Financial & Membership Policy Manual

1. PURPOSE AND SCOPE

This policy manual establishes the financial and membership procedures that implement the principles set forth in the Bylaws. Amongst other policies and procedures, this policy manual defines how membership shares are valued and managed, how surplus and reserves are allocated, and how members may participate financially in the Cooperative without affecting democratic governance.

These policies apply to all members, staff, and officers of The Erefugia Cooperative and may be amended by resolution of the Board of Directors, provided such amendments are consistent with the Bylaws and Vermont cooperative law.

2. MEMBERSHIP SHARES

Erefugia links its membership share values to livable wage data. This approach is designed to ensure that participation in the cooperative remains economically equitable and accessible over time, reflecting real-world cost-of-living conditions rather than arbitrary or static amounts. By indexing share value to a livable wage, the Cooperative affirms that membership contributions should grow or shrink in proportion to economic realities, not speculative market forces. This practice aligns with our principles of fairness, transparency, and shared responsibility while maintaining a sustainable foundation for collective ownership and operation.

2.1. Minimum Share Requirement

Each member of The Erefugia Cooperative must purchase one (1) membership share to establish and maintain membership in good standing.

2.2. Share Value

The par value of each membership share shall be based on the national average hourly livable wage for an individual with two children in the United States, as published annually by the World Population Review or a substantially similar data source designated by the Board.

The default par value shall automatically update each year on January 1st based on the most recent published data, unless the Board adopts a resolution to override or adjust the value.

At the time of adoption of these Bylaws, the par value is $52.26 per membership share.

2.3. Payment Options

Members may pay for their membership share in full at the time of joining or through an approved installment plan not exceeding twelve (12) months. In exceptional cases, the Board may approve equivalent in-kind contributions of labor, materials, or services in satisfaction of the membership share requirement.

3. INVESTMENT SHARES

3.1. Additional Investment Shares

Members in good standing may purchase additional investment shares to support the Cooperative’s capital needs.

Investment shares do not confer additional voting rights but entitle the holder to proportional surplus distributions as provided by these Bylaws and applicable law.

3.2. Share Value

The par value of investment shares shall be identical to the current membership share par value unless otherwise determined by the Board.

3.3. Payment Options

Members may pay for their investment share in full at the time of purchase, or through an approved installment plan not exceeding twelve (12) months. In exceptional cases, the Board may approve equivalent in-kind contributions of labor, materials, or services in satisfaction of the membership share requirement.

4. LABOR CONTRIBUTIONS OUTSIDE EMPLOYMENT

Erefugia values voluntary and community labor as integral to cooperative life. To maintain both legal clarity and fairness, contributed labor is tracked independently from membership shares and investment shares. Members may contribute labor to the Cooperative outside the scope of any employment or contractual engagement. 

4.1. Tracking

Such contributions shall be recorded in the Cooperative’s Labor Ledger at the prevailing membership share par value (e.g., the national average hourly livable wage for an individual with two children), ensuring all forms of contribution, capital, labor, or creativity, are recognized within a transparent, democratic framework.

4.2. Conversion

Labor contributions do not automatically confer voting rights or ownership but may, upon approval by the Board of Directors or by DAO resolution, be converted into:

• Investment Shares, at a rate and schedule determined by the Cooperative;

• Patronage Refunds, reflecting the member’s proportional contribution to Cooperative activity during the fiscal year; or

• Deferred Labor Credits, which may be redeemed, converted, or retired at a later date subject to available surplus and Cooperative policy.

The Board shall adopt and publish detailed procedures for valuing, recording, and reconciling such contributions to ensure transparency, equity, and compliance with cooperative and tax law.

4.3. Labor Contribution Approval and Verification

To ensure transparency, accountability, and fairness in the recognition of member labor contributions, any labor a member wishes to have recorded in the Cooperative’s Labor Ledger must be approved by a member of the Executive Team, a Service Delivery Leader, or a Service Delivery Team Leader prior to or immediately following the work performed.

It is strongly recommended that members seek pre-approval for proposed labor contributions whenever possible, to avoid later disputes regarding eligibility, valuation, or recognition.

Unapproved labor may still be acknowledged informally as volunteer service to the Cooperative but shall not be credited toward investment shares, patronage refunds, or surplus distributions unless retroactively approved by the appropriate authority.

5. VOTING RIGHTS

Each member of the Cooperative shall have exactly one (1) vote in all matters submitted to the membership, regardless of the number of investment shares owned. Voting rights are established through membership status, not financial investment.

6. SURPLUS ALLOCATION AND PATRONAGE

6.1. Determination of Surplus

At the close of each fiscal year, the Cooperative’s net surplus shall be calculated by subtracting all operating expenses, taxes, and required reserves from total revenues.

6.2. Reserve Allocations

Before any distributions are made, the Board shall allocate a minimum of ten percent (10%) of annual surplus to the General Reserve Fund to strengthen long-term stability. Additional reserves may be created for technology renewal, infrastructure, or community reinvestment as determined by the Board.

6.3. Distribution of Surplus

Remaining surplus may be distributed as follows:

• Patronage Refunds. Members may receive a portion of surplus based on their relative participation, usage, or labor contribution to the Cooperative during the fiscal year.

• Investment Dividends. Members holding additional investment shares may receive a proportional return based on the number of investment shares held, subject to available surplus and Board approval.

• Reinvestment Option. Members may elect to have their patronage or dividend distributions reinvested as additional investment shares in the Cooperative.

7. REDEMPTION AND WITHDRAWL

7.1. Redemption upon Termination

When a member leaves the Cooperative, the Cooperative will redeem the member’s shares at par or book value, whichever is lower, unless doing so would endanger solvency.

7.2. Deferred Redemption

If the Cooperative lacks sufficient funds, redemption may be deferred until the next fiscal year or until the Board determines funds are available.

7.3. Transferability

Shares may not be transferred or sold to non-members without Board approval.

8. FISCAL MANAGEMENT

8.1. Fiscal Year

The Cooperative’s fiscal year shall begin on January 1 and end on December 31 of each year, unless otherwise set by the Board.

8.2. Accounting Standards

The Cooperative shall maintain its financial records in accordance with generally accepted accounting principles (GAAP) and shall conduct annual reviews or audits as determined by the Board.

8.3. Annual Financial Report

An annual report summarizing the Cooperative’s financial condition, surplus allocation, and reserve status shall be prepared by the Treasurer and presented to the membership.

9. AMENDMENTS

This manual may be amended by resolution of the Board of Directors at any regular or special meeting, provided that such amendments do not conflict with the Articles of Incorporation, Bylaws, or applicable law. All members shall be notified of any amendments within thirty (30) days of adoption.

10. EFFECTIVE DATE

This Financial & Membership Policy Manual shall take effect upon approval by the Board of Directors on [insert date] and remain in force until amended or repealed.