response 1 of 22:

Nov 8 05:51 UTC 1994

Cooperatives fall under Chapter 11 of the Michigan Nonprofit Corporation
Act. "Non-profit" is necessary for 501(c)3 *charitable* status, but
not vica versa. The definitions are in Section 450.3103 and .3104
of the Michigan Compiled Laws. If I had a scanner, I'd scan them in.
The *key* definitions concern a corporation organized on a "cooperative
basis". Here are the definitions of that:

(4) "Cooperative basis" means:

(a) That each member has 1 vote, except as provided in this chapter or,
subject to section 1133.
(b) That the dividends, if any, paid on member capital do not exceed
8% per year.
(c) That the net savings are distributed as provided in section 1135.
(d) That business is engaged in for the mutual benefit of its members.

This type of organization is incompatible with serving the public, or
non-members, in any fashion, as that would be a violation of the
fiduciary duty to serve only the members.

response 3 of 22:

Nov 8 19:26 UTC 1994

As I recall the discussions, we wanted to adopt the Rochdale principles
as a model for how to run things; we didn't want to be a "cooperative"
in the legal sense, necessarily.

response 5 of 22:

Nov 9 02:13 UTC 1994

   Yup.

response 7 of 22:

Nov 9 06:06 UTC 1994

I was not a founder, but rather a finder of Grex.
When I found Grex, and Cyberspace Communications, they were already
healthy, in my opinion. I became a member, but I am comfortable only
with the idea of supporting Grex, not of "owning" any part of it.
Therefore I am not happy at all with the cooperative alternative.
I believe that the way Grex is organized now is fine. I do not
care whether the founders shared this opinion or not.

Let's look forward to the future, instead.

response 9 of 22:

Nov 9 13:51 UTC 1994

I'd like to ask popcorn to be more specific about what she thinks
a "cooperative" is, as distinct from its legal definiton, and what it
is that she thinks Grex should be doing to be more like her concept
of a "cooperative". 

I suppose I want to ask Mary (#4) the same thing. A legal cooperative
cannot do community outread and "good deeds" if they cost anything,
as that would be using the property of the cooperative for other than
mutual benefit. It would, in effect, be stealing from any one member
that does not want their portion of the assets of the cooperative so
used. 
  
The other answer to Mary is, yes. There are no "hoops" for Grex to jump
through to meet 501(c)3 status, other than filling out the (arrgghh)
paperwork.

response 11 of 22:

Nov 9 18:16 UTC 1994

Seems to me that Grex already meets that criterion, *without* endangering
the freedom of Board members. The things for which dues-paying-members are
the only beneficiaries are such a minute fraction of the total Grex
environment - and it's not even done to benefit the members, but to manage
the resource. 

response 13 of 22:

Nov 9 23:18 UTC 1994

What currently distinguishes Grex is that it *gives away* to the public
most (90%? 95%?) of its functions. Grex has always done this (starting at
100%), and this (strange - but charitable) behavior seems to be what
defines Grex. Cooperatives give nothing away. *Both* have members that
cooperate closely toward the organizations' purposes, except one serves
the public, and the other serves their members. Is there any clamor to
change to a cooperative and serve just our members? 

response 15 of 22:

Nov 10 14:48 UTC 1994

Speaking of the PFC and serving only members, non-members can shop at
the PFC, but members get a 3% or 10% discount on their purchases, while
non-members pay full price.  They don't totally exclude non-members.

response 17 of 22:

Nov 10 17:46 UTC 1994

My feelings, the soft and squishy kind, are that Grex is more like a Co-op
than an nonprofit company. That's the feel I have. And, keeping telnet
or ftp to members only would definately fit in the membership/co-op thingie.

        Pattie

response 19 of 22:

Nov 10 22:46 UTC 1994

Re #15: PFC is not *giving away* anything to nonmembers (except perhaps
loss-leaders as sales promotional devices - did you think it was charity?).

We must distinguish carefully here between what the organization does, and
its "atmosphere", or social structure, etc., and how it is organized as a
business. There are co-op non-profits that have no internal "atmosphere"
at all (they *only* save *members* money by quantity purchasing), and
there are charitable non-profits that are the most social, friendliest,
places in the world (for many years, and even today, most of my close
friends, and my most enjoyable activities, come from participating in
charitable non-profits). And I'm sure we could find examples of the
opposite, for each. There is no necessary connection between the businmess
structure - coop or charitable - and the organizations "atmosphere". 

It seems to me that Patti is more concerned with the "atmosphere" of Grex
than with its form of incorporation. One can have the same "atmosphere"
with either, but there are some distinct advantages to the charitable
status, not the least of which are the tax deductibility of gifts, and the
opportunity for volunteer public service as members. 

I would like to ask Patti, what change in what she likes or dislikes about
Grex would necessarily change, with a change in the corporate basis from
charitable to coop? 

response 21 of 22:

Nov 12 08:09 UTC 1994

Well, you can cal me Ran a few times, if you would like, Pattie..;->.
(People did for years, in fact.)  In all the non-profits I've been
a board member of, or an officer of (now numbering 5), I *never* gotten
even a whiff of an IRS auditor within a thousand miles (even if there
are some resident closer). Its a non-issue, except during the application
phase.