Designing the operational model of your commons initiative

A Financial Permaculture approach

What is the difference between a company and a community?

A community is a group of people who work together around a common intention and shared assets to create services for themselves, often in a resilient way. In contrast, a company is a group of people who put money into the organisation in order to get money out.

Companies use business models, Communities have other models

A company needs a business model to clarify how this money will be created. A community needs a financial and operational model to clarify how the assets will be obtained and the services provided and paid for. Both companies and communities share some qualities, but there are some key differences as we will see as we work through this article.

Company financial modelling takes as its starting point the idea that people have two roles: producer and consumer. As producers they make money by selling to consumers. In the role of consumers they use their earned money to buy, among other things, the essentials of life. Consumers have the option to choose products and services that have more or less impact on people and planet, and as producers they have the challenge of finding a feasible level of impact against the price they can sell their goods and services.

Communities can use operational models

Permaculture ethics comprise
Earth Care, People Care, Fair Share.

Community finance (with a Permaculture approach) takes as its starting point the idea that people can come together and invest their time and money into creating places that, encompassing a fair share approach, provide the essentials of life (or some proportion of what they consider important) in way that cares for people and planet. From that point of view, people have one role: a villager.

Another starting point for financial Permaculture is that everyone owns a fair share and therefore they organise themselves into a community. It is the community that will work using the property and infrastructure to provide services for itself. Because of this no-one is only a consumer and no-one is only a producer.

What services to provide

No financial approach to Permaculture would be complete without taking into account the concept of a community that provided the basics of a roof over your head and food on the table. According to a recent study by Statistics Sweden, including meals bought from a restaurant and electricity and heating costs, food and housing make up about 50% of the average Swede’s monthly budget. This is probably true for most developed countries.


Given that many who come to Permaculture seek to find a path to resilient communities, investing to ensure food and housing security must be central. Note that community design does not intend to cover all the private economy of the members, only a percentage that creates security and peace of mind that the members’ ecological impact is minimised for those services.

Earth Care

Another part is designing the operation of the community so it takes care of the Earth. For example, if we are dealing with food then our model needs to encompass the chain of nutrient flow, and environmental impacts from field to table to field. This does not mean all of the community activities need to include all these steps, but that to fulfil the aim of Earth care the community needs to have control over the flow of nutrients.


The community should be small enough that everyone can talk to each other, and large enough to provide a variety of perspectives and experience and skills to be able to pool capabilities to address challenges.

When planning community size we use the rule of thumb that the maximum residential community unit should be 200 including children, and the ideal functioning cooperative business about 30 individuals. Of course, there are ways of making other size configurations work. Villages of 1000 could consist of say 5 divisions of 200 each.

Pay attention to the legal framework

Another thing to note about community is that the services the community provides for itself come under different laws that those sold to consumers where the community is, say a cooperative. As there are no sales to non-members the distribution of goods to members does not come under consumer law. This gives the community greater flexibility in distribution and less red tape to follow.

Consider, too, the circles many people find themselves moving in: the family and their work. With the loss of community and generations moving away to live in different parts of the country, or even world, in the traditional family you have to play many roles: adult, best friend, lover, parent, supporter, counsellor, etc. At work, the support and development you get will all be related to being more effective as a worker, and the relationships will be based on your roles at work.


In the consumer society, your own identity comes from the job you do and the money you can earn that enables you to pay for the activities and the possessions that can shape your life.

A strong, supportive community provides a third leg. It can give you the emotional support you need, the friends to help you out and those whom you help out, it can be an investment that provides food and housing reducing your dependence on your work and the pressure on your family. A community can be the lever to get you out of the consumer trap.

Consider, too the various cultures in the three spheres. The family sphere is one of the clan. The corporate sphere is one with a culture of competition. The community sphere is one of cooperation. All three may have their place; I happen to believe that providing the basics for human needs requires cooperation and is better served by community.

Community and kindness

People are more and more embracing the idea that community and kindness could to some extent replace corporation and consumption as the way to organize society. If you want to be part of that change, how could you go about it?

How to go about it?

One approach is, after having identified your tribe or community, to arrange the provision of services and money flows so money stays as long as possible in the community. Some call this plugging the leaks.

Take some ideas from conventional business

To understand about plugging the leaks it is good to review how conventional business works.

In business development, a company is often presented in the form of statements and an operational model (diagram) at organizational level. It is common practice to formulate a mission statement and business concept using “What do we do for whom and how?”

The MISSION is what do we do in terms of the good we want to bring, for whom is our target customers and how describes the value addition our operations bring.


Follow the red line to see the money flow from right to left, from customers to owners and suppliers. The legal entity – the company – is represented by the darker shade of grey. Note that the value added by the company is often limited to a few steps in the supply chain, for example, in food production many large companies only work with from producer to shelf in shop. Another thing to note is that the agreements between the various actors in this diagram are often secret. A customer cannot find out what prices the corporation pays for its raw materials. Finally, companies are often set up to leak money from a community. For example the company many have owners who are not resident in the community, and they may source their raw materials and components from outside.

The company is also a hierarchy. This diagram represents a common model but there are many others.


Starting up a business is often described in well-known steps, too.

  • 1. Formulate the business idea
  • 2. Find finance
  • 3. Test the idea
  • 4. Market it
  • 5. Distribute, deliver, sell.

Now. You have to understand that the only company that has your best interests at heart is the one you own.

So the question becomes, how can we redesign an organisation that we have ownership in and where the organization has our best interests at heart?

The community finance approach

The commons finance approach, or a financial Permaculture approach, uses an approach similar to one of starting a business.

We can start with vision in this case the benefits are for the people in the constellation

The first question of MISSION is “What we can do for each other and how?”

What we can do is often formulated in terms of security and resilience, rather than in the service we can provide. Rather than “deliver the freshest food from all over the world to your door” it could be “ensure the resilient supply of fresh food from locally grown sources.”

Community finance does not describe target customers. Rather, we identify people and organizations that will form part of an eco-system of collaborating entities. And they will be part of the organization from the beginning, not at the end of a marketing campaign.

“How” describes the value added provided by each entity. If the community aims to take control of its ecological footprint, then these chains will stretch from soil to soil and/or from rain to watercourse.

Starting up a services-providing community can be broken into steps, too.

  1. Identify the people and the place
  2. Based on what is at hand, work out what can be reasonably produced as common services
  3. Do a Permaculture plan ( Roughly, the layout and workings of buildings, land, water, machinery, etc.)
  4. Break the plan down into flows, as circular as possible.
  5. Identify machinery and infrastructure needed, work and skills needed Identify the money needed to acquire machinery and infrastructure, and how to finance the community.
  6. Decide on the most appropriate organisation form (s).

An operation model is still useful as a tool to describe the flows, including financial flows, in the community finance approach. In this case, the legal entity is everything within the dotted line in the diagram above. Customers and suppliers are now part of the organisation.



Here a a table comparing company and commons community

Company or Corporation  Community
Legal organisation as limited liability incorporated Legal form can vary, although one member, one share is common
Exists to give owners money as return on their monetary investment Exists to provide members basics in return for their investment of time and money
Provides narrow range of products/services as competitive specialty. Seeks niche or monopoly Provides basics, no niche or monopoly seeking
Starts small and aims to grow through increasing number of customers Has optimum size identified from beginning. Aims to provide services in best way to members
Roles include owners, managers, workers, consumers, suppliers in separate people Roles include owners, workers, managers and consumers in one person.
Competition among workers helps organization function Members supporting each others’ growth helps organization function

Read More

A great summary of what the commons is from David Bollier