Mutual Aid Network Design Team - Legal Issues Work Group meeting notes 2.7.14

steph's picture
10 February 2014 - 5:12pm -- steph

MAN Legal Workgroup Minutes

Attending: Jon, Preston, Stephanie, Michael, Morris. Convened: 2:07 pm. Adjourned at 4 pm.

Topics on the agenda

  1. Multi-hierarchical organization of mutual aid networks.

  2. Articles of Incorporation of the overarching organization.

  3. Dissolution considerations and disbursement of assets in case of dissolution.

Preliminary discussion

Stephanie: Good recent meeting at Allied Community. Looking into starting energy conservation consulting and then developing awards for energy conservation. Award titles, or some sort of recognition related to the energy savings in their neighborhood. Examine potential savings with respect to the local credit union. One asset to bring to the neighborhood would be to secure the use of a vehicle for transportation assistance. Try to figure out a way to get around the "keeping savings to myself" attitude. Second Baptist Church might be the resource initially to provide van, perhaps on a reimbursement basis. Jon: Energy costs the same no matter what your income is. A priority is to get some economic benefit early on. Preston: establish solid standards for defining and recognizing energy savings. Stephanie: working with MGE.


Vision regarding MAN’s role

"Empowering individuals to do the things they want to do."

"We seek to become the handle of the umbrella."

Aspects of the Co-Operative

Classes of membership in a mutual aid network

  1. Defined by the by laws.

  2. Possible Member classes

    1. Partners - do their own thing

    2. Customers - we provide them means e.g., time banks

    3. Constituent entities

    4. Nonprofit

    5. Time banks

    6. Investors

    7. Miscellaneous Organizations

    8. Individuals



  1. On dissolution, fiscal and physical resources could be directed to a specified Mutual aid network.

    1. See 185.

    2. See 193.

    3. See producer co-ops.

  2. Dissolution could be triggered by definition in the by laws



  1. E-commerce style of structure?

  2. Simply entering into an agreement with others and just call ourselves a mutual aid network? Simple agreements that are developed by the starting group to be developed over time.

  3. Organizational votes - who can vote or affect operation.

    1. Weight - one person, one vote or contribution-based?

    2. This influences what the by-laws will state. Also affects operational authority.

    3. Start thinking about network distributed pooling. (Is ‘Bill’ a resource for templating?)

  4. Cooperative

    1. Manage locally exclusively

    2. Part of national

      1. Might affect the need to develop dissolution wording. Local cooperatives could simply join (collectively) and not need to incorporate.

      2. Could have templates if need to incorporate.

      3. Could simply be a member or affiliated cooperative.

        1. They could have control over their own resources.

        2. Have a national umbrella, with local aspects. How does Greenpeace operate in this respect regarding local affiliates?

        3. Have an autonomous group so they can be capable of making representation. This implies the need to incorporate.

        4. Need people to be legally liable for the resources of the group and to speak for the group.

  5. Enable monetary transactional relationships across borders

  6. Offshore trusts or hedge funds

  7. Use cases for example, e.g., structural scenarios

    1. Have local organizations who are members of a mutual aid network. International in scope, as well. Geographic borders with each member having their own management of resources. Borderless mutual aid network. Purpose-driven goals are bases for membership.

    2. Hybrid model. Offering mutual aid as a universal concept. Ability for the national to affect local activities is limited and not likely to be appropriate.

    3. Governance roles may define the membership approach.

Free-form Discussions

  1. We would like to be the steward for the member groups. Be a national incorporated within Wisconsin law for example. First create the local entity that is replicable. Then, create the super entity. We may find that it might be difficult or problematic to establish across state lines. One of biggest issues is securities. Raising and being responsible for the money to enable incorporating across state lines (?)

  2. Preston: (?) legal advisor wasn't pushing strongly for a decision. This is what you can do regarding multiple investors across states. Incorporate in Wisconsin and keep the organization at or below the state level. If you need to hold money, incorporate in Delaware. Envision a spiral of equities, contributions, in-kind resources, and being able to determine whose contribution is whose. A banking concept, maybe? Roll up level of the pool needs to be able to have fiduciary and or legal authority.

  3. Preston and Jon: 193 refers to LLC. Allows people to group and be represented by proxy. See also 185. 193 can get away from the one person one vote. Need to touch on this in the by laws. Is 185 more democratic? Michael mentioned financial issues. Preston: straight up assistance versus pooling. Then consider structure things that affords folks who have more economic hard assets to facilitate loans and transactions. Deal with defining the way things can happen. Need banker insight. We may or may not want some of those functions built in here.

  4. Determine which items are appropriate for nonprofit and which are suitable as for-profit.

  5. Additional resources:

    1. Scott Morris - going now for foundation route. Initial went 193 and corporation route.

    2. Different scenarios and the structures with benefits and drawbacks.

    3. Compare 185 versus 193 and the functionality, especially regarding assets.


Stephanie's Vision

  1. One collective group contains individuals, organizations. This connects to smaller collectives and members. Goal is to develop a template so the smaller groups don't need to start from scratch.

    1. We provide a template for sub (local) organization. That is, we have already tackled the legal issues. The sub organizations who wish to become a pilot should do the research for their state for subsequent sharing of process.

    2. Develop stewardship plan.

  2. Each sub group participates in a shared effort to contribute to the development of the larger group.


  1. Shared momentum.

  2. Promotional and public relation activities.

  3. People should be able to commission work from each other; pay each other.

    1. Examples

      1. I need a video to promote our organization. Someone in the group(s) can prepare.

      2. I need van for transport. Who can provide financial support?

  4. Pooled dollars.

  5. Stewardship of the pool.

    1. Who can use the resources?

    2. What investments are to be made? By whom?

    3. Process for loans and loan decisions?

    4. Grant decisions?

    5. Insurance and claims decisions?

      1. Insuring our own staff

      2. Partners' insurance

    6. Risk pooling (locals)

    7. Cost recovery to sustain operation of the corporation

    8. Stored value for community and or individuals

    9. Project resourcing

    10. Liquidity

    11. Finance insurance and real estate if appropriate.

    12. Interrelationships with credit unions, etc.

    1. Anti-structure approach. Rule-averse cooperation.

    2. Franchise-structure? Fraternal organization?

How do existing organizations deal with pooled resources

  1. Green America (formerly Co-op America)

    1. Green America (formerly Co-Op America) is a not-for-profit organization founded in 1982. Mission: harness economic power-the strength of consumers, investors, businesses, and the marketplace-to create a socially just and environmentally sustainable society. We work for a world where all people have enough, where all communities are healthy and safe and where the bounty of the earth is preserved for all the generations to come.

    2. Our democratically-constituted board is elected by our members from our consumer, business, and staff stakeholders. Green America operates as a collaborative and participatory workplace, where staff members reach consensus through democratic decision-making processes on key strategic issues for the organization. (Green America, 2014)

  2. Ace hardware- Sold to retailers in 1973, becoming a retailers cooperative, and the headquarters moved to suburban Oak Brook. Independent owners became dealer-owners and shareholders in the company. Because it is a co-op and not a franchise, each Ace Hardware store looks different. Ace has placed a focus on Ace stores exhibiting some similar characteristics, such as signaled and core product lines. (WikiPedia, 2014)

  3. Islamic banking (Sharia compliant financing) -Islamic banking has the same purpose as conventional banking: to make money for the banking institute by lending out capital. But that is not the sole purpose either. Adherence to Islamic law and ensuring fair play is also at the core of Islamic banking. Because Islam forbids simply lending out money at interest, Islamic rules on transactions (known as Fiqh al-Muamalat) have been created to prevent it. The basic principle of Islamic banking is based on risk-sharing which is a component of trade rather than risk-transfer which is seen in conventional banking. Islamic banking introduces concepts such as profit sharing (Mudharabah), safekeeping (Wadiah), joint venture (Musharakah), cost plus (Murabahah), and leasing (Ijar). (WikiPedia, 2014)

  4. USAA - USAA began in 1922 with 25 Army officers who offered to insure each other's vehicles when no one else would. Today, their tiny organization has grown into a respected institution offering a full range of financial products to millions of members. Restricts services to members of the United States military and their immediate family members. Not a corporation. Reciprocal inter-insurance exchange. For-profit. (WikiPedia, 2014)

  5. Fraternal Benefit Society - Fraternal Benefit Societies or Fraternals are not for profit membership organizations that have a representative form of government and are organized through a lodge system [1] to carry out social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic, or religious purposes. Fraternals provide members with life insurance and other financial protection benefits in accordance with state law and use the earnings to fund member-supported community activities. Fraternals are chartered by state law and have been exempt from income tax under Section 501(c)(8) [2] of the U.S. Tax Code since 1909. (WikiPedia, 2014)

  6. Thrivent - A not-for-profit organization that provides insurance to its members and operates for social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic or religious purposes for the benefit of its members and the public. These organizations operate under the lodge system, which means a member of the society is a member of a local chapter of the society. Fraternal benefit societies have representative governments, and members share a religious, ethnic, vocational or other common bond. (Thrivent, 2014)

Subjects for future discussions and concluding thoughts

  1. More research to be done on existing organizations

    1. Who's a member?

    2. Rights and responsibilities?

    3. What are the entities associated with that name?

    4. What are the services and rights and obligations?

    5. What are the return benefits?

  2. Stephanie to write up her conclusions following the meeting. Also, medical payment pooling. Rent shortfall pooling. Heating and utilities pooling.

  3. Jon: What initiative or program that would cause people to affiliate? What would make Bernard Lietaer join?

  4. Preston: Some people are not allowed to accrue equity, buying a home. Most people would benefit from owning a tenth of a home. Look towards wealth building and local custodial monetary management. Collective equity vehicle. How can you make it easier for people to buy a house or part of a van?



Chapter 193 organizations -

Chapter 185 organizations -



Summary Comparisons of Chapter 185 and 193



Wisconsin Statute Chpt. 185


Wisconsin Statute Chapt. 193

Wisconsin Cooperative Associations Act


Any lawful purpose, except banking, insurance and railroads

Any lawful purpose, except utilities

Number Required to Organize

Five incorporators

One organizer

Capital Structure

Co-op may be organized with or without capital stock. In stock co-ops, articles of incorporation describe amount and classes of capital stock, and the defining rights and limitations of each class. Stock dividends for any class of stock cannot exceed 8% annually.

Co-op may be organized with multiple classes of member interests, with rights, preferences and restrictions for each.


Bylaws define classes of membership and requirements, which may include purchase of membership stock. Both persons and business organizations may be members in accordance with bylaws.

Bylaws define classes of membership interests, rights and requirements. At least 5 individual patrons or one organizational patron must be a member. Nonpatron members permitted with majority vote by patron members.

Member Voting

Members have one vote. If members include organizations, the articles may permit voting rights based on organization’s size or patronage.

Patron members have one vote, but bylaws may authorize additional votes in specific circumstances. Non-patron members may have voting rights if authorized by patron members. The collective patron member vote may not be reduced to less than 51 percent of the total member vote.



A holder of non-member stock is entitled to one vote on amendments to articles of incorporation that affect stock, or in cases of mergers, consolidations, or divisions. Articles may allow non-member stockholder voting on dissolution.

Articles or bylaws may authorize a non-member class to vote at a members’ meeting.

Director Requirements

Must be a cooperative member, or represent a member organization. Bylaws may prescribe other qualifications.

A majority of the directors must be members, and must be elected exclusively by patron members, unless otherwise provided in the articles or bylaws.


Net proceeds paid to patrons and members on the basis of use as provided by the bylaws; may be used to pay dividends on capital stock as authorized by articles, and as reserves.

Profits and loss allocation to patron and non-patron members based on collective values of contributions, unless specified otherwise in bylaws or articles. Patron members must receive a minimum of 51 percent of both profit allocations and distributions, unless patron members, by majority vote, authorize lower percent, but not less than 30 percent. Profits allocated to patron members in excess of equity dividends and capital reserve additions must be distributed to patron members on patronage basis.


Adopted and amended by members, unless members adopt a bylaw to permit the board to make and amend specified bylaws.

Adopted and amended by members or board, except as specified in articles or bylaws. Bylaw changes regarding member allocations require patron member approval.

Merger and Consolidation

A two-thirds majority vote of members present, and a two-thirds vote of all stockholders who meet statute-specified voting criteria, are required to approve a board-prepared merger plan. In most cases a majority can be sufficient if a co-op has amended or adopted a restatement of its articles.

A majority of a quorum of voting members must approve a board-prepared merger plan. Articles or bylaws may specify other voting requirements.

Voluntary Dissolution

Net proceeds of liquidation distributed to all persons entitled by the law, the articles and the bylaws. Unclaimed assets are paid to the state treasury.

Remaining property after discharge of debts, obligations, and liabilities distributed to members and former members as provided in the bylaws. Unclaimed assets can be forfeited to the cooperative for distribution, or are paid to the state treasury.

(UW Madison Center for Cooperatives, 2014)




Green America. (2014, 2 8). Green America - About Us. Retrieved from Green America:

Thrivent. (2014, 2 7). About Us - Thrivent. Retrieved from Thrivent Aid Association for Lutherans:

UW Madison Center for Cooperatives. (2014, 2 8). Summary of Chapters 185 and 193. Retrieved from UW Madison Center for Cooperatives:

WikiPedia. (2014, 2 8). Ace Hardware. Retrieved from WikiPedia:

WikiPedia. (2014, 2 8). Fraternal Benefit Societies. Retrieved from WikiPedia:

WikiPedia. (2014, 2 8). Islamic Banking. Retrieved from WikiPedia:

WikiPedia. (2014, 2 8). USAA. Retrieved from WikiPedia: