A genius funding structure from a Guatemalan village.

500 bales stackedThis exciting funding structure stacks up to blow double dips and structured debt out of the water. It is as close as you’ll get to poetry in motion, legally speaking.

This structure comes from impoverished villagers in Guatemala seeking to lift their lives away from the daily grind of tired survival into a place where life has a future. Trading out of poverty is the only possibility. This seems to be impossible because the villagers do not have a cent to spare to invest in making something to sell. All their money is used for food and that is still not enough. The villagers are so poor they only half function due to lack of nourishment. A lump sum is essential to break this cycle. The sum can be invested in something like a weaving machine, a cooker, seeds, chickens. Then the villagers can weave, bake, grow or sell eggs and lift themselves out of poverty, without dying of hunger first.

Finding a lump sum looks like a gigantum task, doesn’t it?

The villagers devised this funding structure:

The structure

A group of twelve villagers get together.

For a year, every month every villager puts ten dollars* into a pot. Each month this pot stacks up to 10 X 12 = $120*

This stacks up to a significant lump sum, enough to buy an oven, a weaving machine, chickens etc.

Every month one of the group of twelve is given that lump sum. This is repeated until the end of the year when every member of the structure has received a lump sum of $120* and contributed to every other group member getting a lump sum, too.

stubble 600The villagers have transformed their lives. For example, one girl purchased a weaving machine and is now saving up to complete her education and then qualify as a nurse.

No fees, no commissions, no security, and no interest rates. Humbling isn’t it?

This structure is not one I have worked on and never will because the only people this structure needs are mutual donors.

Watch the video here.

Wider application

This structure could be used in western communities too. I think we are ready for it as mass public funding sites like Crowdfunder, PledgeMusic and their surfeit of digital bedfellows tell us. Humanity wants to reach out and help others.


I came across this structure in an American Film ‘Living on One Dollar’ in which two young economic students immerse themselves in rural Guatemala surviving on a dollar a day as the villagers do.

Watch Living on One Dollar on Netflix, featuring Ryan Christoffersen, Zach Ingrasci, Sean Leonard, and Chris Temple.spending july photo 2.JPG

*theoretical figures to explain the structure

Death clauses parents of students are being asked to sign.

Are you a parent of a student? If yes, read this.

If your child is off to university in the next week or so, will they be staying in accommodation supported by a parent’s guarantee?

In theory, a guarantor (the parent) is called upon to make payments to the landlord if the student (the tenant) fails to do so. I have noticed a worrying trend in such documentation for extreme and unfair terms.

Below is an example, taken from a guarantee I was expected to sign in support of one of my children who was entering halls of residence at a university, which will not be named. For now.

This guarantee seeks to put the guarantor (me) on the hook for paying my child’s rent if he does not, as well as an unreasonable and long list of other obligations. The crowning glory in this particular document is that

“The liability of the Guarantor [ i.e. the parent] shall not be affected by:

the Tenant [ i.e. your child] dying or becoming incapable of managing its affairs.”

clause for story

Yes, that’s right. If my child dies the landlord still gets paid – for the whole year. This is grossly unfair. It is symptomatic of the greed of certain organisations benefiting from student financing. In this case, the corporate landlord which runs the university’s accommodation.

This is the tip of the documentation iceberg.

Ice cold and heavy handed pursuit of loan debt, unfair processes in the signing of documentation and a general desire to extract as much profit as possible out of my children’s further education are creating a frozen landscape of students’ futures.

In my view the loan arrangements are a political and legal time bomb with many issues including enforceability. It’s a meltdown waiting to happen.

I believe it is important that legal documents which seek to bind our children and us in the provision of their further education be fair. If they are not, they may well not work. Certainly the ones that I have seen would not bind anyone in law.

If you see a death clause like the one above. Do everyone a favour and put a big fat line through it before you sign the document, if you sign it that is.

Here is a film of me doing that: https://www.youtube.com/watch?v=QG_lC-Oe2C0&feature=youtu.be

I’ll be looking at this and more in Legal and Important.