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OGM + Lionsberg General Counsel, 2021-04-06

People

Bill Larson, Jordan

Jerry, Charles, Klaus, Pete, Doug

Meeting

Intros

  • (not captured in notes)
  • Meta: I (Pete) wish I could turn off the Nyan Cat status bar in HackMD

Wrap 1:27

  • Bill and Jordan to add legal section to MoU for OGM to look at
  • Klaus to suggest to Global Regeneration CoLab
  • OGM to socialize and reflect internally

Content of Meeting 0:17

process so far

  • alignment
  • technical details
  • legal details <-- you are here

goals

  • rapidly, rapidly replicate model
  • global movement
  • sustainable prototypes
  • structural (..) that lets it replicate
  • stewardship
  • preserve autonomy
  • highlight interdependence
  • pragmatically solve problems and demonstrate / model solutions
  • learning community / finding answers
  • prototype, learn, keep each other safe at each step
  • strong pool of knowledge (an OGM core strength)
    • maybe annual conferences where we come together to share knowledge
  • change culture
    • concerned about each other
    • concerned about sharing

structure

  • organizations
  • commons between organizatoins
    • what are the commons?
      • trusts
      • knowledge "seed banks"

directions / options

  • fiscal sponsorship route - help OGM spin up an org that can be
    • light, traditional path
    • puts OGM on the path to having its own non-profit status
    • fiscal sponsee has its own organization
  • create fractal replication of the Lionsberg structure
    • create a branch, with fractal non-profit+for-profit (clone both)
    • fork + subsidiary that can be autonomous
    • subsidiary is immediately non-profit (instead of 9 months with IRS)
      • subsidiary owns a C corp
    • Delaware 501(c)3 + C corp
    • long-standing for generations; non-profit; tax cap
    • non-profit that is owner of a for-profit
    • Jordan's hypothesis: gets the same useful/valuable structure at a fraction of the time and cost
      • non-profit + C corp = basic fractal building block
    • quick replication, easier to administrate
    • allows for governing documents to be different at different fractal levels
    • for the fractal approach, we then start a 501(c)3 + a Delaware C Corp right away? plus a bank account for each?
      • in Californa and Delaware, a single person can be the director (sole member of the board) of a non-profit
      • a "board" is needed for legal reasons, but we want to evolve governance beyond that
        • "weight friends"
  • subsidiary within Lionsberg (sort of fractal)
    • could be spun off
    • owning org would acknowledge up-front that subsidiary can spin out
    • HR, having employees
      • Lionsberg has HR infrastructure already
    • language of "subsidiary" creates some un-comfort
      • better: upside-down, tree trunk
      • maybe: aspen grove
      • would like to come up with better language
    • what does "sovereignty" really mean
      • ownership is a bundle of rights
      • fee simple absolute deed = "ownership", but actually doesn't capture ALL rights

Tree trunk + branches

  • shared services in trunk
  • some allocation from branches back to trunk to cover costs
  • the more we have running in parallel, the better
    • ecosystem diversity
    • can afford better shared services
    • there are already lots of good niche orgs; a lot of it is just connecting

Good services to share

  • legal
  • governance
  • HR

Non-profit

  • solicitation registration required in 41 US states
    • non-profits are often not aware
    • includes even a "donate" button on a website or solicitation on Facebook
    • can costs 5-15k per registration
    • centralized donation with an entity

Bill's explanation:

  • sometimes non-profit gets into activities that are on the edge of the mission
  • too much unrelated profit causes trouble
  • vs. "pasture" non-profit (non-profit owns LLC); profit is imputed to non-profit; unanticipated unrelated tax liabilities
  • C corp stops that; C corp can allocate profits as it wants, including donations
  • C corp can employ people, and lease them to the non-profit
  • provide a range of services to other orgs
  • equity of C corp has perpetual interest that accrues to benefit of non-profit, not one or a few people
  • no estate tax
  • no one person owning everything and then selling it all
  • all the non-profit values can be expressed in the for-profit world
    • demonstrates values to other for-profit companies

"C corps often don't pay taxes"

  • the problem isn't the entity, it's that rich people avoid taxes however they can
  • exploiting bugs in international relations
  • another problem that isn't the entity is focus on short term profitability
  • can do sharing and generosity, rather than extractive search for personal wealth

in sum:

  • tax matters
  • expression of values
  • sustainability, generational, benefit to people

Q: how about a franchise model?

  • values preserved by franchisor
  • compatible with C corp
  • "soft franchising"
    • could be licensing agreement
    • could include revenue sharing

Other orgs

  • Global Regeneration CoLab

Other Notes

  • the Zeiss organization is a favorite example of steward ownership
  • someone says "social franchising" for bottom-of-pyramid... https://www.dummies.com/business/start-a-business/3-types-franchising/
  • the next chapter after "the nature of the firm" and "coase's penguin"
  • nothing can be sustained without the social and moral values to sustain it
    • pure democracy = stupid mob can take over
  • discernment by the “weighty quakers” - “sense of the meeting" - “weighty OGMers”

References