As suggested in this Circle meeting last Friday, I’d write down an initial proposal for our Compensation Framework.
We aim to iterate a practical version of contributory accounting that works now for meet.coop and may evolve into something more flexible and complex in the future. We focus on the present. NOW we need urgently to put in place a Compensation Framework that deals with contributions and compensations and guarantees the necessary compensations for the team to continue to build up Meet.coop.
So far we have started on the basis of people and organisations becoming members and making a contribution in time, money and/or other resources (like servers). Details of contribution levels are defined in the wiki:Membership and wiki:Service Levels.
Since May 2020 we set up a timetracker at time.meet.coop and (most) active operational members have started recording their time contributions to the tracker. Operational members are expected to contribute at least 40 hours of work (or through monetary or other contributions valued as such). We seek to compensate additional work, in particular if it is considered essential to achieving our mission by the Circle of Work to which it belongs. Also we should take notice that some people have their income secured elsewhere or in other ways and don’t expect financial compensations from Meet.coop. That leaves us with the following types of work:
Worked time registered at time.meet.coop
- contributed as part of the annual membership contribution of an operational member
- no compensation is expected
- compensation is expected: tagged as “compensation required”
In the latter case, the worker should be a member of the Circle of Work where the work relates to. We expect the work to be related to a (linked) task in the task tracker (Deck application in cloud.meet.coop to be configured). Each of the Circles has relative autonomy to work within the scope and aims with the funded budget assigned and may prioritise certain work according to agile methodologies.
Calculation of Compensations
Compensation will be calculated at the end of each trimester (?).
At the end of each period each Circle reviews the registered time of its members and the budget that has arrived to the Circle and proposes a compensation that is as fair as can be. We aim for a compensation of 25 euro per hour (1). We are aware that this isn’t a high tariff for most in the Western world, but if all necessary hours are reimbursed with this tariff, then workers should be able to obtain a reasonable salary. In case more funds are available, the remaining funds will be kept as a reserve for the next period. In case too little funds were available, the registered hours will remain open for compensation until reaching the agreed hourly cost tariff.
These proposed compensations need to be presented in a designated folder in cloud.meet.coop and a validation period is respected of at least 3 days until the validated proposals are ready for payment. Payment of each sum requires a valid invoice by the operational member, either as organisation or as individual.
(1)The agreed tariff doesn’t include VAT or retentions for social security or any other deductions. The persons or organisations invoicing these compensations will be fully responsible for taking care of such fiscal or social responsibilities.
Income to be distributed
We have just moved to OpenCollective and new members are making their contributions through that platform, providing transparency on membership and contributed amounts. Also OpenCollective allows us to reimburse costs and compensations with the same transparency.
The incoming funds are then distributed as follows:
- Payment processing: ca. 9%
- Open Collective: 5%
- Stripe credit cards: 1,4-2,9%
- Platform 6 as fiscal host: 2%
- Sales (labour) compensation: 30%
- Server costs: ca. 9% (depending on the scale of the operation)
The remaining income is the distributed over the Circles of Work:
- Organisation Circle: 23%
- Product Circle: 23%
- Tech Circle: 50%
Remains 5% that we dedicate to Legal, Insurance and Other costs. This is kind of an unforeseen budget.
- Members of the Product Circle are typically also engaging new members and are entitled sales compensations. Possibly we’ll want to review the Sales Compensation in combination with the Product Circle work. Right now we put a higher compensation for Sales to have the necessary incentive and compensation for working to grow, key to success until we reach near to the break even point. Eternal growth is NOT our objective, rather reaching a level where meet.coop and its operational members can be sufficiently paid for the work and user members happy with the results.
- Contribution accounting. There are several very interesting projects in the Open Value Accounting space and it’ll be interesting to learn from them and consider possible schemes for complementary currencies and mutual credits. Given our current tools to register financial and time contributions we are already on track to have the basics covered.
- these % per circle or for sales can be different; we are likely to iterate this over time. And of course this is just an initial suggestion so we could do it all different as well!
- how do we deal with the time worked so far? We’ll need to analyse the time in detail, see what’s missing (Hypha?), deduct operational member contributions and see how we can pay off this initial investment.
- notice the Profit & Loss spreadsheet I created in /modeling to see how different income scenarios can work out with different compensation percentages.
What big things are missing? How does this look?