Where the money quietly moves

Most writing about community money is about how much. Entry, monthly, exit. That matters, and it is covered elsewhere.

This lesson is about something slower: what happens to a community’s economy over decades, when income does not quite cover costs and nobody has to decide anything dramatic. There is always a way to close this year’s gap. The question is what closing it repeatedly does to the twenty-fifth year.

The three

• The commons sold to cover the shortfall — each sale funds another year, and the thing being sold is the thing that made the community possible
• Finances nobody can inspect — not hidden, exactly; just held by two people and never actually looked at
• Contribution that stops being shared — some members pay their way out of the work, and the arrangement is fine until it is the norm

Two communities, one pressure, opposite answers

This is the part of the guide with the strongest evidence behind it, and both cases are documented by the communities themselves.

The Findhorn Foundation is a registered Scottish charity, so it files audited accounts. In July 2023 it announced its configuration was no longer financially viable; educational programmes ceased after 22 September, and the trustees’ report records that “During October and November, 48 staff left the Trust on a redundancy basis, with a core team of 10 staff remaining over winter 2023 and spring 2024.” The report names Brexit, Covid, fires that destroyed two community facilities, and energy costs.

But the sentence that matters is not about any of those:

“We have for over 30 years sold non-core assets to enable the Foundation’s work to continue in spite of financial deficits, but the scale of our recent and forecast losses means that this is no longer a viable option.”

Thirty years, disclosed by the organisation itself, in a document an auditor signed. Alongside it: “The Foundation’s financial position has been weak for many years.”

The Farm, in Tennessee, hit the same wall in the early 1980s: by its own account it was spending “$10,000 a week” against income of “around $6,000”, having taken on “$100,000 in debt overnight” when a crop froze in Florida, plus hospital bills over $100,000.

Its answer went the other way. In 1983 it abandoned full communalism. Businesses were “privatized, owned by their principal managers” and had to start paying their employees; each adult took on “$100 per person, plus an additional $35 a month per person to go towards paying down our debt.” The land and the common assets stayed common. Within four years, by its own account, the community was debt free.

Why it is hard to see

Because the annual decision is always defensible. No year’s asset sale is the mistake. The mistake is the pattern, and a pattern is not a thing that appears on any agenda.

Because the alternative is worse in the short run. The community that refuses to sell has to cut something people care about, this year, in front of everyone. The community that sells has a slightly smaller commons and an unchanged programme. One of those conversations is much harder to have.

And because the accounting is honest. Findhorn’s position was in its audited accounts the whole time. The information was never hidden. It was simply not the kind of information anyone reads as a trajectory.

Which of these will be there next year?

Five lines from a community’s income last year. The run rate is not the budget — it is the gap between what recurs and what does not, and working it out means classifying each line honestly. Assume the community needs about €95,000 a year to operate.

1. €18,000 from selling a strip of land along the north boundary to a neighbour.

One-off — this year only correct answer Right, and the follow-up question is the one that changes the conversation: how many more of these are there? A community closing an €18,000 gap from land sales, with three saleable parcels left, has three years. Findhorn’s own audited accounts record over thirty years of selling non-core assets to cover deficits — no single year of which was the mistake. Recurring — it will be there next year Only if there is another strip, and then another. That is precisely the arithmetic communities avoid doing: each sale is defensible on its own, and the pattern never appears on an agenda because a pattern is not an agenda item. Recurring, but only while something else lasts Closer than it looks — the something else is the land. But treat this as income of any kind and you have already made the choice the lesson is about, which is whether the model or the commons is the fixed variable.

Where this comes from

2. €24,000 in course fees. It has been between €21,000 and €26,000 for six years.

Recurring — it will be there next year correct answer Right. Six years of a stable band is about as good as evidence gets for a small organisation, and this is the kind of line a run rate is built on. Worth knowing what it depends on — a venue, an accreditation, two people who teach — but on the numbers alone this recurs. Recurring, but only while something else lasts Everything is conditional on something eventually. Six years of stability is real evidence, and treating solid recurring income as fragile makes the run rate as useless as ignoring the fragile lines does. One-off — this year only Nothing here suggests that. The discipline of the exercise is to be equally honest in both directions, or the number it produces is just a mood.

3. €30,000 drawn from the reserve fund to cover the winter heating bills.

One-off — this year only correct answer Right, and it is not really income at all — it is last year’s surplus being spent again. A reserve fund with a stated purpose exists so that this is a decision somebody has to make and record. Drawn quietly, twice, it becomes the way the winter gets paid for, and the reserve is gone in the year the roof goes. Recurring, but only while something else lasts Defensible arithmetic — it lasts as long as the balance does. But classifying a reserve draw as any kind of income is the error itself: money already earned, counted a second time, in a year it was not earned in. Recurring — it will be there next year A reserve that funds operating costs every year is not a reserve. This is the clearest case in the set for the rule that shortfalls should not be funded from capital without a decision at the constitutional tier.

Where this comes from

4. €12,000 from a regional grant. It is a three-year award and this was year two.

Recurring, but only while something else lasts correct answer Right, and the useful version of that answer has a date in it: one more year. This is the most common way a community is surprised by a gap it could have seen coming — the grant was in the budget for three years running, so it stopped feeling like a grant and started feeling like income. Recurring — it will be there next year It will be there next year, and not the year after. That distinction is the entire value of doing this exercise more than twelve months out. One-off — this year only Too pessimistic, and being wrong in this direction has its own cost: a community that writes off a year of funding it actually has may cut something it did not need to cut.

5. €9,000 that does not appear anywhere, being what the community would have paid for the bookkeeping, the maintenance and the bookings if one member were not doing all three unpaid.

Recurring, but only while something else lasts correct answer Right, and the something else is a person. This line is invisible precisely because it never enters the accounts, which is what makes it the most dangerous entry in the set: the community discovers the number on the day that member is ill, resigns, or finally says no. Put it in the run rate anyway — with the name of what it depends on beside it. Recurring — it will be there next year It has recurred for years, which is why everyone has stopped seeing it. But nothing obliges it to recur, no agreement records it, and the person doing it is usually the last to raise it. One-off — this year only It is the opposite of a one-off — it is the line most likely to have been there, unremarked, for a decade. The reason to count it is that a community which cannot see it cannot replace it either.

Where this comes from

If it is already happening

Work out the run rate, once. Not the budget — the gap. How much of last year’s costs were covered by something that will not recur: a sale, a legacy, a grant, a reserve draw. That single number is the diagnosis, and most communities have never calculated it.

Then ask what those have left to give. A community funding a €40,000 annual shortfall from asset sales, holding perhaps €120,000 of saleable land, has at most three years — fewer once the cost of selling comes out, and fewer again if any of it is restricted. It is the value that matters, not the number of parcels, which are rarely worth the same. Said aloud, that changes a conversation which has been circling for a decade.

Separate the two decisions. Can we afford this model? and what should we sell? get answered together and should not be. Answering the second first is how thirty years happens.

What prevents it

A reserve fund Reserve fund Money saved each month against future major works. A community with enviably low dues is often one that is not saving, and the bill arrives later. with a stated purpose, and a rule that operating shortfalls may not be funded from capital without a decision at the constitutional tier. The point is not to forbid selling. It is to make selling a decision rather than a default — which is precisely what it stops being when it happens every year.

Sources & further reading

1. 1 RCOS stress tests — Economy & Resources — the three documented patterns this lesson covers, in specification form
2. 2 Findhorn Foundation — Trustees' Annual Report, year ended 31 March 2024 — audited accounts, Scottish Charity SC007233 — the source of every Findhorn quotation here
3. 3 The Farm — Why The Farm Survived — the community's own account of the 1983 Changeover, and the figures quoted here
4. 4 The Farm — Tennessee Encyclopedia — the cooperative structure, the population figures, and that departures preceded the change
5. 5 RCOS Core — Layer 3: Economic & Resource System — the commons register, treasury transparency, and limits on accumulation

Written by EcoHubs members, with AI assistance for drafting and editing, and reviewed by a person before publication. Facts are checked against the sources listed; anything we could not verify is marked. How this is written