Shared funds

Before you start, open these pages: Cash / Shared Funds and Members / Memberships.

Can’t find one? It may be turned off for your business, or your account may not be allowed to open it. Ask the person who set up your FeePrime. They can fix both.

Many member organisations put money together and lend it back to members. A savings group. A cooperative fund. A tontine. A credit union in miniature.

A liquidity pool is that shared fund.

What a pool holds

A name, a currency, and a share price.

The share price is the unit. Members hold shares in the pool, and a share has a set value.

That is what makes each member’s stake in a growing fund something you can calculate, rather than something people remember differently.

Why shares and not balances

A shared fund is not a set of separate savings accounts. It is one pot with several owners, and it grows.

If you recorded each member’s contribution as a balance, the growth would belong to nobody.

Recording it as shares means each member owns a proportion. So when the fund earns, everybody’s stake is worth more in the same ratio.

That is the arrangement members thought they were joining.

   member A   40 shares
   member B   35 shares      one pot, three owners,
   member C   25 shares      proportions that survive growth

One currency per pool

A pool holds one currency, for the same reason a cash account does.

If your group saves in two currencies, that is two pools.

This is real money belonging to other people

Worth saying plainly, because it is what makes this course different from every other one.

Everywhere else, a mistake costs your business. Here a mistake costs your members. Often people who know each other, in a group that only works because everybody trusts the books.

So the controls from Essentials stop being paperwork and become the point.

A second person approving anything that touches the fund, so no one person can move members’ money on their own.
The audit trail, so every change has a name and a date against it.
Nothing deleted, so the record of what happened cannot be tidied away.

If your organisation only turns on maker and checker in one place, turn it on here.

Try it

On staging.feeprime.com, create a pool with a share price and give three members different numbers of shares.

Then work out each member’s stake by hand, and check it against the report.