Qualifying Contribution
A qualifying contribution is a commitment to trade with a FairShares Enterprise in a way that meets the criteria for membership. Qualifying contributions are set for Labour Shareholders / Members and User Shareholders / Members only.
Each FairShares Enterprise needs to define the qualifying contributions it recognises in its internal rule book (it is difficult to include in Articles of Association or ByLaws as it is so context specific).
Examples of qualifying contributions include:
- One Labour Share for each 0.1 fraction of a working week (appropriate for conventional employment situations). 10 Labour Shares = 1.0 Fractional Working (i.e. full-time), five Labour Shares = 0.5 Fractional Working (half-time) etc. Labour Shares need to be issued or cancelled if a member changes their normal working pattern, unless there is a decision to permit accumulation of Labour Shares (not recommended).
- One Labour Share for a given 'output' (appropriate where members are working to sell or produce a particular product/service). For example, at New Horizons Music (a musicians' co-operative), one Labour Share was issued to each composer/band for each minute of original music contributed to the publisher's music catalogue. In Indonesia, logging co-operatives admit new members based on their contribution of logs (not money).
- One User Share for an ongoing agreement to use a given product or service. By doing so, customers who pay subscriptions will receive higher dividends and larger allocations of Investor Shares than those who pay as they go. For example, a leisure provider might issue User Shares to monthly subscribers, but not to casual customers. Mobile phone providers might issue User Shares to those with monthly contracts, but not ‘pay-as-you-go’ customers. A bank might issue User Shares to account holders. A housing provider might issue User Shares for long-term tenancy agreements, but not short-term agreements.
- User Share issues reflecting levels of service. For example, in a health scheme, User Shares might reflect the plan purchased by a patient (or by their relatives or by the state). This way, patients (and/or their family) receive patronage refunds and Investor Shares commensurate with service levels they have committed to funding.
The number of Labour Shares and/or User Shares issued does not affect rights to speak and propose resolutions in meetings. Irrespective of the number of shares issued, a member still has only one vote. The number issued, however, does affect the dividends they will receive, and the investor shares (Member Shares) to which they will be entitled when the enterprise generates a surplus.
In associations and partnerships, the qualification is for membership rather than shares. Membership confers rights of governance, but - in the case of an association - no rights to share in the surplus of the organisation. In an association, members gain rights to control a share of surpluses, but not receive them.
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