Agreement: Collective Finances

Context

This agreement defines how Enspiral handles money as a collective, specifically the funds in the accounts of Enspiral Foundation Ltd (“the Foundation”). Our goals are to ensure legal compliance, financial solvency, and operational reliability, make financial flows across the network as transparent as possible, and direct significant resources to discretionary funds to be decided through democratic participatory processes.

For the time being, we are operating on a simple formula of directing half our income into discretionary funds, and half into fixed costs (operational overheads) and reserves. Our intention is to keep overheads low and increase the proportion directed to discretionary funds in the future.

Income

The Foundation’s funds come from the following sources.

Venture Contributions

Enspiral ventures make voluntary financial contributions, usually on a monthly basis. Half a Venture’s contribution goes toward fixed costs and reserves, and half is allocated to Discretionary Funds through Cobudget. Ventures can opt for their funds to be added to their Venture’s Cobudget account, to be split equally among nominated individuals, or the venture may specify exact allocation amounts, to fund projects of their choice.

Contributor Contributions

Individuals in the network make a financial contribution to the Foundation at least annually, representing their choice to remain an Enspiral Contributor. The amount is variable, set by the contributor at their discretion (suggested amount is $100/year). Half of all contributor’s contribution goes toward fixed costs and reserves, and half is allocated to Discretionary Funds, where the contributor can use Cobudget to fund projects of their choice.

Variable Contributions The real time Variable Contribution process allows people to contribute to Enspiral Foundation and participate in Enspiral's Collaborative Funding process. It also allows existing Enspiral contributors to give more funds to Enspiral Foundation above and beyond the (suggested) $100 / year annual contribution. See more description on the Variable Contributions page

Other Income

The Foundation is a charitable entity not intended to bear commercial risk. However, from time to time other activities (such as serving as a fundholder for grants and projects) can result in income directly to the Foundation. Approval for such transactions is at the discretion of the Board. The Board and the people involved in bringing in the income agree how to distribute any resulting income between Normal Reserves and Discretionary Funds (via nominated users in Cobudget). These decisions and transactions are reported on the Financial Transparency page of the Handbook (as described below).

Expenditure

Money flowing through or held by the Foundation falls under the following categories.

Fixed Costs

Regular monthly financial commitments for expenses such as essential professional services and tools used by the network. Anyone is welcome to propose changes to fixed costs (which are reported in the Enspiral Handbook, see below). Formal approval of such requests requires a standard decision from Enspiral Members.

The Board is required to regularly review fixed costs and the aim is to keep these expenses as lean as possible. The Board is permitted to adjust fixed costs by up to 10% within a 12-month period without seeking approval from the network.

Discretionary Funds

We use a collaborative funding process through Cobudget to manage our discretionary funds. People get money to spend in the collaborative funding process through making Contributor and Venture contributions, half of which is allocated to them in Cobudget to fund projects they would like to support (the other half goes to fund Fixed Costs and Reserves). As a collective, we all share the responsibility to decide where to spend our resources, what to focus on, and what financial risks to take in pursuit of achieving our mission.

Emergency Fund

These funds cannot be spent except by the approval of the Board, and should only be accessed in exceptional circumstances. The amount in the Emergency Fund is determined by the Board (guideline is 3 months of Fixed Costs). The Board can replenish or increase the Emergency Fund as a priority ahead of other budget categories. Any use of the emergency funds or adjustments of the amount of emergency funds must be announced to the network in a timely manner.

Normal Reserves

Any funds not explicitly in Discretionary Funds, the Emergency Fund, or committed to another specific project are considered Normal Reserves — the savings in the Foundation’s bank accounts. These are used to pay for replenishing the Emergency Fund, or for special initiatives and larger projects.

Anyone is welcome to propose to spend Normal Reserves for a specific purpose. Approval of such requests requires a standard decision from Enspiral Members. Normal Reserves offer an additional cushion for unexpected expenses, and enable different possibilities that come from a large number of people making collective decisions about larger amounts of money (as distinct from individuals making a series of decisions about smaller amounts of money, which is our approach for Discretionary Funds).

Collaborative Funding

We make collective decisions about spending discretionary funds with a transparent and democratic processes called collaborative funding using software called Cobudget .

  • All Enspiral contributors are invited to use Cobudget, and are welcome to raise bucket ideas. Those holding money in Cobudget decide what buckets they want to contribute funds to at their discretion.
  • Payments from the Foundation for buckets are only made upon completion of work, reporting of the outcome, and receipt of an invoice from the payee.
  • Funded buckets must be completed within in 90 days, or else they will be cancelled. Catalysts and bucket sponsors can agree to variation and reasonable extensions to this time limit.
  • If cancelled after being funded, a bucket’s funds are sent to Normal Reserves.
  • For a bucket to move forward for funding, it must be clear who specifically will be responsible for delivering the work.
  • People carrying out work funded through Cobudget are expected to perform to the best of their abilities, and clearly communicate about their progress and the bucket outcomes.
  • Bucket funders are expected to use their funds responsibly, stepping beyond self-interest to make decisions on the basis of what’s best for the network as a whole.

Reporting

The Board is responsible for keeping up to date a Financial Transparency section of the Enspiral Handbook, which covers:

  • Overview of revenue (Contributions and Income)
  • Emergency Fund (current level and any expenditures)
  • Normal Reserves (current level and any expenditures)
  • Breakdown of current Fixed Costs
  • Overview of discretionary spending (Collaborative Funding)

Enspiral Foundation Ltd participates in quarterly venture reporting, which includes financial information.

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