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@ -166,19 +166,29 @@ createdBy: Jennie R.F.
## Session 6: Equitable Economics
### Pre-session
## Pre-session
* Create sample financial summary template to show
* Create sample financial summary template to show during the transparency section (slide 12)
### Post-session
## Post-session
* Share to Slack:
* [Seeds for Change finance resources](https://www.seedsforchange.org.uk/finance)
* Sample financial summary templates
* Reflection prompt: *What would change if you knew exactly what everyone in your workplace earned?*
* Tools mentioned:
* [CoBudget](https://cobudget.com/)
* [OpenCollective](https://opencollective.com/)
Share on Slack:
* Homework reminder with labelled types (studio conversation, studio + PS working session, noticing task)
* [Seeds for Change finance resources](https://www.seedsforchange.org.uk/finance)
* Sample financial summary template
* Reflection prompt: What would change if you knew exactly what everyone in your workplace earned?
* Tools mentioned:
* [CoBudget](https://cobudget.com/)
* [OpenCollective](https://opencollective.com/)
* [coop.love](https://coop.love/)
* Link to S6 Funding and Tax Landscape supplement
Message PS pairs:
* Share observation notes from the session (who reacted to what during compensation models, where tensions showed up)
* Confirm that IP ownership is now a full section in their studio support meeting this week, not optional
* Remind them to check whether the Session 5 governance draft / SOFT Miro board exercise happened
---

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@ -8,119 +8,140 @@ parentDocument: Session Guides
outlineId: e90f4170-5f49-4705-ac9f-c42214aaf73b
createdBy: Jennie R.F.
---
> **Session content:** See [Session 6: Equitable Economics](/doc/session-6-equitable-economics-VhhiZSc9Ej) for the full curriculum.
## What happens in session
## **What happens in session**
This session covers revenue sources, financial transparency, compensation models (equal pay, needs-based, role-based, hybrid), and profit-sharing basics. Studios discuss what financial sustainability means personally, explore open-book practices, and start thinking about what "fair" compensation looks like. The session connects financial decisions to the governance structures from Session 5.
This is a dense session covering revenue sources, financial transparency, compensation models (equal pay, needs-based, role-based, hybrid), profit-sharing basics, and IP ownership. Studios discuss what financial sustainability means personally, explore open-book practices, and start thinking about what "fair" compensation looks like. The session connects financial decisions to the governance structures from Session 5.
IP ownership is not covered in the session. It's been moved to the studio support meeting this week so studios can work through it in a smaller setting with your support.
:::tip
**Homework assigned:** discuss financial transparency (what feels vulnerable to share?) and compensation models (what feels fair?). These conversations are prep for the PS meeting this week.
Homework assigned: solo reflection (done in session), studio conversation about financial transparency, studio + PS working session on compensation models, and a noticing task about financial information flow. These conversations are prep for the PS meeting this week.
:::
### :eyes: **Your role during session**
### :eyes: Your role during session
* Observe how your studio reacts to the compensation models discussion – where do they light up? Where do they tense up?
* Listen for financial information gaps – who has financial literacy? Who doesn't?
* Observe how your studio reacts to the compensation models discussion. Where do they light up? Where do they tense up?
* Listen for financial information gaps. Who has financial literacy? Who doesn't?
* Note whether anyone avoids the personal financial sustainability question
* Watch the IP ownership discussion – this can surface unexpected disagreements, especially if someone brought existing work into the project
* During the breakout activity, sit with your studio and listen. Don't steer.
### 👆 **Your role after session**
### 👆 Your role after session
* Check that everyone understands the homework and is willing to have the financial conversations
* Note any immediate tensions about money that surfaced during the session
* Note any immediate tensions about money that came up during the session
* Make sure they know the tools mentioned: [CoBudget](https://cobudget.com/), [OpenCollective](https://opencollective.com/), [coop.love](https://coop.love)
* If tax credits or Ontario-specific funding questions came up, point them to the [S6: Tax Credits & Funding](/doc/32d7ced9-87f3-458a-a9bb-9f4c06bcff98)
## **This week's Studio Support Meeting: Financial Transparency and Compensation**
## This week's studio support meeting: Financial transparency, compensation, and IP
### **📚 Materials**
### 📚 Materials
* Compensation models reference (equal pay, needs-based, role-based, hybrid)
* Studio's Community Rule draft from Session 5 (financial decision-making sections)
* Studio's governance draft / SOFT Miro board from Session 5 (financial decision-making sections)
* Revenue sources overview from the session
### :world_map: **Context**
### :world_map: Context
Money is where values meet reality. This studio support meeting helps the studio have the financial conversations that most groups avoid. Your role is to create enough safety for vulnerability while pushing past surface-level comfort. These conversations don't need to reach decisions today – they need to *happen*.
Money is where values meet reality. This studio support meeting helps the studio have the financial conversations that most groups avoid. Your role is to create enough safety for vulnerability while pushing past comfort. These conversations don't need to reach decisions today. They need to *happen*.
### **👆 Before the session**
This week's meeting also introduces the IP ownership conversation, which was moved out of the session to give it the space it needs. It's a studio-specific topic and works better here than in a full-group presentation.
* Check in about whether they've started reflecting on the homework questions
* Review the studio's governance draft – what did they decide about financial decision-making?
### 👆 Before the session
* Check whether they completed the Session 5 governance draft / SOFT Miro board exercise. If they didn't, note it, but don't let it derail this week's meeting. You can revisit governance gaps later.
* Check in about whether they've started the studio conversation about financial transparency (the homework from Session 6)
* Review the studio's governance draft / SOFT Miro board if it exists. What did they decide about financial decision-making?
* Be prepared for this session to be emotionally charged
### **🌊 Session flow**
### 🌊 Session flow
#### **Check-in (5 min)**
#### Check-in (5 min)
"The session covered a lot of ground about money. What's sitting with you? Anything surprising – or anything you're dreading talking about?"
*The session covered a lot of ground about money. Anything surprising, or anything you're dreading talking about?*
#### **Financial transparency (15-20 min)**
#### Financial transparency (15 min)
Start with the personal reflection prompt from Session 5 homework:
"What financial information have you never been allowed to see at work. What might have been different if you had?"
What financial information have you never been allowed to see at work? What might have been different if you had?
Let each person share. This grounds the conversation in lived experience before it becomes abstract.
Then move to the studio:
**Prompts:**
Prompts:
* "What financial information would feel vulnerable to share with your studio?"
* "What would you need in order to feel safe sharing it?"
* "What's the minimum level of financial transparency you'd want in your coop?"
**Practical questions:**
Practical questions:
* "Who currently knows the most about the studio's finances? Is that a choice or a default?"
* "If you were to do open books – what would that actually look like? A shared spreadsheet? Monthly summaries? Full access to accounts?"
* "If you were to do open books, what would that actually look like? A shared spreadsheet? Monthly summaries? Full access to accounts?"
* "What's one step you could take this week toward more transparency?"
Don't push anyone to share financial details they're not ready to. The goal is *naming the discomfort*.
Don't push anyone to share financial details they're not ready to. The goal is naming the discomfort.
#### **Compensation models (15-20 min)**
:::warning
Don't let the studio skip the transparency conversation to jump straight to compensation. Transparency is the prerequisite. If everyone isn't on the same page about what financial information gets shared and how, the compensation discussion won't have a foundation.
:::
#### Compensation models (15 min)
Review the four models briefly:
* **Equal pay:** same rate regardless of role
* **Needs-based:** adjusted for members' actual financial situations
* **Role-based:** different rates for different roles
* **Hybrid:** base rate plus adjustments
* Equal pay: same rate regardless of role
* Needs-based: adjusted for members' actual financial situations
* Role-based: different rates for different roles
* Hybrid: base rate plus adjustments
**Discussion prompts:**
Discussion prompts:
* "What feels fair to you? Where do you notice tension between 'fair' and 'comfortable'?"
* "What would you need to know about each other's situations to decide together?"
* "Which model aligns best with your values?"
**Dig deeper:**
Dig deeper:
* "If you chose equal pay, what happens when one person is working 40 hours and another is working 15?"
* "If you chose needs-based, who decides what counts as a 'need'?"
* "If you chose role-based, who decides which roles are worth more – and doesn't that recreate hierarchy?"
* "If you chose role-based, who decides which roles are worth more, and doesn't that recreate hierarchy?"
You don't need to reach a decision.
#### **IP ownership – first pass (5-10 min)**
#### IP ownership (15 min)
If there's time, and only if the studio is ready:
This is the first time the studio is working through IP questions together. Frame it clearly:
* "Who owns the game you're making together?"
* "Has anyone brought existing work into the project? What happens to that?"
* "What happens to IP if someone leaves?"
"Before you can share surplus, you need to decide who owns what you're creating together. In traditional studios, the company owns everything and workers walk away with nothing. Cooperatives can do this differently, but only if you make the decisions explicitly."
If these questions create tension, name it: "This is the kind of conversation that gets harder the longer you wait. Notice where you're not aligned."
Questions to work through:
#### **Close (5 min)**
1. Who owns the game? The cooperative as an entity? Individual members jointly? If the coop owns it, what happens to that ownership if someone leaves?
2. What about work created before the coop formed? If someone brings existing assets, code, or designs into the project, do they retain individual ownership or contribute it to the collective? How do you value those contributions?
3. What happens if someone leaves mid-project? Do they retain any ownership stake in work they contributed to? Can they take "their" assets (character designs, code they wrote) with them? What's the difference between leaving voluntarily vs. being asked to leave?
4. What happens if the studio dissolves? Who controls the IP? Can one member buy out others? What if you can't agree?
==This is the kind of conversation that gets harder the longer you wait.==
Not deciding means defaulting to whatever legal structure you eventually incorporate under. Worst case is realizing too late that everyone's expectations were mismatched.
The studio doesn't need to resolve all of this today. The goal is to find where they agree and where they're uncertain.
#### Close (5 min)
* "What's one financial conversation your team has been avoiding?"
* "What's one concrete step you can take before next session?"
* Remind them: Session 7 is about conflict – and money is often where conflict shows up first
* Remind them: Session 7 is about conflict, and money is often where conflict shows up first
### :star: **Tips**
### :star: Tips
If someone shuts down:
@ -128,7 +149,7 @@ If someone shuts down:
If the group avoids specifics:
* "Saying 'we'll figure it out later' is a to avoid financial conversations. Try to think of a specific decision to discuss today."
* "Saying 'we'll figure it out later' is a way to avoid financial conversations. Try to name one specific decision to discuss today."
If one person has significantly more financial literacy:
@ -136,25 +157,29 @@ If one person has significantly more financial literacy:
If there's a clear financial power imbalance:
* Don't force anyone to disclose. But you can note: "Financial differences affect power whether you name them or not. The question is whether you address it openly."
* Don't force anyone to disclose. But you can note: "Financial differences affect power whether you identify them or not. The question is whether you address it openly."
If they want to decide compensation now:
* "You can start with a provisional model. Try it for a period, then revisit. Consent-based: is this good enough for now, safe enough to try?"
### **🏁 After the session**
If IP ownership creates real tension:
* Note how the financial conversations went – where was there openness vs. avoidance?
* Don't try to resolve it in this meeting. Help them identify specifically where they disagree, and make sure they know this needs to be resolved before incorporation. If it's heated, suggest a dedicated conversation with just that topic on the agenda.
### 🏁 After the session
* Note how the financial conversations went. Where was there openness vs. avoidance?
* Note any power dynamics around financial literacy or financial resources
* Note any IP ownership disagreements – these need to be resolved before incorporation
* Bring observations to your PS check-in
* Note any IP ownership disagreements. These need to be resolved before incorporation.
* Bring observations to your PS check-in, especially anything that concerns you about studio dynamics
## :triangular_flag_on_post: **Red flags to watch for**
## :triangular_flag_on_post: Red flags to watch for
* One person controlling all financial information or decisions
* Someone minimizing their own financial needs to match the group
* "We don't need to talk about money yet" – avoidance that will become a crisis later
* "We don't need to talk about money yet": avoidance that will become a crisis later
* Financial plans that assume best-case scenarios with no contingency
* Major gaps in financial literacy that no one is addressing
* IP ownership assumptions that haven't been discussed – especially if someone brought pre-existing work
* IP ownership assumptions that haven't been discussed, especially if someone brought pre-existing work
* Compensation discussions where one person's opinion is treated as the default

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@ -6,7 +6,9 @@ parentDocument: Session Content
outlineId: 7d969dbb-eff0-43a1-a017-c80c470dac79
createdBy: Jennie R.F.
---
> **Peer Supports:** See [PS Guide: Session 6 — Equitable Economics](/doc/ps-guide-session-6-equitable-economics-2TJJWj4zWu) for your role during session and this week's studio support meeting.
# Session 6: Equitable economics
> Peer supports: See [PS Guide: Session 6 - Equitable Economics](/doc/ps-guide-session-6-equitable-economics-2TJJWj4zWu) for your role during session and this week's studio support meeting.
## Welcome
@ -15,46 +17,52 @@ Tag Yourself
---
## Intro – 5 min
## Intro - 3 min
Last session you designed governance structures. Now we test them on the hardest topic: Money.
Last session you designed governance structures. Now we test them on one of the most complicated topics: money.
In traditional studios, financial information is hoarded. If the boss says we can't afford raises, how do you know that's true if you don't have access to the books? If you've been the victim of the sudden shuttering of a studio, you probably didn't see it coming, because you never saw the real financial picture.
Most of us have complicated feelings about money. Gender, race, disability, class, and other factors related to our identities and experiences affect both your actual access to money and your comfort talking about it. If you've been excluded from financial education or generational wealth, that shapes how you engage with it with your team-mates.
Secrecy entrenches power. In a cooperative, we have the opportunity to bust this wide open.
Before we start: take a minute to notice what comes up when you think about your studio knowing your financial situation. Excitement? Dread? *You don't need to share it, just think about it.*
In traditional studios, financial information is hoarded. If the boss says we can't afford raises, how do you know that's true if you don't have access to the books? If you've lived through the sudden shuttering of a studio, you probably didn't see it coming, because you never saw the real financial picture.
Secrecy entrenches power. In a cooperative, we have the opportunity to reject that.
---
## Check-in – 10 min
## Check-in - 8 min
Last session's homework asked you to discuss: *What does financial sustainability look like for you personally? What would you need from this project?*
Last session's homework asked you to discuss:
1. What does financial sustainability look like for you personally?
2. What do you need financially to be able to continue to commit your time to the studio?
Anyone want to share what came up in that conversation?
*And think about what financial information have you never been allowed to see at work?*
*And: what financial information have you never been allowed to see at work?*
---
## Part 1: Where money comes from – 15 min
## Part 1: Where money comes from - 12 min
We're going to talk about transparency and sharing in a bit. But we want to start with the good stuff!
We're going to talk about transparency and sharing in a bit. But we want to start with the good stuff.
Where does money actually come from for game studios and creative cooperatives?
Most sustainable studios don't rely on a single revenue stream.
Where does money actually come from for game studios and creative cooperatives? Most sustainable studios don't rely on a single revenue stream.
### Member contributions
* Member shares – equity buy-in when you join
* Member loans – members lending to the co-op, sometimes with interest
* Sweat equity – labour contributed before there's money to pay wages
* Member shares: equity buy-in when you join
* Member loans: members lending to the co-op, sometimes with interest
* Sweat equity: labour contributed before there's money to pay wages
### Grants and public funding
* Arts councils – Ontario Arts Council, Canada Council
* Industry programs – Ontario Creates, Canada Media Fund, etc.
* Arts councils: Ontario Arts Council, Canada Council
* Industry programs: Ontario Creates, Canada Media Fund, etc.
* Municipal and regional funds
* Project-specific grants
@ -64,16 +72,17 @@ Grant funding can hide your real operating costs. If grants are covering everyth
:::
\
### Revenue from work
* Publisher advances and deals
* Platform funding – Epic MegaGrants, id@XBOX etc.
* Platform funding (Epic MegaGrants, id@XBOX, etc.)
* Client work and contracts
* Direct sales
* Crowdfunding
* Service/contract work – porting, QA, art assets, sound design for other studios
* Adjacent creative work – animation, writing, interactive installations
* Knowledge work – workshops, speaking, consulting, teaching
* Direct sales and crowdfunding
* Service/contract work: porting, QA, art assets, sound design for other studios
* Adjacent creative work: animation, writing, interactive installations
* Knowledge work: workshops, speaking, consulting, teaching
### Investment and loans
@ -88,59 +97,57 @@ Grant funding can hide your real operating costs. If grants are covering everyth
* SR&ED
* Deductible patronage dividends (specific to co-ops)
These can be stacked!
These can be stacked.
:::info
**Ontario Adaptation:** [S6: Funding & Tax Landscape](/doc/491a3f7f-f423-4db6-a3fb-521895d2468c)
Ontario adaptation: [S6: Funding and Tax Landscape](/doc/491a3f7f-f423-4db6-a3fb-521895d2468c)
:::
*Some content above adapted from Effective Practices in Starting Co-ops*
---
### Credit unions and community lending aren't new ideas!
They come out of the same cooperative lineages we explored in Session 1: Black communities built mutual aid funds and credit unions when they were excluded from banks. Immigrant communities have practised rotating savings (tandas, susus, ROSCAs) for generations. The cooperative credit union movement itself grew from communities pooling resources because existing financial systems didn't work for them. When you're looking at these options, you're drawing on a long history of people building economic infrastructure for themselves.
### How do we choose what paths to pursue?
This needs to be a collective and intentional decision. Developing and maintaining these streams require time and effort that can eat into your actual game development.
*Coops have different capital options than traditional startups.* Venture capital doesn't work for us – VCs want big returns on their investment and eventually an "exit" (sale), which conflicts with worker ownership. On the other hand, we have access to funding streams that prioritize social impact over profit maximization.
Coops have different capital options than traditional startups. Venture capital doesn't work for us. VCs want big returns on their investment and eventually an "exit" (sale), which conflicts with worker ownership. On the other hand, we have access to funding streams that prioritize social impact over profit maximization.
Cooperation among cooperatives is one of the ICA cooperative principles we talked about a few weeks ago. When you do take on client or contract work, consider prioritizing work with other coops and solidarity economy organizations. This is a way we can build a "trade network" that helps everyone!
Cooperation among cooperatives is one of the ICA cooperative principles we talked about a few weeks ago. When you do take on client or contract work, consider prioritizing work with other coops and solidarity economy organizations. This builds a trade network that helps everyone.
So think about: What funding sources has your studio used or considered? What feels aligned with your values?
Credit unions and community lending aren't new ideas. They come out of the same cooperative lineages we explored in Session 1: Black communities built mutual aid funds and credit unions when they were excluded from banks. Immigrant communities have practised rotating savings (tandas, susus, ROSCAs) for generations. The cooperative credit union movement itself grew from communities pooling resources because existing financial systems didn't work for them. When you're looking at these options, you're drawing on a long history of people building economic infrastructure for themselves.
---
## Part 2: Financial transparency – 15 min
Every one of these revenue paths involves a relationship with someone: a funder, a client, a publisher, a collaborator. And every one of those relationships needs written terms. This is the thing that gets skipped most often, especially early on when everything feels friendly and low-stakes. But when there's no written agreement, the terms default to *whoever has more power or is willing to push harder*. Writing it down is how you make sure *everyone is protected, including you*. That's true for external relationships, and it's true inside your co-op too.
---
*Think about: What funding sources has your studio used or considered? What feels aligned with your values?*
## Part 2: Financial transparency - 10 min
### Why transparency?
* Financial secrecy is a tool of control
* Open books = shared power
* When everyone understands the money, everyone can participate in real decisions
Financial secrecy is a tool of control. Open books mean shared power. When everyone understands the money, everyone can participate in real decisions.
### Basic practices
* Share monthly financial summaries with all members
* Open-book policy (anyone can see the full accounts)
* Open-book policy: anyone can see the full accounts
* Make all compensation transparent (everyone knows what everyone earns)
* Plan budgets collectively – this practice is sometimes called *participatory budgeting*, where members have real decision-making power over how money is allocated
* Plan budgets collectively. This practice is sometimes called *participatory budgeting*, where members have real decision-making power over how money is allocated.
### Tips for accessibility
* Use plain language – not everyone speaks accounting.
* Use plain language. Not everyone speaks accounting.
* Summarize number-dense spreadsheets ("we have 8 months of operating costs in the bank")
* Create space for questions. There are no embarrassing questions about money – most of us were never taught this stuff.
* Visual dashboards can help. Tools like [CoBudget](https://cobudget.com/) or [OpenCollective](https://opencollective.com/) make finances visible, or even just a shared spreadsheet
* Create space for questions. There are no embarrassing questions about money. Most of us were never taught this stuff.
* Visual dashboards can help. Tools like [CoBudget](https://cobudget.com/) or [OpenCollective](https://opencollective.com/) make finances visible, or even just a shared spreadsheet.
### Tell the messy truth
@ -148,20 +155,18 @@ Transparency isn't just internal. When you're doing public-facing work like crow
### Common resistance
We have heard – what if competitors see our numbers?
We have heard: what if competitors see our numbers?
But for real – what's actually at risk versus what's just discomfort? Most studios aren't competing on secret financial information. Is this fear really about vulnerability?
For real, what's actually at risk versus what's just discomfort? Most studios aren't competing on secret financial information. Is this fear really about vulnerability?
*Resource:* [*Seeds for Change – Finance*](https://www.seedsforchange.org.uk/finance)
*Resource:* [*Seeds for Change: Finance*](https://www.seedsforchange.org.uk/finance)
---
## Part 3: Compensation models - 18 min
## Part 3: Compensation models – 20 min
How do cooperatives pay people? There's no single right answer, but whatever you choose should be transparent and collectively decided.
SO! How do cooperatives pay people? There's no single right answer, but whatever you choose should be transparent and collectively decided.
*we have tools to help you try out these models at* [*coop.love*](https://coop.love)
*We have tools to help you try out these models at* [*coop.love*](https://coop.love)
### Models to consider
@ -180,11 +185,13 @@ SO! How do cooperatives pay people? There's no single right answer, but whatever
* Pros: Familiar, can help attract specialized skills
* Cons: Can recreate the hierarchies you're trying to escape
*Hybrid approaches:* Base rate + adjustments, or equal base with different hours allocated
*Hybrid approaches:* Base rate plus adjustments, or equal base with different hours allocated.
Whatever model you choose, *think about: What do we collectively believe is fair, and can we talk openly about it?*
### Activity – 10 min
### Activity - 10 min
*\[Facilitator: by-studio breakout\]*
In studio groups, discuss:
@ -195,35 +202,36 @@ In studio groups, discuss:
Share back with the group.
:::tip
Funders like CMF have their own ideas about what roles are worth, and if your compensation model doesn't match their ranges, it can cost you the application. So you end up in this spot where an external funder is effectively setting your internal pay structure. How might your co-op handle that?
:::
---
## Part 4: Profit-sharing basics – 20 min
## Part 4: Profit-sharing and surplus - 14 min
### What is profit-sharing in a coop?
What is profit-sharing in a coop?
When the cooperative has surplus (revenue beyond expenses), how does it get distributed? This is fundamentally different from how corporations work.
When the cooperative has surplus (revenue beyond expenses), how does it get distributed? This works differently than in a standard corporation.
### Three types of money flowing to members
#### **1. Wages**
Payment for work performed. This is an expense, not profit-sharing.
1. Wages: Payment for work performed. This is an expense, not profit-sharing.
2. Patronage returns (or "dividends"): Distribution of surplus based on members' contribution to the coop, usually measured by hours worked. This is what makes coops different. Surplus flows to the people who created it, not to outside investors.
3. Member shares: Your stake in the coop. Usually a fixed amount you pay to join, returned when you leave.
#### 2. Patronage returns (or "dividends")
*Co-op shares are not corporate equity.* Co-op shares do not appreciate in value. When a member leaves, their shares are redeemed at par. Whatever they paid in is what they get back. Returns on share capital are capped by the co-op's own governing documents, and in most jurisdictions there's a statutory ceiling on top of that. You cannot attract investment by promising high returns the way a standard corporation can.
Distribution of surplus based on members' contribution to the coop – usually measured by hours worked. This is what makes coops different: surplus flows to the people who created it, not to outside investors.
The co-op model is built so that surplus flows back to members through patronage dividends, proportional to work, not capital. That's why patronage returns matter more than your share value, and why the distribution question is where the real design decisions live.
#### 3. Member shares
Your stake in the coop. Usually a fixed amount you pay to join, returned when you leave.
***Co-op shares are not corporate equity.*** This is worth thinking about carefully. Co-op shares do not appreciate in value. When a member leaves, their shares are redeemed at par. Whatever they paid in is what they get back. Returns on share capital are capped by the co-op's own governing documents, and in most jurisdictions there's a statutory ceiling on top of that. You cannot attract investment by promising high returns the way a standard corporation can.
The co-op model is built so that surplus flows back to members through patronage dividends, proportional to work, not capital. That's why patronage returns matter more than your share value, and why the next section is where the real design decisions live.
:::info
In **Ontario**, membership share dividends are capped at prime + 2% under the Co-operative Corporations Act. For the full Ontario funding and tax landscape, see [S6: Funding & Tax Landscape](/doc/491a3f7f-f423-4db6-a3fb-521895d2468c).
In Ontario, membership share dividends are capped at prime + 2% under the Co-operative Corporations Act. For the full Ontario funding and tax landscape, see [S6: Funding and Tax Landscape](/doc/491a3f7f-f423-4db6-a3fb-521895d2468c).
:::
@ -236,85 +244,50 @@ In **Ontario**, membership share dividends are capped at prime + 2% under the Co
### When to distribute versus when to reserve
This is a *values* conversation!
This is a *values* conversation.
* Build a reserve first. How many months of runway do you want before distributing anything? – there's no right answer.
* Distribute when you have genuine surplus, not just a good month
* Decide collectively if you want cash now or investment in the studio's future?
* Some coops allocate a percentage of surplus to a "collective account" for shared needs
* Build a reserve first. How many months of runway do you want before distributing anything? There's no right answer.
* Distribute when you have genuine surplus, not just a good month.
* Decide collectively: do you want cash now or investment in the studio's future?
* Some coops allocate a percentage of surplus to a "collective account" for shared needs.
### Incorporation context
Cooperative legislation is provincial in Canada, so the rules depend on where you incorporate.
*Ontario:* Worker coops can distribute patronage returns to members based on their labour contribution. There's flexibility in how you structure this – you decide the formula in your bylaws.
*Ontario:* Worker coops can distribute patronage returns to members based on their labour contribution. There's flexibility in how you structure this. You decide the formula in your bylaws.
*Federal:* You can also incorporate under the Canada Cooperatives Act, which has its own rules.
However you structure it, patronage returns flow to workers based on their labour – not to outside shareholders based on their investment. This is the legal mechanism that grounds worker ownership.
### Discussion
Any questions about how this would work for your studio?
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## Part 5: Who owns what you make together? – 10 min
We've talked about how surplus flows to members. Buuuut, before you can share surplus you need to decide *who owns* what you're creating together!
In traditional studios, the company owns everything. Employees have no claim to their creative work. When the studio sells or shuts down, workers walk away with nothing.
Cooperatives can do this differently with explicit decisions!
### Questions to discuss as a studio
1. Who owns the game?\n– the cooperative as an entity? individual members jointly? a mix?\n– if the coop owns it, what happens to that ownership if someone leaves?
2. What about work created before the coop formed?\n– if someone brings existing assets, code, or designs into the project, do they retain individual ownership or contribute it to the collective?\n– how do you value those contributions?
3. What happens if someone leaves mid-project?\n– do they retain any ownership stake in work they contributed to?\n– can they take "their" assets (character designs, code they wrote) with them?\n– what's the difference between leaving voluntarily vs. being asked to leave?
4. What happens if the studio dissolves?\n– who controls the ip? can one member buy out others?\n– what if you can't agree?
*Not deciding* means you're going to default to whatever legal structure you eventually incorporate under. Worst case scenario is realizing too late that everyone's expectations were mismatched.
However you structure it, patronage returns flow to workers based on their labour, not to outside shareholders based on their investment. This is the legal mechanism that grounds worker ownership.
### A note on sweat equity
If you haven't started selling your game yet and members are contributing labour without pay, how does that translate to ownership?
If you haven't started selling your game yet and members are contributing labour without pay, how does that translate to ownership or future compensation?
"Sweat equity" is complicated. Some coops track hours and convert them to ownership stakes. Others treat all founding members as equal regardless of hours contributed. However you do it, everyone needs to understand and agree to the approach.
*Use your Peer Support session to start this conversation. You don't need answers yet – just notice where you're in agreement and where you're uncertain.*
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## Closing – 5 min
## Closing - 7 min
Financial conversations can be really difficult. They reveal vulnerabilities, and tensions about values, fairness, and trust. There's so much space for conflict to show up here.
Financial conversations can be really difficult. They bring up vulnerabilities, and tensions about values, fairness, and trust. There's a lot of space for conflict to show up here.
In the next session, we'll build tools for navigating disagreement constructively.
In the next session, we'll build tools for navigating disagreement constructively. Money is often where conflict shows up first.
Think about: *Is there a financial conversation your team has been avoiding?*
### Solo reflection (2 min)
Take a minute to write down for yourself:
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*Is there a financial conversation your team has been avoiding? What makes it hard?*
## Homework (with Peer Supports)
This is private. You don't need to share it. But hold onto it for your peer support meeting this week.
### Homework
1. **Discuss financial transparency**
Studio conversation (before your PS meeting): What financial information would feel vulnerable to share? What would you need to feel safe sharing it?
Studio + PS working session: Work through the compensation models with your peer supports. What feels fair? Where do you notice tension between "fair" and "comfortable"? What do you need to know about each other's situations to decide together? List the non-project labour that happened in the last month (admin, communication, emotional support, onboarding, documentation). How much of that showed up in anyone's compensation?
1. What financial information would feel vulnerable to share? What would you need to feel safe sharing it?
2. What have you never been allowed to see at a workplace, and what would have been different if you had?
2. **Discuss compensation models**
1. What feels fair to you?
2. Where do you notice tension between "fair" and "comfortable"?
3. What do you need to know about each other's situations to decide together?
4. List the non-project labour that happened in the last month (admin, communication, emotional support, onboarding, documentation). How much of that showed up in anyone's compensation?
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Noticing task: Between now and next session, pay attention to when financial information comes up in your team. Who has it? Who asks for it? Who doesn't?