3

I'm going to give this a try:

Suppose a group of people want a kind of non-profit, open-source company that anyone can donate to or derive assets from, that no singular person owns but still has some level of organization, similar to communal housing.

What is the best kind of organization for this which is legally able to be registered in developed countries?

0
3

This would be a co-operative society, or a 'co-op':

A Co-operative Society is a membership organisation run for the mutual benefit of its members – serving their interests primarily by trading with them or otherwise providing them with goods, services and facilities – with any surplus usually being ploughed back into the organisation, although profits can be distributed to members. A Co-operative Society may or may not be a social enterprise, depending on its activities and how it distributes its profits.

From A GUIDE TO LEGAL FORMS FOR BUSINESS, UK Department for Business, Innovation and Skills

What you describe would be known as a Housing Co-operative which are common in many countries.

The NCDA are the US associated for Co-operatives.

4
  • That sounds promising, but the "housing" aspect isn't what I am going for, just a federally recognized entity for formally handling funding and management. Does this kind of entity allow the ownership to be continuously changed between a varying number of members who each hold a technical but non-profit stake in the entity? – John Joe Mar 23 '18 at 17:45
  • 1
    Depends on the jurisdiction, but yes, generally they are owned by their 'members'. The benefits of membership vary. I've added a link to a US-centric site to my answer. – JeffUK Mar 23 '18 at 17:52
  • Alright thank you, I'll look at it more closely. – John Joe Mar 23 '18 at 17:54
  • Normally a co-operative is a bastardization of a co-owned apartment building, and a condominium, where there is one mortgage, one property tax bill, and one insurance policy, upon which all owners are jointly and severally liable in each case (like a co-owned apartment building), but owners occupy individual units as if they were private property of just that owner. This doesn't sound like what the OP is envisioning. – ohwilleke Oct 20 '20 at 19:27
1

The IRS has a non=-profit type 501(c)(7) called a social club. It is a membership model. There must be dues and it must provide for members to interact with each other and not be engaging in commerce.

See IRS rules

0

You also might want to check out Open Collective: https://opencollective.com/

They are trying to re-imagine what's known as the "fiscal sponsor" relationship that has often existed between an incorporated entity (often non-profit) and unincorporated associations working loosely without the burden of incorporation. https://docs.opencollective.com/help/fiscal-hosts/fiscal-hosts

The platform is agnostic and allows anyone in the world to connect a bank account to the platform via Stripe Payments (acting as "host"), and offer slices of that bank account to "collectives". These collectives can then transparently accept donations or payments through their collective webpage, and pay expenses requested by contributors. The platform mediates the inflows and out-flows. It can also act as just a transparent public ledger, in case people want to pass funds outside their platform, and just use the platform to manually communicate financial flows.

The platform has seen a lot of success in open source communities. In fact, the project founders have separately incorporated a national charity whose mission is to support community development, and another nonprofit whose purpose is to support open source software development. These both act as fiscal sponsor for hundreds of collectives worldwide, some of whom have budgets up to $500,000. They in a way scaling up the fiscal sponsorship model, and bringing down the admin burden through a platform they're building. These collectives can have many paid contractors, and yet none of the project leaders has had to go through the trouble of incorporating and managing a corporation.

It's quite the experiment, and they're definitely breaking new ground. In some jurisdictions, this is called a Shared Platform model, but they are definitely taking it to the extreme :)

0

Suppose a group of people want a kind of non-profit, open-source company that anyone can donate to or derive assets from, that no singular person owns but still has some level of organization, similar to communal housing.

There are numerous variations on this concept and the details of the control structure matter in terms of what works well. The seminal work on the topic is "The Ownership of Enterprise" (1996) by Henry Hansmann (a Yale law school professor).

It explores why one would have cooperatives, mutual companies, and various forms of non-profits, as opposed to for profit corporations, and when for profit corporations are optimal.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.