FAQs – Commons Society

Where will the investment come from?

Organisations gifting themselves into the community context of the Commons Equity Society
Crowdfunding
Philanthropy
Community investment bonds for land or farm purchase @ 1% returns
Social Impact Bonds to purchase companies @ 5% returns
Bespoke deals with existing owners to facilitate buy outs
Companies, even really big blue chip ones, deciding the time is right to restructure its shareholding to buy itself into the Commons Equity Society over a period of time

Why would profitable businesses choose to come into this structure if they have to hand over 100% of their profits?

30% of the profit in a mature Commons Equity Society goes back to the co-workers that made the profit. This straight-forward sharing of the bottom line removes the need for complex incentive schemes and creates a “domestic economy” in which all have a vested interest in increasing sales and reducing costs.
CEO’s no longer have to address short term shareholder returns but can focus all efforts on long term company success
It is a new way to retain the vision, coherence , employee capability & asset value of a business when owners decide to exit ( eg on retirement) rather than selling into the free market often only for their life’s work to be asset stripped
Money is not the only way of valuing any proposition. When a business is brought or bought into the Commons, company managers, employees, their families and communities get the full benefit every year of additional investment in their education, training, health, culture and food production creating wider community and personal wellbeing for all concerned. This continually expanding added value can be a factor in structuring a partial buy out or bespoke deals with insightful exiting owners.

Why would people invest in this for low or no return?

For a saner world – a world in which prioritising the human makes sense
The existing economic model is broken. Many leaders of corporate and SME businesses not only recognise this but are looking for new ways forward. A Commons Equity Society is a practical alternative that integrates the interests of all stakeholders with a systemic solution that reconnects enterprise and wealth creation with the common good.
In the face of potential future social and environmental breakdown, many business leaders are committed to a gradual evolutionary change that supports both enterprise and wellbeing for all, rather than risking social disruption through business as usual. Incorporating a zone of enterprise within the free market based on the architecture of the Commons Equity Society re-establishes legitimacy for both business and democracy.
This new network architecture incorporates businesses as engines of change to create a zone within the market that operates for the common good rather than extractive market mechanisms which feeds the accumulation of capital by a few and destabilises democracy
It comprises a practical mechanism for expanding wellbeing and civil society without the influence of governments, banks or shareholders

How is this different?

a) Co-operatives? We recognise that the intention and purpose of co-ops are allied to the gesture of a Commons Equity Society and there may be some models of co-operatives that in a more complex form can function in ways similar to a Commons Equity Society. Whilst co-ops are participative and community orientated their constitutions may not automatically recirculate profit into the community. And whereas a traditional co-op, as an individual social enterprise, is an organisation, a Commons Equity Society is an organisation of organisations. So in terms of spreading its idea, without becoming more complex, a co-op tends be limited to growing itself – rather than automatically multiplying. A Commons Equity Society has a mechanism for company capture, expansion and lateral development of the context in which it is rooted and which in turn supports the organisation.
b) B Corps? Our view is that ethical enterprise of itself is not a systemic intervention in the market. Whilst B-Corps are legally bound to contribute some surplus to socially positive causes they still have shareholders within a private ownership model. And if they become really successful in the free market like traditional ventures, in some circumstances, could be subject to aggressive takeovers like any other company whereas a Commons Equity Society cannot be bought as it is protected by being part of a Commons ownership structure.
c) A CIC? CIC’s are legally bound to contribute some surplus to socially positive causes, and cannot be sold, but a CIC has no systemic mechanisms for multiplication, for capturing new companies into the Commons or for distributing more than its own surplus into the community. In effect the Commons Equity Society converts any normal limited company into a CIC, at less cost and with less administrative overhead.
d) Any other Social Enterprise? Individual social enterprises even when successful remain isolated oases in the dysfunctional landscape of the free market . The Commons Equity Society provides a protected sub-zone in the economy where things are done better and it is easier to be truly human and planet centred.
e) What is its USP then? It is a systemic solution to the negative aspects of the market mechanism. It has the potential to alter the existing economic landscape by creating a sheltered zone within the market and through its mechanisms for distribution or expansion to be a model of a civil, wellbeing economy rather than a model of an ethical enterprise. Put another way it integrates purpose within the market mechanism.

Who decides where and to whom surplus is distributed?

The Commons Equity Society Trust Fund annually receives 30% of surpluses from within the network as a whole and then redistributes this through a network of skilled charities dedicated to different aspects of our culture – education, health, conservation, arts etc.
The Commons Society Council is democratically elected by all members (co-workers of companies plus others that chose to join) and this Council has oversight of the Commons Equity Society infrastructure. The Council sets the rules of the Commons and provides accountability, oversight to the overall distribution of funds.
It operates on the principle of building trust through transparency.

What happens if the Investment Fund buys a company and it becomes unprofitable? Isn’t that a big risk?

Some money may be lost but as a tree can lose a branch without dying so the Commons Equity Society can withstand failure. When companies are part of a network if one company fails the impact is lessened for the community as a whole
A key component of the structure is that enterprises must be free – to succeed and to fail. The Commons Equity Society is NOT a group structure where the Council is the ultimate authority. Each organisation is free to operate within the rules of the Society – free to succeed through their brilliance and good fortune, and reciprocally, to fail because of their mistakes and bad luck.
But the network builds trust, supports collaboration, promotes goodwill – some would say these things also generate good fortune!
All organisations face hard times – times when learning is rich – and the Commons Equity Society is an additional potential funder, its economic funds taking the role of banker to the system – a banker that is truly invested in the success of its clients and its community!

Does a fully functioning Commons Equity Society already exist yet?

Yes & no. The structure exists and is investment ready for mature companies to be brought into the structure to drive the surplus distribution and investment mechanisms.
A variety of organisations exist within the structure already including a 200 acre farm, a business park (both owned within a community benefit society), a trading company that is a small social enterprise and a health-related charity.

If the Commons Equity Society is successful does it just continue growing for ever buying more and more companies into the network?

Yes and no. It continues expanding until it becomes apparent that it needs to split like a cell into two or more similar structures

Can existing enterprises join & how do they go about that?

Yes
Individuals and organisations that wish to join can contact us here

What will be your first investment objectives?

Our first investment objective is to fund the creation of the legal structure needed to tie everything together.
That will lead to a national promotional tour to launch our full-scale fundraising.

Why is the social impact of a Commons Equity Society greater than other forms of social impact investment?

It is a virtuous whole system within the existing system, each year creating more and more fertile ‘ground’ within the free market for investment in the human and natural commons
It is a systemic intervention in the market that develops a perpetual expanding investment fund that communities can focus towards their own best interests and changes the landscape in which business operates
It creates a new legitimacy for business
It makes the intrinsic but utterly hidden meaningful nature of work overt
It is holistic – truly encompassing our myriad concerns and activities – weaving them into a social fabric that will better support us all.

Can a Commons Equity Society only work in a particular geographical locality or can it be national or international?

Some may be focused around one geographical community. Others may be regional or national. Others still may be international.
Some may have all of these aspects within a single network.

How are you legally constituted. Are you investment ready and fully constituted to handle all the envisaged aspects of governance that will be required?

The Commons Society Foundation – the midwife organisation to the model – has applied to become a charitable incorporated organisation. We are preparing the constitution and application to become a charity.

Why have you called the first Commons Society the Elysia Commons Society?

The name came by a circuitous route but was chosen as it resonated with the feelings we had for it and, of course, with the feelings that come from listening to Schiller’s Ode to Joy set by Beethoven in his 9th symphony. In it he references Joy, the daughter of Elysium – an ancient Greek reference meaning joy is born of the gods… Gods or not, our deepest longing is to bring a good dose of joy and wellbeing to the world!