> For the complete documentation index, see [llms.txt](https://docs.contributionism.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.contributionism.io/choosing-an-organisational-design/choosing-a-suitable-configuration.md).

# Choosing a suitable configuration

An organisation should select its configuration by working through its actual needs rather than beginning with a preferred label. The following process provides a practical starting point.

## **Step 1: Define the purpose**

State:

* Why the organisation exists.
* Its intended beneficiaries.
* Its main priorities.
* Any legal or public obligations.
* The activities it will and will not undertake.

A clear purpose makes later trade-offs easier to evaluate.

## **Step 2: Identify contribution relationships**

List the contributions the organisation expects to rely on. For each relationship, ask:

* Is compensation expected?
* Is the contribution ongoing or occasional?
* What risks are being accepted?
* How easily can the contribution be evaluated?
* Does the contributor need governance participation, financial protection or both?

Do not assume that the same person has only one relationship with the organisation.

## **Step 3: Separate asset ownership from governance**

Determine:

* Who legally holds assets.
* Whether assets are restricted.
* Who can authorise a sale.
* Who receives proceeds on dissolution.
* Which decisions can be delegated.

This is particularly important for public, charitable and common assets.

## **Step 4: Select a primary governance arrangement**

Possible arrangements include:

* Worker membership.
* Consumer membership.
* Public oversight with delegated operations.
* Donor participation within a protected mission.
* Multi-stakeholder representation.

Identify any groups requiring additional protection even if they do not form the primary governing body.

## **Step 5: Choose compensation mechanisms**

Specify how the organisation will handle:

* Current pay.
* Deferred obligations.
* Capital returns.
* Shared benefits.
* Contingent surplus distribution.
* Historical contributions.

Avoid creating multiple overlapping mechanisms without explaining how they interact.

## **Step 6: Define the lifecycle of rights**

For each right, document:

* Issuance.
* Eligibility.
* Duration.
* Transfer.
* Expiry.
* Renewal.
* Treatment on departure or death.
* Protection against amendment.

## **Step 7: Select a proportionate evaluation process**

Choose a method that the organisation can realistically maintain. A simple and consistently applied method may be preferable to a complex system that generates unreliable precision.

## **Step 8: Test difficult scenarios**

Before adoption, consider the response if any of the following happens:

* Revenue falls sharply.
* A founder leaves.
* An investor is not repaid.
* Members disagree about a valuation.
* A majority wants to change historical rights.
* A contributor takes extended leave.
* The organisation receives an acquisition offer.
* A distribution would leave insufficient operating reserves.

If the proposed rules do not produce understandable answers, more design work is needed.

## **Step 9: Document and review**

The organisation should produce a concise configuration statement covering its principal choices.

Review dates should be specified, but reviews should not imply that existing rights can be rewritten without protection.

## **Illustrative configurations**

A small professional cooperative might use equal member voting, role-based pay, shared surplus and a short time-period for rewarding people with dividends from future surplus.

A high-risk product organisation might use differentiated compensation, contingent finance, longer historical time-periods for receiving compensation from future surplus and defined founder leadership.

A public service might use public ownership, worker governance participation and performance recognition without private surplus ownership.

These are examples of configurations, not complete recommended legal structures.