NFP Gifting Criteria and Approval Process

Preamble

There are many difficulties in drawing up a set of criteria for gift recipient status (GRS) in an organisation which attempts to be inclusive and participatory for all its members. Hardly any two persons will have the sentiments as to whether a given list of organisations should or should not qualify.

We aim to support a broader range of organisations and activities than the government or Australian Tax Office. Some of the organisations we decide to fund may be seen by more conservative members as ‘rabble rousers’ or ratbags while others in the community may think the same organisations are the ones most in urgent need of, and deserving of, funding.

This document should be seen as a set of guidelines rather than a definitive, quasi-legal document.

The subtitle of this document is ‘Criteria and approval processes’. In most cases, approval for GRS applications will be determined by the board of directors on the basis of our criteria guidelines. In cases which are questionable or potentially controversial, the board will put it to the Coop membership to debate and vote on. This is a process. The Cooperative may in the future have a GRS selection committee which will be independent of the board.

The founding members of the Cooperative agreed that spiritual and religious organisations complying with a not-for-profit criteria qualifies for support, and that as a community we have no right to dismiss offhand any spiritual beliefs as rubbish. It is an associated aspect of a community that promotes inclusiveness and participation of members that we also endorse tolerance and difference of opinions that are not inherently anti-social.

Education is seen as a part of the spiritual life of society. Not-for-profit educational institutions are thus seen generally as eligible for GSR.

The Cooperative has as its mission and goals an economy which is environmentally sustainable and socially just. This has to be in the background of the GRS qualification. In so doing we will be, or should be, trying to vet the ‘opinions’ that stem from corporate propaganda through think tank funding, media blitzes, advertising and so on. We try to be responsive to the needs and concerns of individuals and not those of for-profit corporations.

What is a ‘not-for profit’

For the purposes of this guideline a ‘not-for profit’ (NFP) is an organisation that does not exist to create an income for its members or owners. To this end, any person drawing a remuneration from that organisation must do so in the form of wages, salaries or contract hire.

There is a further condition for being a NFP and that is that members have a direct say in running the organisation either in the form of policy making or indirectly through the voting for a board or management committee. ?

Not all NFPs will qualify for GRS but all GRS applicants must be a NFP.

Reliance on whistle blowers

We cannot oversee the ethics and propriety of all our GRS organisations. To this end the Cooperative welcomes whistle blowers to let us know of malpractices within any GRS organisation such as systemic abuse of the elderly or the young, fiscal impropriety and so on. Genuine whistle blowers will be support by the Cooperative with as much financial and other means as possible.

Organisations/activities that almost automatically qualify

The following is a sample list of the wide range of not-for-profit organisations that the Cooperative should have no difficulty in approving for GRS. The directors may choose to deny an applicant for specific reasons.

  • Schools and educational institutions. This includes private and public schools.
  • Registered charities
  • Soup kitchens, shelter for the homeless, women’s refuge
  • NDIS providers
  • Churches and places of worship
  • Neighbourhood centres
  • Community gardens and gardening groups
  • Music and arts festivals
  • Environmental regeneration and awareness promotion
  • Community energy or resource sharing groups; recycling projects
  • Affordable housing groups
  • Health awareness promotion.

Financial reporting/auditing requirements

TBD

Extra conditions and exclusions

  • GRS organisations must declare any sources of corporate funding. This condition is to ensure that the Cooperative is not funding an organisation which is a front for corporate lobbying. The board of directors reserve the right to ask for such information as a condition of funding.
  • Funding will be denied any religious organisation which is a ‘cult’ – a cult being an organisation which will not easily let its members leave without a form of social ostracising such as barring contacts with family members.
  • Funding will be denied any organisations that have a policy of inciting racial and political violence either by funding or speech/literature/video.

Discretionary funding

Some community organisations and activities may fall outside our GSR criteria guidelines for a number of reasons – they are too small or informal to have a legal structure; the project may be a one-off; they are too newly formed to become formally organised; etcetera. In such cases, the directors may choose to exercise a right to use its discretion to fund such organisations. Such discretionary funding may not be more than 5% of the total tax revenue.

Where an application is controversial

There will be many instances where an applicant will be highly controversial or debatable as to whether it deserves community funding. Say for instance the coalition to stop the Adani Coalmine project in Queensland. For a lot of people this will be a no-brainer if we truly live up to our aspiration to create an environmentally sustainable economy; for others it presents a loss of jobs and opportunities etcetera. If the directors were to make a call on this, members and potential members may develop a strong antipathy towards the directors and perhaps also to the Cooperative as a whole. However if we let the community decide, no-one can dispute that the selection process is fair, participatory and inclusive.

In such instances, the board will put it to the members for a vote and the outcome will be determined in a similar process to our ‘direct democracy’ voting. In other words, if more than two-thirds of the members that vote are in favour of an applicant, that applicant is approved for GRS.

It also goes that members may put up a petition to disbar an organisation from GRS and overturn a directors’ approved decision.

Transaction Tax

In the national economy, a transaction tax would be a flat rate tax on every monetary transaction with only a few minor exceptions such as transfers within a family unit. No costs or expense s by businesses will be tax deductible. Purchases of things like shares and currencies will also incur this tax (which pretty much wipes out the speculative transfers of capitalism). In the FEC economy we apply this tax to transfers between members so that we as a collective can do very good and powerful things with it. For marketing reasons, we have renamed this tax to ‘community contribution’.

Commons

We at the FEC do not think that the government is the appropriate collective institution to manage things like banking, taxation and land rental. These can all be taken out of the hands of government. Government should be restricted to policy making in the political realm. What we call the commons is an economic collective. This economic collective does not have the argy bargy of the political life. Outside of the capitalist context, it is the principle of cooperation and mutual aid that pervades the economic life, and it will have a very different structure to government. Because the term ‘public’ is often associated with government, we prefer the term ‘commons’ in reference to this economic collective.

Community Contribution

‘Community contribution’ is in fact the same as a transaction tax as described elsewhere [see Article 2 in ‘Further reading’]. The reason we have renamed the tax is for marketing reasons as people recoil from the notion of paying an extra tax. Tax payments is in fact how we as individuals contribute to the community in order to fund things like public transport, welfare and a functional judicial system. So people should be proud in saying that they pay their taxes. The reason that we have an aversion to the word tax is brought about by corporations who have the ability to make their expenses cost deductible. They load up all costs of dubious things into their income-expenditure calculations that they can get away with not paying a lot of the taxes that are their due. The whole scam trickles down to the rest of the economy and tax avoidance/evasion becomes an acceptable sport. In a true transaction tax, no expenses are tax deductible.

What is a fractal?

A fractal is by one definition ‘An object whose parts, at infinitely many levels of magnification, appear geometrically similar to the whole’. Take the fern leaf as shown in this image:

The first image above is a graphic picture of a whole fern leaf. If we take one of the ‘branches’ of the leaf – as depicted in the boxed section – and examine its structure, we find that the ‘branch replicates in full the pattern of the original fern leaf. The boxed section of the first image, rotated and appropriately magnified as in image 2, show an identical pattern to the whole leaf. If we take yet another ‘sub-branch’ out of the fern in image 2 as depicted in the boxed section of Image 2, we find the same leaf pattern replicated again. And so on.

The Fractal Economy Cooperative takes its name from this feature of fractals – that the part replicates the whole. We believe that what needs to be done in the global economy is the same as what needs to be done in the national economies; and that it is what we intend to do in the fractal economy. This means that we policies in a number of places that should also be practised in the national economy in order to make it a socially just and environmentally sustainable economy: direct democracy in the realm of policy making, direct individual participation in the allocation of public/commons spending; all the practices that make up for what we call commons banking, a new taxation system (which we call ‘community contribution’ for marketing reasons); support for cooperatives over share ownership of companies; a return to common ownership of land effected through the banking system.