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Web Service Coop Outlandish
A web services consultancy based in London, Outlandish is a worker owned cooperative. They spend their member dividends in Cobudget as a way to fund new work that they care about. This is an interview with a member about how they have been using Cobudget.
How do they use cobudget? To democratically distribute their dividends to all cooperative members and make it easy for them to invest it in work they care about.
What type of activities do they fund? New tech products, social impact projects that need software, match funding of international initiatives.
Cobudgeting for Outlandish is the means of democratically distributing our surplus and enabling everyone to be involved in spending it.
At every quarter-end our finance team calculates our net margin (surplus) for the quarter. We use Toggl (time tracking) and some spreadsheet work to distribute the surplus proportionally to the amount that people have worked. We update people’s funds in Cobudget accordingly, by uploading the output of this spreadsheet in the tool.
There is no system integration with Cobudget - i.e. this is all a manual process.
We have guidelines on the types of project that can be proposed through Cobudget and who can propose them. These guidelines change over time, depending on the strategic direction of the coop. At the start there was an explicit tech-for-good focus; more recently the emphasis has been on investing in Outlandish’s mission, particularly helping grow Outlandish’s business.
When a project is fully-funded we run it as we would any other project. All the funds spent on the project are coded into our other systems, such that it is eventually accounted for as “noncommercial spending” in our accounting software (Xero) - i.e. it subtracts from our surplus.
Here are some interesting guidelines for Outlandish’s use of Cobudget:
- Cobudget is not for “business as usual” (BAU) work - it is spending our surplus. All BAU work should come out above the bottom line, not below.
- We discourage people from proposing and self-funding their own projects. I.e. we like to see multiple people buy into a project by contributing to the funding.
- We discourage people from “sitting” on their funds, and have discussed altering the distribution algorithm to correct for “hoarders”.
- Projects must be resourced and managed with the same rigour as external, client projects.
- 1.Daugher of Social Monitor: a big investment by Outlandish to develop an existing system into a product offering. With no sales opportunities in the pipeline, this is a great example of how Cobudget enables and encourages us to spend our surplus on long-term investment.
- 2.One of our favourite clients (a research organisation fighting corruption in Papua New Guinea) brought us a great project idea. We identified some additional tech we could build - stuff that would be good for them and interesting for us - so we _match-funded _their budget. This was a huge success, juxtaposed against some other failed projects where Outlandish provided 100% of the funding. It was an eye-opener just how complicated the maths can get around match-funding!
- 3.In the formative days of SuperGlobal, we Cobudgeted a small piece of work to contribute to the codebase of an international project team desperately in need of extra resource. This helped SuperGlobal understand what model to develop in their attempts to connect latent tech capacity in the UK with global organisations attempting social change.
- 4.NHS Cuts, Vote for Policies, Unelectable, Jeremy Corbyn’s Homepage: four projects that were spun up very quickly after the UK’s 2017 snap election was announced. Although the projects had mixed success, all of them were great examples of how Cobudget allowed the team at Outlandish to leverage our surplus to respond quickly and build the tech we wanted to see built.
Because we run Cobudget at the end of our financial process (i.e. we do all the accounts in a standard way, identify the surplus, and then Cobudget the surplus only) the overall impact on the way we make decisions about money and resources is limited.
That said -
It was easy to spend small amounts of surplus (<£5,000), because an individual member could sign this off themselves. But it was hard to do anything bigger than that because there was no defined framework on how to make those decisions.
This could have been defined without using Cobudget, of course. But with Cobudget, not only is the spending of the surplus now transparent, but anybody working at Outlandish can propose projects, and funds can be distributed directly to individuals. It is the combination of these three elements that make it so transformative for how we manage our surplus.