CEN = VEB!

So, there's another layer to Cascadia Commons that I haven't mentioned yet.

Cascadia Commons does stuff.

Stuff other than being Cascadia Commons.

Cascadia Commons is a partner with the Community Exchange Network of Portland.

For the past year, I have participated in the community exchange revolution here in Portland, Oregon. That all started last June 2008 with Community Prosper. Philosophical differences led my fellow Community Exchange Networkers and I down a path to the Local Exchange Trading System (LETS), and now, the engine is really beginning to churn.

LETS was founded in the early 1980's by Michael Linton of the Comox Valley, British Columbia, and has since taken on many incarnations throughout Europe, Australia, and Southeast Asia.

Philosophically, LETS is a game, a game open to all, and whether they play or not, everyone wins. It is a play on Yin Yang, in that opposing forces are also interdependent and interconnected, giving rise to each other in turn. In 1986, Michael Linton wrote:

"(The LETS) Vision derives from the marriage of the two (Creditor and Debitor), a proper, conjugal relationship that respects the essential distinctions between the dimensions and brings their full potential into play."

Thus, LETS is not just a community currency/exchange. It is a path towards conceptualizing true nature, something that is holistic as opposed to static or atomistic. LETS is a flow or current representing the exchanges between community members. For example, if Joe mows Mary's lawn, Joe has provided a service. Joe earns credit worth 50 points and Mary's account is debited -50 points. Interestingly, if Mary were to mow Joe's lawn, the points would cancel out and both accounts return to 0. Therefore, LETS, just like Yin Yang and the Tao, remain in balance.

However, the difficultly is in regulating a self-regulating system. In the words of Buckminster Fuller, how does one "simplicate and add lightness" with LETS? If only everyone lived in balance, then perhaps LETS wouldn't need administration. Michael Linton has said time and time again, that any LETS system administered by a corporation, non-profit, or community organization is not a LETS system. LETS is a virtual community, and not a structured, rule-based, static system. LETS cannot be owned; it can only be shared.

My introduction to LETS and what Michael Linton calls Open Money was with Community Prosper's attempt to regulate the LETS variant Community Way. In Community Way, local businesses initiate the system by issuing credit and donating it to charitable organizations. The charity then sells the donated credits at par with the dollar as a fundraiser, and the supporter returns the credits to any of the participating businesses earning a discount on his/her purchase. While this sounds simple enough, there are many challenges: 1) Community Way, unlike LETS, is a credit limit system, i.e. businesses can only go so far in the negative; and, 2) businesses are donating what is technically an asset, and therefore is taxable and carries liability. The credits in LETS could be liabilities too, but since the system is community ran, that technicality can and should be overlooked.

Neighbors can figure out their own problems, but businesses and corporations play in a different sandbox that includes government, infrastructure, and democracy. In this sandbox, the players are competing for scarce resources - the prime labor is scarce, the raw resources are scarce, time is scarce, the money is scarce, and the rules, although necessary, only add complexity and cost. It is clearly a boxing ring, and only the strong remain standing. It is a system that encourages hierarchy, bureaucracy, and strict management, as one mistake, which this system often creates, could spell the end of a company, natural resource, reelection to political office, or worse... In other words, it is a system where its participants screw each other. It is not a system that flows - that is unless you're flowing with the punches. Michael Linton compares the conventional monetary system (fractional reserve banking) to a time before humans used wheels, and instead used squares - "it booms and crashes, booms and crashes, booms and crashes..."

How does one get LETS or Community Way to play in this aggressive, square sandbox? Should it? Or, should it find a way to attract players away from the old sandbox into the new, soft, and round sandbox?

Unfortunately, Michael Linton and I are not talking. We had many great conversations over the Winter, but our ability to communicate halted over incorporating the Community Exchange Network of Portland. Michael sees incorporation as playing in the old sandbox, and demanded the formation of a virtual corporation - no bureaucracy, no board, no committees, no rules, and only an "I will if you will" agreement. I was undoubtedly dismayed, especially when I knew nothing of a virtual corporation, but knew that no legal authority would ever stand for such a loose entity.

However, after further research, virtual corporations are emerging and powerful. A virtual corporation or virtual enterprise network is an attempt to connect small and medium sized businesses into peer networks, supported by linking core competencies, collaboration, and technology. By participating in a virtual network, small businesses are able to achieve scale and access to resources and capacity beyond its physical limitations. Additionally, by virtualizing, business and institution networks can respond to rapid changes in the marketplace, reduce costs, and "can co-produce on a global scale without investing directly in operations in foreign countries."

Virtual Networks are composed of three parts: 1) Virtual Enterprises; 2) Virtual Industry Clusters; and, 3) Virtual Enterprise Brokers. A Virtual Enterprise (VE) is either a long term or temporary network of indepdent companies and/or institutions linked via information technology that encourages sharing core competencies, infrastructure, labor, and business processes. A Virtual Industry Cluster (VIC) is an diverse aggregation of companies and/or institutions, with focused and defined competencies, and is a leveraging strategy providing access to new markets and business opportunities. A Virtual Enterprise Broker (VEB) is a business entity searching for business opportunities for the creation of Virtual Enterprises. VEBs core product is the VE. It seeks and selects partners, and configures the physical, legal, social/cultural, and communication infrastructure needed to achieve the VE's market goals. An example of such an institution is Yorkshire Forward, which is the regional development agency for the Yorkshire and Humber region of the United Kingdom. Yorkshire forwards works to encourage public and private investment and connect people to economic opportunity.

So, what does all of this mean for the Community Exchange Network of Portland? For a moment, lets pretend that CEN of PDX is a Virtual Enterprise Broker (VEB). In order for a community exchange/barter program to survive, it must have participants, but not participants offering the same products and services. There must be diversity. Therefore, the core responsibility of CEN of PDX is to search for either business or community opportunities that support a community exchange network. It must find suitable and diverse partners, and configure and define the physical, legal, social/cultural, and information necessary for the success of the program/Virtual Enterprise.

Commercial Barter Exchanges does this to some extent by encouraging businesses to join their network and exchange platform. There programs require diversity, however, traditionally they are closed networks with a singular currency, they charge fees ranging between 8% and 15% per transaction, and sometimes they charge membership fees. Additionally, their brokers are involved in every transaction resulting in a top heavy, bureaucratic system. According to Michael Linton (and, I am in aggreement), this is a form of exchange is tollboothing and violates the open principles of Local Exchange Trading Systems (LETS).

Essentially, the Community Exchange Network of Portland is a commerial barter exchange, al beit virtual. As a Virtual Enterprise Broker, it also seeks to link participants into Virtual Enterprises. A VEB does not own a VE, rather a VEB offers a VE a value adding service. And, the technological infrastructure the VEB uses to connect participants/clients is owned/programed by third parties. For example, CEN of PDX could connect businesses, charities and supporters on the Bright Neighbor platform. Therefore, Community Exchange Network of Portland provides a value adding service that most Virtual Enterprise Brokers do not: community barter - a community barter program that connects business, charities, and supporters in a mutually beneficial partnership, i.e. mutually beneficial Virtual Enterprise.

Incorporating the Community Exchange Network of Portland may never satisfy Michael Linton, however, at least what's preserved is the openness. We provide a service. We are not proprietary. We do not own the network, nor is it closed. We faciliate a balanced program that is open to all, and whether they play of not, everyone wins.

The People Aggregator

So, you ask, what's with that "Cascadia Commons" name?  Does it just have a nice ring?  Yes.  Does it have anything to do with Peter Barnes' book Capitalism 3.0?  Yes.  So, is it all about restoring the commons?  Yes, and there in lies a small problem.  

The name "Cascadia Commons" is rather popular.  Cascadia Commons was first coined Cascadia Commons Condominium Community Homeowners Association to establish a intentional community in Southwest Portland.  Notice how their URL ends with a .com as opposed to .org...  Then came the Cascadia Green Building Council wanting to build a Cascadia Commons social networking website (notice the proposed link in the lower left hand corner of their front page).  Then came the Oregon Department of Economic and Community Development's dream of hosting a Cascadia Commons sustainability expo at the 2010 Winter Olympics in Vancouver, British Columbia.  Then came us, Cascadia Commons now a project under the Cascadia Education Project, 501(c)(3).  Yes, we are tax deductible.  And yes, we do have a checking account... at Shore Bank Pacific.  

OK, so Cascadia Commons was originally an intentional community, but I ask all of my readers to look at the four projects mentioned above and ask if they are similar in anyway.  Are they environmental advocates?  Yes.  Are they socially responsible?  Yes.  Are they innovative, especially with the advancement of the green economy?  Yes.  Do all these project in some way or another want to preserve the Cascadian Bioregion and restore its commons?  Yes.  So, why can't we all get into the same boat and play together?  

Trust is a big issue for everyone everyday.  Do we trust each other's reputations, or rather, have our reputations been thoroughly tested?  Obviously, Cascadia Commons project of the Cascadia Education Project, 501(c)(3) has not been tested, and we want to establish a benevolent society (i.e. secret society) that offers insurance, and we adorn a flag - with a tree on it.  Already sounds fishy.  Time and time again, I find myself asking and re-asking everyone I meet to trust me.  No, I will not destroy your reputation.  I promise!  In fact, I will work with you in every way possible to change how we engage with people not in our circles of trust, and how we develop trust in general.

I will start with a social networking website.  No, I am not stealing the idea from the Cascadia Green Building Council.  In August 2008, I asked Brandon Smith, Chief Operating Officer of the CGBC if they would like any help with this project, as a social networking site was another goal of Cascadia Commons.  He emphatically said yes, but seven months later I now understand why Brandon was so emphatic.  Building social networking websites is not easy business.  Nevertheless, I continue to make steps forward, and research the future of social networking, i.e. open source social networking. 

Welcome to the world of Web. 3.0.  Sounds exciting, eh?  3.0 > 2.0!  As opposed to social networking sites being islands on the web, as they are in web 2.0, we are now moving into an open source social networking world where platforms will allow for the development of super power applications!  Definitely exciting, eh?  Superman is not a bird, or a plane, or even Superman, but actually a new way to engage with data and people.  

A friend of mine once asked me, "what's the difference between Ning and a Cascadia Commons social networking site?"  My response was, "Ning is clunky, too simple, it's a closed network, and it can't be membership owned."  Ning has many improvements since my harsh words, however, Mark Canter of People Aggregator would agree that Ning needs to do more to adopt open source standards.  His efforts with People Aggregator are similar to Wikipedia, in that Wikipedia offers an online encyclopedia service open to various forms of contribution, but because you can download the source code, you can protect yourself from bad policies, poor decisions, internal politics or failure to adapt to the needs of the community.  In others words, People Aggregator is a highly customizable launching pad for a social networking site that can either stay with its original host network or freely create its own.  Additionally, People Aggregator offers design, architecture, and customization services for hire.  

Also, Marc Canter is easy to contact.  I sent him an email this morning asking the following questions, and only a couple hours later, he responded with the following answers:

1. How well do you play with Drupal?

Very well - one could easily display posts from Drupal inside PA or vice versa. Or one could access APIs in both systems to do advanced stuff.

2. How much control do I have over advertising and can I collect the revenue? 

We have an ad center to place ads anywhere - but all the money is up to you.

3.  If I had membership fees, can I collect the revenue? 

We don't have that feature - but you could easily add it in.

4.  If group pages were business members and they wanted to sell products on their social networking site, can they do so on People Aggregator. 

Oh yah - see RocklandNY.tv

5.  If I assessed a fee to businesses for this, can I collect the revenue?

We don't have that feature.

6. Do you play with myVidoop?

Could be easily added.

7. How kind are you to non-profits?

We don't charge non-profits anything but then they don't get to call up and ask questions.

Thanks Marc.  Prompt responses alway gets a smile from a tree.

Anyway, so it sounds like Cascadia Commons has a good footing moving forward with the social networking website.  Next is the Community Credit Network, Virtual Enterprises, and the social venture revolution.   

A Fraternity for Cascadian Commons

Klahowya Cascadians,

Today I am beginning a journey through documentation that will support the cause for collaboration with Sustainable Cascadia in Seattle, Washington.  It dawned on me a couple of years ago that the Cascadian Bioregion is a very large place, thus developing an organizational structure that will keep the region whole and collaborative will undoubtedly be difficult.  However, there are new and interesting strategies, plus old strategies that if put together, I believe will provide the impetus for uniting Cascadia.

The discovery of a helpful old strategy began by reading Eric Ringmar's Surviving Capitalism, particularly the chapter on friendly-societies.  Friendly-societies are mutual assurance organizations, meaning they provide a community an organizational framework for harmonizing interests and the ability to collectively purchase life-benefit services, such as healthcare.  Friendly-societies, however, are prevalent in Europe and are rather sparse in the United States and Canada - that is if you do not include fraternal-beneficiary societies.  The fraternity is essentially the same thing as a friendly-society, albeit the purpose and focus of the group is dedicated to a special interest, as opposed to a geographic location, e.g. the "Masonic Lodge provides services to local chapters dedicated to Masonic awareness."  

Applying the fraternity concept to a bioregionalist effort I find very intriguing, however, the legal code is not new, established in 1909 and 1913.  Aligning the code to activities for the preservation of the Cascadian Commons may prove difficult, especially when the definition of a fraternity often appears vague.  Wikipedia provides a broad interpretation:   

The only true distinction between a fraternity and any other form of social organization is the implication that the members freely associate as equals for a mutually beneficial purpose, rather than because of a religious, governmental, commercial, or familial bond, although there are fraternities dedicated to each of these topics.

The IRS knows how to make it sound more difficult: 

To be exempt under Internal Revenue Code (IRC) section 501(c)(8), a fraternal beneficiary society, order, or association must meet the following requirements:

1. It must have a fraternal purpose. An organization has a fraternal purpose if membership is based on a common tie or the pursuit of a common object. The organization must also have a substantial program of fraternal activities.
   
2. It must operate under the lodge system or for the exclusive benefit of the members of a fraternal organization itself operating under the lodge system. Operating under the lodge system requires, at a minimum, two active entities: (i) a parent organization; and (ii) a subordinate (called a lodge, branch, or the like) chartered by the parent and largely self-governing.
   
3. It must provide for the payment of life, sick, accident, or other benefits to the members of such society, order, or association or their dependents.
   
4. An organization that provides benefits to some, but not all, of its members may qualify for exemption so long as most of the members are eligible for benefits, and criteria for excluding certain members are reasonable.
   

So, if Cascadia Commons pursues IRS code 501 (c) (8), we will need a fraternal purpose, a substantial list of fraternal activities, operate under the lodge system, provide life-benefit services, although we are not required provide all members life-benefit services.  The lodge system and life-benefit services are easily understood (explanation and implementation will be addressed in future posts), however, what does the IRS mean by "fraternal purpose" and "fraternal activities".  The Canadian Fraternal Association provides some guidance for the fraternal purpose:

Critical to the character of the fraternal benefit society as a membership organization is the "common bond" among its members. Such a bond is defined by three elements: fraternal purpose, group identity and group activity.

The following five general categories of common bonds are found amongst fraternals today:

1. Religion: Membership is restricted to persons of a particular religion or persons willing to support specified religious based objectives.
2. Gender: The Society has limited its membership historically to a particular gender. All gender based Society share another common bond such as religion, ethnic origin or values.
3. Occupational: Membership is limited to persons engaged in a particular occupation or profession.
4. Ethnic: Membership is or was originally limited to persons of a particular ethnic origin. Basic society objectives usually involve the promotion of the culture and heritage of that particular ethnic group.
5. General: Membership includes persons who share a commitment to particular principals or believes reflecting a common value system.

Is it possible to claim "Cascadian" as an ethnic group?  And, is dedication to the preservation and restoration of the Pacific Northwest commons too broad?  The key to "fraternal" is establishing the same or similar calling, avocation (something a person does in addition to a principal occupation, especially for pleasure; hobby: Our Doctor's avocation is painting), or a banding together to promote a common cause.  A fraternity of men and women banding together for the purpose of bioregional and sustainable living seems to have potential.  Cascadia Commons is an opportunity for people to gather, reduce their carbon footprints, learn of activities that are sustainable, clean up and restore a local watershed, and work with other charitable organizations that are doing the same.  The preservation of Pacific Northwest culture would also fit this description. Additionally, a Small Foundations report explains that the definition of "common bond" has eroded and become tenuous. Common bond has become so vague that a person can simply declare association, but not actively practice the bond. For example, saying I'm "Catholic" but not be a practicing Catholic is sufficient for meeting the bond requirement. Fraternities that support ethnic groups have accepted members simply based upon decent, marriage, or interest/affiliation. In other words, it really does not matter how Scottish, Norwegian, Hispanic, or Aboriginal you are to become a member.  What seems to only matter is to establish the organization as something different than an insurance company.

A Fraternal Activity, however, applies an interesting spin, for the organization must conduct rituals, ceremonies, social activities, and perform civic, benevolent, or charitable functions that serve to establish a fraternal purpose.  The IRS continues in document 1980 EO CPE Text: 

"Fraternal beneficiary societies generally take the form of a secret society which has a set of secret rites and rituals."

The IRS supports this explanation in Philadelphia and Reading Relief Association 4 B.T.A. 713 (1926) stating that the organization did not have lodges, rituals, ceremonies, or regalia and that the only objective of the organization was to receive insurance benefits.  Emphasis: Fraternal Activities serve to differentiate the organization from a commercial insurance company - seeking membership is not enough.  Additionally, mere recitation of membership in the bylaws is also not enough, i.e. the intention to operate a fraternal beneficiary society without carrying on "Fraternal Activities" is not sufficient.  

So, what are "fraternal activities"?  The IRS continues by saying "there are no specifications as to the kinds of activities an organization must engage in to be operated under the lodge system."  That is just wonderful, and it leaves me wondering.  The IRS does declare, however, that there should be elected officials, "with an adopted ritual or ceremonial, holding meetings at stated intervals, and supported by fees, dues or assessments.  Also, there is no requirement that either feature, fraternal activity or insurance benefit, dominate "so long as both are present in a substantial form and neither is a sham."  

While I am left vaguer than before, I also see an opportunity for creativity.  Cascadia Commons ultimately seeks to be a multi-ethnic, multi-religious/non-religious, multi-occupation/avocation organization, however, the goal or bond is to re-inhabit the Pacific Northwest bioregion, and to reclaim the commons for all inhabitants.  Perhaps specific activities should be established by local chapters - the parent lodge simply needs to declare that members will engage in activities that benefit the natural world.  The Doug Flag and variations on the design could serve as regalia. Additionally, local chapters could also declare they represent a specific ethnic group or religious belief.   Cascadia Commons, therefore, provides services to its member lodges that they would find difficult to provide for themselves.

The research is only beginning and I am certain members of Sustainable Cascadia will have many questions.  My purpose for meeting with them, however, is to learn how an organization like Cascadia Commons can advance their cause.  For instance, if they have volunteer needs, financial or insurance concerns, perhaps we can be of assistance.  Hopefully, they will be able to provide me assistance on how to establish Cascadia Commons, 501 (c) (8).