To clarify: in the question above “to close FoAM vzw” means discontinuing the legal entity of the 'vereniging zonder winst' (non profit association). There are linked issues of applying for funding, keeping the studio, having a collective and management responsibilities, but for for the sake of clarity of this conversation, these issues are kept separate. We focus only on whether or not it makes sense to keep the legal entity of a VZW open. Note that this discussion IS NOT about stopping the existence of FoAM as the collective, nor its activities. It is about what to do with the current legal entity from 2017 onwards.

Associations

To warm up for the conversation we looked at the individuals’ thoughts and feelings that arise when we ask the question “what if we close FoAM vzw”. The result was a clear dichotomy:

  • Chrysalis: associations related to a sense of closure and completion, opening up of new possibilities and new beginnings (and new nebulations); feelings of freedom to move, of no strings attached, of relief, return and spontaneity.
  • Loss: not having a VZW would make some types of work impossible, there was a sense of wasted energy and dispersal, paired with sadness and abyssal uncertainty. Aside from the feelings of things being 'gone with the wind', there are practical, legal and financial complications, related to “know your clients” and “anti-money-laundering”, i.e. FoAM’s good reputation that we built with banks, funders, clients, etc. This reputation and all the effort that went into it would be lost and anyone doing something FoAM-like would have to restart from scratch. There is a sense that the structure of the vzw in its current form is unsustainable, but to have it completely disappear might be a waste.

Aside from this dichotomy one of the associations was: Why?. Upon further inquiry the question was: why close a legal entity that could be useful to the members and their potential projects. The answer is another question: “who wants to carry the legal and financial responsibility for FoAM vzw post 2017?” This question opens a whole other Pandora's box of issues which are not directly relevant to the question “what if we close FoAM vzw”, but it is a question worth coming back to closer to the end of 2016.

Early in the discussion we talked about an in-between solution that isn’t as drastic as complete closure: a hibernating vzw: we can officially put the organisation to 'sleep' which minimises legal requirements. For example, if we have no activities in 2017, the VZW is 'asleep', and then in if there are new activities in 2018 it is quite simple to 'activate' the vzw again (or so we presume, this is to be verified).

Known, presumed and unknown

What do we know for sure? What can we safely presume? What do we not know about closing FoAM as a vzw?

Known
  • Without a VZW (or with a VZW in hibernation) here would be no day-to-day management required and the overhead costs would be minimal.
  • We would have no studio: no physical and psychological location to bind us
  • We would lose the benefits of having the non-profit legal structure
    • reputation
    • track record
    • some types of funding wouldn’t be accessible
  • The vzw facilitates particular types of collective collaborations, which would be more difficult to establish as individual free-lancers. Looking at it from the other direction, the work we do together will determine what we do with the legal entity.
  • Some of us would not be able to do the work they are currently doing (e.g. catering, applying for funding from some foundations, etc.)
  • A minimum requirement for the FoAM as a collective to keep existing (with or without a legal entity) is the online infrastructure (websites, emails, mailing lists, libarynth…). Without the vzw this is still possible, but new agreements would have to be made about the governance and the finances - which we’ll have to make anyway with the different studios in the coming months.
  • If we keep the vzw but stop structural funding, we can shrink the governance structure back to a minimum of 4 members of which 3 act as board members. The roles can rotate as well. This means much less overhead related to governance, AGMs, membership etc.
Presumed
  • FoAM is a collective entity in its essence, from a content/mission perspective, as well as legally. We are not just a random collection of individuals, but a group of people sharing a philosophy, ethics, etc.
  • Without the vzw and the collective work, individuals would have to 'fend for themselves' in the marketplace, as freelancers or employees. This would likely mean working more commercially to be able to survive. The choice of work might be more financially motivated than up to now, the artistic/cultural quality could suffer and there would be less time for experimentation.
  • It is very likely that there would be more financial stress for each individual. In general: more stress, less time.
  • “I would be alone” - if the collective wasn’t there, the bundling of energies would dissipate. In this point it became clear that we need to more clearly separate the issues surrounding the legal entity and the collective - we don't necessarily need the VZW to work collectively.
  • In the current economic and political situation, “it is always useful to have legal entities around” - you never know when they might come in handy.
  • Up to now the funding and the legal entity have in some ways shaped the type of work we do. For the next period, we would like to find out how we want to work without worrying about the legal structure.
  • The current funding (for the vzw) encourages stability (and in some ways stagnation): we can't suddenly grow much bigger if the work we do needs us to.
  • We presume that the minimum legal requirements for the active VZW is to have 1 AGM per year and submit the 'jaarrekening' (the yearly financial report) to the appropriate authorities. We should check this with the VSDC (Vlaams Studie en Documentatie Centrum voor VZWs - the association for associations).
Unknown
  • What is the situation with compliance and liability to funders after we would close the vzw? E.g. what happens if there is an EC audit? We might still have to be 'on call' for a while, with or without a legal entity, in which case, why close it and lose all the benefits?
  • What are our obligations for keeping financial archives after closing the VZW (tax and other authorities? As with the point above, we would still have to keep the archive, we think for about 7 years, so it doesn’t make much difference if we close the organisation or keep it in hibernation.
  • What are the costs associated with closing a VZW? We don’t think it’s much, but what would be the benefit? What are the costs of keeping an organisation in hibernation (e.g. bank accounts) and what are minimum costs for keeping FoAM active, but simple to govern?
  • Legally what does it mean to close an organisation? What happens to the distribution of assets (furniture, equipment, collections of books, etc.)?
  • What are the legal and financial obligations for a VZW in hibernation?
  • Regardless of the legal obligations, how would we go about distributing all the STUFF we accumulated over the years?

Conclusion

Keeping the legal entity of FoAM vzw is a separate issue from:

  • whether or not to keep the studio
  • how the organisation is governed
  • how and on what do we work together.

If the question is whether or not to keep the legal entity in existence, the answer became simple: yes we should. Taking into account all the pros and cons, we decided that closing the vzw would take quite a bit of effort and might prematurely close some doors to prospective funding and collaborations. Whether we keep the VZW active or in hibernation post 2016 depends on the developments in the next year (e.g. lab_for_rituals, follow-up of future_fabulators, as well as on the needs of members (e.g. catering, workshops)). It might become more relevant to explore how to realise FoAM's original business plan consisting of an ecology of organisations where the VZW is fed by its for-profit spin-offs.

The conclusion of the conversation is:
WE KEEP THE LEGAL ENTITY FoAM VZW (until further notice)

In order to address the unsustainable elements of the current structure (among others: heavy operational and governance overhead) we have to find out:

  • What are the minimal requirements of an active vzw and of a hibernating vzw? How can a vzw be activated after a period of hibernation? Maja/Pieter to contact VSDC, Barbara to talk to Marc (sometime in autumn).
  • What do we do with the studio? A follow up discussion to be had about this in autumn, after several experiments as agreed in the studio conversation in March.
  • How do we want to work as a collective and a network (without structural funding)? To be discussed at the FoAM retreat and other individual ponderings and collective conversations over the coming year(s).
  • Who wants to carry the legal and financial responsibility for FoAM vzw post 2017 (board, director(s), core team, or another governance structure)? To be discussed in 2016, when it becomes clear where the collective is going…