Breakout Meeting [Excerpt] RM ED PS 20200521
BurningSeed Restructure Stakeholders Thu 28 May 2020 6:56AMPublicSeen by 13Below is an excerpt of a Google Doc record, drawn from an informal, breakout session shared by RC members Eric Dorien, Richard Martin and Phil Smart. The text has been duplicated here to ensure there is a record of it held in Loomio under the relevant workshop subject. This excerpt has been edited to migrate only points relating to the current workshop (Legal & Organisational Structure). Points relating to forthcoming workshops (Director terms, voting etc) will be migrated in a similar fashion when those workshops launch.
"Burning Seed possible restructure framework"
This document outlines a possible structural framework for the Burning Seed restructure process. Details and fine tuning to be discussed in Loomio, workshops and elsewhere, but this document can serve as a reference point for those discussions.
Central to this restructure proposal is 2 entities. We are currently calling the 2 entities the Holding Entity and the Production Entity.
Some of the following points regarding these 2 entities extract unique features included in the REC Committee Guidelines, which seemed to have worked pretty well and have been unquestioned to date.
Some of them are specifically included to make a difference of the type of culture within an entity. These are aimed at levelling power and limiting individuals ability, within an organisation, to politic, grab and wild undue power.
Holding Entity
The Holding Entity could also be seen as the cultural organisation and it is the entity that would hold the assets and would have the broad based membership.
Write the constitutions/rules in line with the entity being registered as a charity.
To achieve this liaise with the ACNC, and look at their suggested model rule inputs for both Associations and Companies Limited by Guarantee, to get material and possible clauses.
Include the required purposes, which gives it the ability to serve as a charity, which is part of the requirements for registration with the ACNC, where registration with the ACNC, will happen after the initial registration and incorporation with the relevant govt body, depending on the type of entity chosen and formed. (ie an Association is registered with a State Registrar for Associations)
Included clauses to allow the ability to create and run a Public Fund. This allows the entity to conduct this activity down the track, after registration and incorporation, if it so chooses and can find the required ATO defined responsible people to be the majority of the committee on the Public Fund.
NB Public Fund provisions may be included in a constitution/rules, although its the choice of the Board or Committee of Management if it wants these provisions to be enabled at any time.
Membership to be as broad based as possible out of participants.
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Constitutionally adopt a mechanism to be an welcoming, diverse and inclusive organisation. This includes how to act when this doesn’t happen. We could adopt https://www.contributor-covenant.org/ or something like it.
Production Entity
The Production Entity would run the Burning Seed event. In the future the Holding Entity may create other entities that would have a similar structure to this production entity.
Does not need to be registered as a charity and only needs to be a not-for-profit entity.
Does not need clauses to allow the ability to create and run a Public Fund. This is the role of the Holding entity.
Holding Entity Membership details will need in depth discussion.
Some notes on possibilities:
One option is a single member which restricts it to be a Company Limited By Guarantee, which of the three entity types being considered, is the only one that allows single membership.
Another option could be membership could be all members who qualify for their contributions to Burning Seed. ie. buying a ticket. Under this model, these members would be members of the holding entity as well. Future Entities would have different qualifying contributions.
The Production Entity Board could be the same members as on the Holding Entity initially at least. Then when certain criteria is met it’s own Board is voted upon.
The Board of the Production Entity Acts in a Trustee manner, primarily attending to company compliance requirements (ie ASIC & the ATO, Insurance, Permits, etc), where they have an ‘Operations’ standing committee (ie Town Council)
Unlike the REC Committee Guidelines, ‘Operations’ standing committee (ie Town Council) is established in the Production Entity’s constitution/rules.
This is written in a similar format as outlined in the Committee Guidelines document, with responsibilities and powers clearly outlined, where it appoints the Team Leads and forms the Facilitators sub group to handle running of day to day affairs.
The opportunity here is that there could be tweaking of the The ‘Operations’ standing committee, where as an example, it could be an elected and even representative committee, different to the way it currently self appoints, then gets rubber stamped by the REC Board.
There would be no proxy voting.
The Chair may only make a deliberative vote and not be permitted to exercise a casting vote.
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Voting will need in depth discussions. Some notes on possibilities:
consensus, where a vote may only be taken if consensus may not be found (the same process as in the REC Committee Guidelines).
Higher percentage than a simple majority (51%). Perhaps 70-80%?
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Included an indemnity clause exactly like clause (5. Indemnity of Offices and Members of Committees) from the REC Committee Guidelines. This is extremely important in a Volunteer run operation.
(...continued on relevant threads as workshops launch)
Madeline FountainThu 28 May 2020 7:23AM
"Include the required purposes, which gives it the ability to serve as a charity, which is part of the requirements for registration with the ACNC, where registration with the ACNC, will happen after the initial registration and incorporation with the relevant govt body, depending on the type of entity chosen and formed. (ie an Association is registered with a State Registrar for Associations)"
My suggestion is that a working group is set up specifically to ensure all provisions are made towards this goal are included and correct. It is a specialised and technical area.
The correct ACNC category for registration as a charity is SubType5: Advancing Culture.
ROCO is a different pathway to DGR status, but from July 2020 all orgs on ROCO will need to comply with ACNC standards, so best to make provisions that consider both ACNC and ROCO guidelines.
To achieve DGR status (not all charities have DGR but all successful ROCO applicants are automatically granted DGR as long as they manage a public fund) one can either go down the path of ACNC Subtype Advancing Culture and/or attempt entry on ROCO (which is exclusively cultural orgs). There are suggested Model clauses for ROCO applicants to include full ROCO guidelines can be read here:
Appendix 2—Model clauses
Where relevant, you may choose to use the following model clauses in your governing document.
Model clauses 30-300(3)
The association will establish and maintain a public fund.
Donations will be deposited into the public fund listed on the Register of Cultural Organisations. These monies will be kept separate from other funds of the association and will only be used to further the principal purpose of the Association. Investment of monies in this fund will be made in accordance with guidelines for public funds as specified by the ATO.
The public will be invited to contribute to the fund.
The fund will be administered by a management committee or a subcommittee of the management committee, the majority of whom, because of their tenure of some public office or their professional standing, have an underlying community responsibility, as distinct from obligations solely in regard to the cultural objectives of [name of organisation].
No monies/assets in this fund will be distributed to members or office bearers of the Association, except as reimbursement of out-of-pocket expenses incurred on behalf of the fund or proper remuneration for administrative services.
The Department responsible for the administration of the Register of Cultural Organisations will be notified of any proposed amendments or alterations to provisions for the public fund, to assess the effect of any amendments on the public fund’s continuing Deductible Gift Recipient status.
Receipts for gifts to the public fund must state:
the name of the public fund and that the receipt is for a gift made to the public fund
the Australian Business Number of the company
the fact that the receipt is for a gift, and
any other matter required to be included on the receipt pursuant to the requirements of the Income Tax Assessment Act 1997.
Winding-up clause
If upon the winding-up or dissolution of the public fund listed on the Register of Cultural Organisations, or its endorsement as a deductible gift recipient is revoked, there remains after satisfaction of all its debts and liabilities, any property or funds, the property or funds shall not be paid to or distributed among its members, but shall be given or transferred to some other fund, authority or institution having objects similar to the objects of this public fund, and whose rules shall prohibit the distribution of its or their income among its or their members, such fund, authority or institution to be eligible for tax deductibility of donations under Subdivision 30-B, section 30-100, of the Income Tax Assessment Act 1997.
Model clause 30-300(5)
It must not pay any of its profits or financial surplus, or give any of its property, to its members, beneficiaries, controllers or owners (as appropriate).
Model clause 30-300(6)
The company must comply with any rules that the Treasury Minister or the Minister for the Arts make to ensure that gifts made to the public fund will only be used for the company’s principal purpose.
Model clause 30-300(7)
The company must provide to the Department responsible for the administration of the Register of Cultural Organisations statistical information on the gifts made to the public fund every 6 months.
SamSun 31 May 2020 7:11AM
is there any reason we shouldn't include it in the brief to counsel that we request ALL of the clauses above to be included as is?
Madeline FountainThu 28 May 2020 7:27AM
"Included clauses to allow the ability to create and run a Public Fund. This allows the entity to conduct this activity down the track, after registration and incorporation, if it so chooses and can find the required ATO defined responsible people to be the majority of the committee on the Public Fund. In the Prolegis draft this is written into the Objects with an imperative of establishing a Public Fund. I would recommend keeping the language in the current REC docs "make provisions for" to allow it to be optional and something that is provided for in the language and structure of the Org, but that will not set the new entity up to fail on that Objective.
NB Public Fund provisions may be included in a constitution/rules, although its the choice of the Board or Committee of Management if it wants these provisions to be enabled at any time."
The research I have done regarding the establishment of a public fund that satisfies ROCO requirements does, on the surface of things, look onerous and I question at this time whether we will likely ever see the kind of philanthropic gifting from patrons that they get in the US that would justify the administrative burden of creating yet another entity. However making provisions for this possibility is a good idea. I do think the intention needs critical analysis though.
I attended an online conference last week organised by NAVA and the speaker was the head of the Grattan Institute. Arts patronage in this country is less about tax minimisation and more about status signalling. Contemporary and unconventional performing arts do not attract the same share of the philanthropic pie as the Opera or Philharmonic for example. I just don't see who our patrons are likely to be. In the US they have the Silicon Valley elite, supporting the BMP because it like the annual party for a huge swathe of their staff. I am yet to figure out who our patrons might be.
Madeline FountainThu 28 May 2020 7:33AM
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Membership to be as broad based as possible out of participants.
This is really something I will pitch in the membership workshops but I will get the concept out there in response to this. I would like to propose a Membership structure that satisfies Radical Inclusion and reflects the recommendations of the AFR but goes further to create options that bring together specific groups of participants. My idea is to have General Members with suitably minimal eligibility criteria, but then have other types of membership available to provide for specialised participants. This could be done by the introduction of Chapters.
It is important for us to focus on what the benefits of membership are. And the unique model of burner production and culture means that benefits and desires among members are going to be really variable. One way to resolve that is to have the One Size Fits All option but then also offer Chapters that could have their own budgets for funding towards their area of focus (Visual art/performing art/experiential installation/ecology/Research & knowledge sharing/Indigenous Culture). Members who are more engaged with any of these types of participation can then belong to the group that focuses on that interest. It creates a pool of talent to manifest shared goals and cuts out the noise we see on social media that mean you always miss opportunities to participate in interesting projects because it is either buried in a sea of other posts OR people are activating based on their social group...and then you get homogeneity and cliques...
Madeline Fountain ·Thu 28 May 2020 7:02AM
"Write the constitutions/rules in line with the entity being registered as a charity.
To achieve this liaise with the ACNC, and look at their suggested model rule inputs for both Associations and Companies Limited by Guarantee, to get material and possible clauses."
It is a CT recommendation that the ACNC template is used.