act as a checklist of things which you should least have considered before you start working together. How you respond to the questions will need to be decided by you. The response will need to be effective while not over stretching your time and resources.

Policies/agreements - a check-list from UpStart

- Do you have a mission statement, statement of aims and if so when are you to periodically look at this and review it?

- Do you have a policy document/secondary rules and when is it reviewed and added to?

- Do you have policies on the following and agreement on what should happen if they are not followed?

smoking, drugs, verbal or physical violence, sexism, racism, disabled access, equal opportunities, vegetarian/veganism, ethics of purchasing policy, ecological considerations - heating, insulation etc., and other social/political issues.

Attendance at meeting, level of pay, employment contracts etc, resolutions of disputes between a member and the co-op.?

- What division of roles and responsibilities are there and who is responsible for how long and how are new people assigned to them. Are these responsibilities written down, are people taking them on briefed, how are they accountable to the whole co-op?

- Do you have the following aims written down?

What turnover you want to reach by when?

What wages you want to have by when? The number of members and workers waged/unwaged by when?

The level of challenge, stress, and enjoyment to be experienced by when?

What external ethical effects you what to have achieved by when (social aims)

Other business or social aims?

- How are you planning to implement, review and reset these aims?

There may be other issues you may wish to add as this is not an exhaustive list. Ideally you should have collectively agreed response to all these questions and this should be set down your initial policy document. Even if you are unclear, don’t know or can’t agree on an issue this should also be noted down. Often conflict arises because someone believes there was agreement on an issue when in fact there wasn’t! For example if there was no initial consensus on smoking the policy document could read: “The co-op at present has no consensus on a policy on smoking in the cafe area. This will be discussed again at April’s policy meeting”.

 The policy document should be given to each member and any joining member and updated following each policy making meeting. A member should be responsible for doing this and therefore accountable to the group.

[edit] Tenancy agreements

This is a stub. Tenancy agreements can be long, full of legalistic jargon and biased in favour of the 'landlord' - on the other hand they can be short and simple, written in plain english and based on principles of fairness and co-operation. If you have examples of good agreements or any tips, or pitfalls to try and avoid please add here.

[edit] Records

It’s absolutely vital to keep up-to-date, well-organised records which everybody knows their way around so that they can access the information they need instantly. As soon as you can find the space, set yourselves up with an office with a desk or table big enough for two or three people to work at, stationary supplies including scrap paper and recycled envelopes, tons of biros, a couple of calculators, a stapler, a year planner, a computer if you want, good lighting, adequate heating (sitting doing office work can get very cold!), some shelving and if you can afford it, contemplate getting a photocopier (very expensive, but if you are a long way from another photocopier, it can save loads of trips and time).

Get a filing cabinet (4-drawer) with hanging folders which clearly show what is inside each one (they should have a pattern like hatching on the inside surfaces, so that people don’t drop documents into the spaces between folders!) and with flexible labels which won’t break and fall off the hanging folders.

The filing cabinet is like a physical manifestation of the organisational structures you have put in place.

One drawer should be designated for the most important documents, and another for day-to-day money paraphernalia (statements, correspondence with the bank, books (ledgers or hard copies of spreadsheets), spare chequebooks, sorted receipts, balance book, cash-flows etc). I’ll cover this one afterwards.

The most important documents (in rough order of importance) are:

Your primary rules (called Memorandum and Articles, or ‘Mem & Arts’, if you are a limited company).

Members(Up)

A register of members is a good idea, so that dates of moving in, joining, and leaving are all recorded. You should also keep tabs on who has paid their £1 share capital, and when that share capital has been cancelled (no, you don´t ever refund it). This might also be a good place to record members’ next of kin or who they might want contacted in case of emergency.

Your secondary rules if you choose to make some.

Decisions (minutes book)

Policies

Policies/agreements - a check-list from UpStart

- Do you have a mission statement, statement of aims and if so when are you to periodically look at this and review it?

- Do you have a policy document/secondary rules and when is it reviewed and added to?

- Do you have policies on the following and agreement on what should happen if they are not followed?

smoking, drugs, verbal or physical violence, sexism, racism, disabled access, equal opportunities, vegetarian/veganism, ethics of purchasing policy, ecological considerations - heating, insulation etc., and other social/political issues.

Attendance at meeting, level of pay, employment contracts etc, resolutions of disputes between a member and the co-op.?

- What division of roles and responsibilities are there and who is responsible for how long and how are new people assigned to them. Are these responsibilities written down, are people taking them on briefed, how are they accountable to the whole co-op?

- Do you have the following aims written down?

What turnover you want to reach by when?

What wages you want to have by when? The number of members and workers waged/unwaged by when?

The level of challenge, stress, and enjoyment to be experienced by when?

What external ethical effects you what to have achieved by when (social aims)

Other business or social aims?

- How are you planning to implement, review and reset these aims?

There may be other issues you may wish to add as this is not an exhaustive list. Ideally you should have collectively agreed response to all these questions and this should be set down your initial policy document. Even if you are unclear, don’t know or can’t agree on an issue this should also be noted down. Often conflict arises because someone believes there was agreement on an issue when in fact there wasn’t! For example if there was no initial consensus on smoking the policy document could read: “The co-op at present has no consensus on a policy on smoking in the cafe area. This will be discussed again at April’s policy meeting”.

 The policy document should be given to each member and any joining member and updated following each policy making meeting. A member should be responsible for doing this and therefore accountable to the group.

Accounts (from previous years)

Tenancy agreements, Leases

Rent book

Absolutely essential, yet it is remarkable how few co-ops keep these up to date. There are many ways to lay out a rent book - here is one suggestion:

Week beginning Name Rent due Rent paid Balance

[graphic give a ‘real’ example]

1/6/99 Fred 35.00 35.00 0

        Bill 35.00 33.20 -13.78

        Anna 60.00 -90.00

        Sarah 35.00 15.00

8/6/99 Fred 35.00 35.00 0

        Bill 35.00 33.20 -15.58

        Anna 60.00 260.00 110.00

        Sarah 35.00 100.00 80.00

A good way to computerise this would be a simple spreadsheet using Lotus or Excel.

Schedules of payment of loans, mortgages, service charges

Loanstock Register(Up)

If your community runs a loanstock scheme, it will be very, very important to keep a good record of all your liabilities to investors. You need two records - one of people, and one of certificates issued. If you use a computer database, you can just keep one record of all certificates, and sort by name to see a record of investors. Column headings would be Name, Address, Sum, Date, Interest, Cert no., 1990Int., Cert no, 1991 Int., Cert no., etc.

Guarantors and other supporters(Up)

If you have guarantors providing security for your loans, it is very good practice to stay in touch with them. Firstly, regular updates will reassure them that they are not in danger of being called upon; and secondly, if you do not keep your addresses up to date the burden will fall on a diminishing number of guarantors.

This is also worth doing for other supporters, or for prospective members. If you computerise the database, you can link it to a word processor and personalise letters to some or all of the people on the list.

‘How to Do Its’

A collection of instructions about how to do various collective tasks which aren’t obvious and/or are done so infrequently that you forget how to do them in between. (eg what you need to do in the AGM, what the strange subheadings in the accounts actually mean, how the phone bill is worked out, to how to do a wholefood order to how to put up the old army tent you take to festivals).

Certificates (eg Fire, chimney sweeping, gas, insurance etc)

Co-op Inventory, Manuals and Warranties (Up)

This may seem pedantic, but it has a number of uses. Firstly, you want to keep a list of all the co-op’s property so that tenants do not walk off with it, so that insurance forms can be correctly completed, and to make life easier for your accountant. We would also advise keeping tabs on members’ property that has been entered into communal use, so that people can be appropriately compensated if their posessions are lost, broken or worn as a result of their being used collectively. It is, of course, up to the individual co-op what form this compensation takes. The records should show what the value of item was when acquired, and any changes since (if the value suddenly reduces, or it is sold or otherwise disposed of). It may also be useful to identify where the object is normally kept.

Instruction manuals and warranties can get referred to quite often, so need to be easily accessible.

MONEY DRAWER

Book keeping

Keeping records of income and expenditure is essential if you want to know what your financial position is at any time. This is the raw data which you can use to create cash-flows, decide whether or not you can afford to borrow money or pay off a loan early, whether you need to put rents up or can afford to lower them, whether a large capital investment can be made, or whether you spend more on cleaning products than vegetable seeds.

A common way to organise this recording allows you to double-check things by having different sources of information. Thus you might pay for something with a cheque and the amount, date and payee are recorded on the stub. What you have paid for is also usually displayed on a receipt or invoice, which should be collected and stored monthly in envelopes with the month and year on. The balance book should be filled in with each cheque paid in or out of the bank account - this tells you exactly what is in the bank at any time, and helps to spot mistakes which the bank makes (yes, they do make mistakes - Beech Hill got £225 in compensation from the Co-op Bank one year for nine errors they made!). Then, there are the bank statements which show the ins and outs, usually monthly. Finally, there are the ‘books’ (ledgers or spreadsheets), which rely on these sources to create a comprehensive view of money in your organisation. These are the tools you use to assess changes over time, and differences between categories of spending/income.

Although this last paragraph may sound daunting if you haven’t done it before, in practical terms paying for something might go something like:

an invoice arrives, you fill out a cheque (one minute), go hunting around the house for another signatory, get distracted and have a cup of tea and a chat (twenty minutes), get back to the office, note the information and new balance in the balance book, and post the cheque (two minutes). (Possibilities for increases in efficiency are left as an exercise for the reader).

More of a problem are issues such as: which column should this expenditure come out of?; Should this item be paid for from more than one source (or column in the books), and if so, what should the split be?; Who will run the books, and how can new book-keepers be trained?; How can the money situation be kept as transparent and accessible as possible?; How tight a reign on money do you want?; How tight a reign on money does your lender want?; How often do you want to reassess your money position in relation to your business plan and cash-flows? (Although at the beginning of a project, you will be assessing money in quite a global way, once a community is established it is easy to get drawn into the day-to-day aspects of book-keeping rather than thinking about longer-term money planning.

Ledger or computer? It is more usual to use accounts software or spreadsheets these days than actual ledgers, although there are those who might argue that ledgers (large expensive books which have been ruled for accounting entries to suit your needs) are more user-friendly, easier to understand and ‘safer’ - but that depends on your level of trust in technology. UpStart recommend computerising the system - it will reduce the number of mistakes, be quicker to update and will allow you to answer questions about your finances more easily. In particular, they recommend Intuit’s Quicken as being a good piece of software for this. Either approach requires a series of columns, at least for outgoings; how many and what for will depend on how much you want to analyse your outgoings and especially if you have budgets for different aspects of communal life (eg gardens, maintenance, council tax etc etc).

Whatever your approach, keep it as simple as possible!

[ copy of real ledger ]