Create Resource Allocation Process

We build in public. This means transparency in

  • Where money is coming from
  • Where money is going
  • Values by which we make financial decisions
  • Measures of equity in who leads at YPC
  • Measures of collective impact as made possible through resources including financial ones
  • Mechanisms for changing the policies
  • Mechanisms for accountable community
  • Mechanisms for dynamic decision-making

Let’s also consider financial resources as a question of governing the commons. In this I look to Elinor Ostrum, the only female Nobel Laureate of Economics who studied the commons and what makes them sustainable. She found these eight principles:

1. Commons need to have clearly defined boundaries. In particular, who is entitled to access to what? Unless there’s a specified community of benefit, it becomes a free for all, and that’s not how commons work.

2. Rules should fit local circumstances. There is no one-size-fits-all approach to common resource management. Rules should be dictated by local people and local ecological needs.

3. Participatory decision-making is vital. There are all kinds of ways to make it happen, but people will be more likely to follow the rules if they had a hand in writing them. Involve as many people as possible in decision-making.

4. Commons must be monitored. Once rules have been set, communities need a way of checking that people are keeping them. Commons don’t run on good will, but on accountability.

5. Sanctions for those who abuse the commons should be graduated. Ostrom observed that the commons that worked best didn’t just ban people who broke the rules. That tended to create resentment. Instead, they had systems of warnings and fines, as well as informal reputational consequences in the community.

6. Conflict resolution should be easily accessible. When issues come up, resolving them should be informal, cheap and straightforward. That means that anyone can take their problems for mediation, and nobody is shut out. Problems are solved rather than ignoring them because nobody wants to pay legal > fees.

7. Commons need the right to organise. Your commons rules won’t count for anything if a higher local > authority doesn’t recognise them as legitimate.

8. Commons work best when nested within larger networks. Some things can be managed locally, but some might need wider regional cooperation – for example an irrigation network might depend on a river that others also draw on upstream.

Other places to learn from

Related Projects


Reread pg. 169 Dynamic Resource Allocation section of Implementing Beyond Budgeting

Term to search: Open-book Management

Example of how one co-op operationalizes distributed decision making regarding budgets. is run through a system of open contributions. There are no employees, but the cooperative strives for fair and sustainable remuneration for its contributors.

The procedure for paying contributors and expenses is as follows:

A member makes a proposal in the finance group (with the Title labeled EXPENSE), detailing either:
work to be done, the expected timeline, and the contributor’s qualifications, and the cost (in USD)
a service to be acquired, details about the provider, its benefits over alternatives, and the cost
a donation to be made to an external open-source developer or collective, the work they do that benefits members, and a proposed amount
If that proposal passes, the member may proceed. They may post an invoice to OpenCollective, with a link back to the relevant Loomio thread, for up to one half of the total amount.
When the work is complete (or equivalent), the member must post a follow-up proposal (with the Title labeled INVOICE, in the same thread as the EXPENSE), including details demonstrating the work done or service obtained
The contributor should post the expense to the OpenCollective page with a link back to the relevant Loomio thread
Once passed, the expense is approved by an OpenCollective admin, and the contributor is paid within two weeks, or as soon as the OpenCollective account has sufficient balance
While general budgeting decisions are expected to be passed in the full group, all members are invited to monitor the finance group, and to join if they wish to participate in maintaining accountability.

Favorite so far!!
Enspiral Handbook


Financial Agreement


This agreement defines how handles money as a collective, specifically the funds in the accounts of . Our goals are to ensure legal compliance, financial solvency, and operational reliability, make financial flows across the network as transparent as possible, and direct significant resources to discretionary funds to be decided through participatory processes.

Type of Funds

Money held by the foundation falls into the following two categories.

Core Fund

The core fund is controlled by the Foundation Board. These funds are flagged for operational expenses and providing an economic runway for .

The board is expected to maintain a viable level for the core fund account (e.g. minimum of 12 months of fixed expenses) and to periodically allocate any surplus to the approved collaborative funding processes of their choice.

Collaborative Funds

Funds allocated to an approved collaborative funding process governed by the rules that define the specific process.


receives income from individuals, companies, trusts or other entities. Income can be broken into the following categories:


All one-off gifts to the foundation go to the core funds.


All recurring membership fees go to core funds. The board is responsible for setting membership fee levels and processes via the membership fees guide.


A recurring sponsorship with . All sponsorships have a written memorandum which outlines the terms of the sponsorship and where funds are allocated.

Sponsorship monies can be allocated to any fund, as defined by the sponsorship memorandum.

An agreement (in the form of a memorandum) with the Board and the sponsor. The Board will sign off on and maintain a record of all memorandums.

Other income

All other income is allocated to core funds.


Money spent by the Foundation falls under the following categories.

Fixed Costs

The board is responsible for managing the fixed costs of the from core funds, which are expected to be kept at ‘minimum viable’ to ensure smooth operations of core processes for the network.

Discretionary Costs

All discretionary costs are managed through an approved collaborative funding process and taken from collaborative funds.

Emergency Costs

The board can approve one-off expenditures from any fund when exercising their emergency powers.

Collaborative Funding Processes

A collaborative funding process must have a facilitator who takes responsibility for the process. Specifically the facilitator is responsible for:

  • Ensuring the rules for the process are clearly documented and approved by the board

  • Budgeting for the process, including themselves running the process.

  • Facilitating the process

  • Reporting the outcomes to the network

  • Holding entities that receive funding accountable

Funds may only be allocated to a collaborative funding process that has clearly documented rules that have been approved by the board. If no such rules have previously been defined, a proposal must be made to the board and approved.

Overall Compliance & Reporting

All financial compliance is managed at the discretion of the board. The board will provide a periodical financial report on s funds/accounts balances and budget/financial forecast.

I had an idea!

What if we approached budgeting using the principles and features of You Need A Budget?


Rule One: Give Every Dollar a Job
Rule Two: Embrace Your True Expenses
Rule Three: Roll With The Punches
Rule Four: Age Your Money


I’m tempted to see if YNAB could, well, be our budgeting software. But Open Collective with its Fund and Projects feature may be able to take this on instead.


I found the business version of YNAB!

A post was merged into an existing topic: Implement Profit First