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Cascadia Radical Faerie Resource
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Favero asked a series of excellent questions after reading the proposed bylaws of the Cascadia Radical Faerie Resource. Scotty Dogg provided thorough answers, based on his own perspective as an active participant in the meetings.Dear Sweet Favero, It was good to see you again at the Breitenbush re-entry heartcircle! As promised, here are some thoughts on the proposed faerie non-profit corporation. This letter has taken longer to prepare than I expected (my apologies!) and it's of greater length than I originally intended. Nevertheless there is still much left unsaid, so I hope we can soon speak in person. I look forward to having dinner with you in the next few weeks in order to discuss this in more detail. As soon as I know the exact dates that I'll be in Seattle, I'll give you a call. I would welcome other faeries who are interested / concerned about the faerie nonprofit to join us for dinner & dialogue -- please pass the invitation along as appropriate! Here are the questions you asked, followed by replies: 1. How will financial liability be limited by incorporating? Currently, the Queen Registrar (QR) and others who make the gathering happen face several different sources of financial liability. To keep this short, I will mention only three: contract liability, tort liability and tax liability. Twice each year, the QR signs a legally-binding contract with Breitenbush which requires her to pay around $33,000 for a closed camp, meals & amenities (this figure is based on attendance of 160, the number at the last Fae2K). A $24,000 minimum must be paid whether any fairies show up or not. As things now stand, the QR is personally, individually responsible for honoring this contract. [1] The problems which would be posed if there was a registration shortfall (or any other crisis in which the QR was not able to pay the full amount) are not hypothetical. In the past, several gatherings were under-attended to the point where the QR was required to make up the difference out-of-pocket. Of these, the most dramatic example is probably the first summer Breitenbush (summer '92), which came up seventeen hundred dollars short. The agreement with Breitenbush, with Rebecca as the contact, was successful only in the fact that we had a great time. The gathering fell short on finances, and Breitenbush was on the verge of filing suit against Elderberry, when an "angel" stepped in the following year and paid the difference. Incorporation changes the legal situation here: if the QR were to sign the Breitenbush contract not as an individual, but as a representative of "Cascadia Radical Faerie Resource, a not-for-profit corporation," Breitenbush & other creditors would be entitled to the assets of the corporation if a shortfall occurred (in practice, this would mean all the money in the Faerie bank account), but creditors would no longer be entitled to the QRs personal assets. This is a significant difference! Now that the Gathering is well-established, some people do not think it possible that there could ever be a financial shortfall again. But in fact, I can envision a number of scenarios which would leave the QR without enough funds. The responsible thing is to work and hope for the best, but plan for the worst. A second risk that QRs now face is a liability lawsuit. Personally, I believe that this risk is quite a bit smaller than the chance of financial shortfall, but no one can say it's impossible (the times that we live in, sadly, become more litigious each day). As things presently stand, if such a suit were to be brought, the gathering organizers (particularly the QR) would very likely be named in suit along with Breitenbush. If the plaintiff wins, the Breitenbush Community will be somewhat shielded by its insurance policy (up to the amount of the coverage), but no one will protect the QR -- her portion of the award (and legal fees) would come from personal assets. (Depending on the suit and how wealthy the QR happens to be, this could easily mean total bankruptcy.) A particularly sad aspect is that many QRs could not even afford a lawyer at the beginning of suit, making their chances of defending against it much lower. If the QR were a representative of a corporation, the corporation could be sued, but its officers and representatives would not be individually (financially) liable. Again, a significant difference! I should say here that liability protection for individuals through incorporation is not perfect -- depending on the circumstances a good lawyer might find several different ways to chip away at it -- but in general this sort of protection has stood the test of time. (People who have tried to sue the officers of large corporations for environmental damage have found that these laws work far too well!) And any liability protection would be better than what we have now -- none. A third legal risk, now held mostly by the faerie bank account signers (QRs and others who handle money are also somewhat at risk), is tax audit. About $75,000 a year now flows through the faerie bank account. Since we don't yet qualify for a corporate account, we now have a joint personal checking account with Dan Jones (Katie), and Bill Line (SisterWumn) as signatories; hence, the social security numbers of those individuals are attached to the faerie bank account and the Breitenbush moneys. Also, some QRs have private accounts where they keep gathering funds; when this is the case, the QR's social security number becomes attached to a chunk of the money. All of this money looks as if it comes from an income-producing business, as far as the IRS and state tax agencies are concerned. Without non-profit status, if any of the people who handle faerie funds were audited, they would be asked to cough up a substantial amount of back-taxes (you and I both "know" that they don't "really" owe tax on this money--but the IRS doesn't!). There has been sufficient concern about the possibility of an audit that Breitenbush funds are now kept in a non-interest-bearing account (so that the bank won't have to file a tax report on the interest each year with IRS). If we could "safely" keep the funds in an account which pays interest, there would be enough interest income each year to pay for nearly one scholarship. More important, I don't think that it's fair to ask anyone to hide funds from the IRS and risk all sorts of legal headaches. It is not a coincidence that Bill and Katie have taken the lead in forming this corporation--I haven't asked them about this explicitly, but I believe that they think that after the corporation forms they will most likely be out of a job. Despite this, they still support incorporation. If faeries wait to incorporate until after we get into a tax mess, then incorporation might well be viewed with suspicion--as a creative way of dodging a tax bill. Again, it will be far easier to be pro-active than to run damage-control after problems arise. 2. How will it be determined that a consensus/majority of faeries support incorporation? First, the proposed corporation is open to any faerie who shows up and says "I'm interested; I want to be involved." Or, quoting directly from the proposed bylaws: Section 2. Qualifications. A person shall become a member of the corporation by providing contact information to the Secretary, indicating thereby that they want to be placed on the mailing list for business meetings and be a member of the corporation. No one has yet suggested a formal procedure for validation (would you like to propose one?), but I can talk about how I suppose it might happen. The group of faeries meeting to discuss business concerns, incorporation, and bylaws already has a mailing list of about 44 faeries who have asked to be kept informed of meeting times & agendas. Last summer we made a consensus decision to test the new bylaws--so even though the working-group hasn't incorporated yet, for almost a year it has been following most of the rules (including notice requirements) set forth in the proposed bylaws. Instead of mailing just to the small list, I suppose that prior to incorporation we might do a mass mailing to all 1200 faeries on the Breitenbush Gathering mailing list. In it, plans for incorporation would be briefly described, and the Fae2K/business web site mentioned (which contains a copy of the proposed bylaws). The letter would offer to mail a copy of the draft bylaws to any faerie upon request (not all faeries have web access). It would also offer membership in the corporation (in the event that incorporation takes place) and describe how to become a member. There would then be a comment period, followed by a final meeting at which the decision to incorporate would be made (if there is sufficient interest among Seattle faeries, there could be two final pre-incorporation meetings: one in Seattle, one in Portland. Similarly, if faeries anywhere else want to have meetings about this and participate, great.) Continuing to speak personally [2], my hopes are twofold: first that the process will be as inclusive as possible (I sincerely believe that consensus decisions produce the best and wisest policy--tempered by collective wisdom from the decision-making group); but second that we will act swiftly. While these two hopes may seem to be at cross-purposes, my reasons are for wanting fast action are pragmatic--the working group is very burned out. I would be willing to explain why in more detail later; for now I will just say that the most important and central feature of the way in which we have been working--consensus decision-making--is also exhausting (except in very experienced groups). [Does this mean that we should drop it and go for an "easier" method, like majority vote? In my view, this would be the worst choice we could make! Consensus decision-making has been at the very core of our faerie traditions (for over 20 years); this, and the tradition of heart-circle, are two of the most important elements that distinguish us from the outside world-in synergistic combination, they move us toward making faerie space loving, inclusive, and safe. I believe that the only way to maintain our integrity is to do the hard work, and learn to make decisions better using consensus (while conserving our energy). This is a subject that I hope to write more about in the future.] 3. What additional financial costs are expected because of incorporation? Mass mailing to all faeries on the Breitenbush list: printing costs $50 + postage (0.33 * 1200) = $446. One-time legal fees (paid to Cynthia Cumfer); I suppose these will be under $1000. (Because she's a dyke and a friend of Leo's, she's charging us 1/3 of her usual rate.) A one-time fee to the state of $20. A $10 yearly maintenance fee. Possibly some minor bank fees to change the bank account over to a non-profit, corporate, interest-bearing account. The bylaws require that notices be sent out to all members twice a year for semi-annual meetings, various kinds of special meetings, proposed amendments to the bylaws, etc. How much it will cost to send out all these notices depends on how many faeries are interested enough to join. For example, if 15% of the people on the Breitenbush mailing list decided to join, this would mean around 180 members. ~180 * 0.33 (postage) = ~$60 per mailing. If three full mailings go out each year to members (that's two general meetings and one special meeting--a reasonable guess), then the yearly mailing costs of the corporation would average around $180 (~2/3 of a Breitenbush scholarship) [3]. From the proposed bylaws: "Directors shall not receive salaries for their Board services, but may be reimbursed for expenses related to Board service." To sum up, the additional financial costs expected because of incorporation depend on how many people decide to join and (ultimately) what the Board decides to do. If I had to take a wild ballpark guess, I would suppose that $1500 in one-time (start-up) costs, and $250 per year annual budget would be reasonable figures. 4. The stated purpose in the incorporation papers is vague. What is the specific purpose of incorporating? (What is meant by support as it appears in the proposed bylaws, article 1., paragraph 2?) The primary purposes of incorporation are to establish a corporate identity which can legally and collectively hold the group's funds (now held by individuals); provide limitations on personal liability for gathering organizers (in contract & tort); and establish clear tax status (i.e., officially establish that Gathering funds are not "business income," and should not be taxed). All of these purposes support the Gathering. A secondary benefit: incorporation will provide continuity and stability for the Breitenbush Gathering. In my view, support for the gathering will mean designating a pool of supportive, experienced people that the Queen Registrar can call on for help and advice--if she needs it. Some past QRs have commented that they did not have much in the way of a support network; others have asked for a QRs "handbook" or advice manual [4]. Past QRs would be asked to contribute to such a beast. Many would volunteer to be on-call as consultants and advisors. Most QRs have a big enough network of friends, including past BBush queens, that they have all the ready-made support that they need. But problems have arisen in the past when an inexperienced faerie who is isolated from the mainstream (and from faerie "elders") took on the role of QR. This has happened several times, with mixed results. Several QRs suddenly quit when the realization hit them that a big, complex job lay ahead (this has happened as late as 3 months before the Gathering!). A more fortuitous outcome occurs when an inexperienced QR decides not to quit if she becomes overwhelmed, but instead asks an experienced co-queen to help with logistics. A third possibility is that QRs with very different styles will work together from the start and negotiate some division of labor (e.g. logistics & ritual). The Breitenbush gathering has had more than a few unusual pairings among QRs, such as the partnership between Lupin (logistics QR) and Jaycinth (ritual QR). [5] In addition to continuity and stability, it is expected that the corporation will provide a sense of history (archives) to the Gathering. How else might the corporation provide support for the Gathering? By making sure that there always is a Queen Registrar, so that if an unplanned vacancy occurs the gathering can go forward! What happens if the queen registrar gets sick or resigns in late October, when the call for winter gathering is due to go out? (As I said, this has happened several times in real-life.) Without a small group of designated people whose "job" it is to care when this happens, the vacancy can persist for a long time without anyone noticing (especially if the QR resigns without first calling for help). I wish this idea were just speculative, but it's not. Riversong told a riveting story about the time he found out that he was QR -- he called a friend to ask why the call for winter gathering was a month late, and was told "Unless you do it, there probably won't be a winter Gathering!" When it's November and you find you have a week to become the Queen Registrar -- now that's baptism by fire! [this answer will be continued in question #5] 5. Will the role of the Queen Registrar change? If so, how? Nothing about the way that the QR comes forward to assume the position will change. In any situation short of crisis, the Board absolutely does not choose the QR. Further, it is explicit that the Board must fully delegate its power to the QR in all matters relating to gatherings. Here is what the proposed bylaws say about the Queen Registrar(s): Section 5. Delegation of Authority for the Purpose of Creating Gatherings. Nothing in these bylaws shall be construed to limit the power and affirmative responsibility of the Board to delegate all necessary authority for the creation of gatherings to such persons who step forward, in the traditional manner, to assume such responsibility. Persons acting with authority delegated under this section shall be deemed officers of the corporation for the purposes of Article VI: Corporate Indemnity. But consider the situation just described in question 4 -- the QR suddenly resigns in late October. Here a crisis exists, and the Board has a responsibility: its job is to be aware of what's happening with the Gathering -- to give a shit and to do something. In a case like this, Board members would probably have an emergency meeting; they would ask around very quickly and find someone willing to take over for the QR who resigned, so that the Gathering could go forward. Elderberry, who has been QR for two gatherings, wrote: "The role of the QR will only change in that the burden of liability will no longer be shouldered by the individual(s) who sign the contract." To this I would add that the QRs role will not change, but there will be more support available for queens who request it. But for the sake of argument, let's consider a worst-case scenario: for some reason the Board has become packed with five former QRs who collude ignore the bylaws and interfere with a gathering [6]. Of course, all five would have to agree in full consensus to do this (which is very, very unlikely). Under the proposed bylaws, meetings to choose Board members are held every six months (terms are staggered and last for two years). Board members are chosen by consensus of the full membership. If someone feels that an entire five-person board has interfered with a gathering, the odds are remarkably good that they will be able to walk into the next meeting (in less than six months) and knock one (maybe even two) members right off that board -- since the Board is chosen by consensus, our disgruntled faerie can do this by himself, even it he doesn't have any friends. (Just be careful -- one of the hazards of deposing a faerie leader is that you may be asked to prove that you can do better!) If even one member of the board is replaced by someone who thinks differently, a consensus to repeat the mistake will no longer be possible. [6] 6. Will the duties/role/power of the corporation extend beyond the Breitenbush gathering to other events? The draft bylaws do not describe any other duties/role/power for the corporation beyond providing support for the Gathering. Neither is it prohibited from engaging in other activities. To examine this question, I will wax philosophical: "What is the nature of power?" (I mean, in this particular context.) You gain power over things because you "own" them (right?). You gain power over events when you are the initiator; over projects when you take them on; over events and situations when you understand them from inside-out. It is ridiculous to suppose that the Cascadia Radical Faerie Resource would have duties, a role, or power over other Radical Faeries; or be in any way responsible for events that we did not initiate or organize. Nomenus incorporated in 1981, and it was one of the very first groups of faeries to do so. Yet today the members of Nomenus are still a tiny fraction of all Radical Faeries, and no one imagines that Nomenus "runs" the Faeries! (I suppose that trying to do such an absurd thing would be like herding cats!) Nomenus is still only responsible for the gatherings that it produces (Beltane and the Nomenus Spiritual Gathering), and for the land that it owns at Wolf Creek. If the Cascadia Radical Faerie Resource at some point in the future decides to host other events (in addition to the Breitenbush gathering), buy land, or do something else that is now unforeseen, I have confidence that such a decision will be made by faeries that you and I trust, who will work by consensus. My confidence is not blind -- consensus decisions, by nature, tend to be evolutionary, not revolutionary. As for Board members that both you and I trust -- the Board itself is chosen by consensus (in a meeting in which any faerie can participate). If you, I, or any other faerie blocks consensus during selection of the board, the person who is blocked will not be able to serve. 7. Will Breitenbush (or other events) become a 'members only' event? Absolutely not. This has never been suggested or contemplated. Only the corporation has members, and entry to this is completely transparent -- just show up, and you're in. The corporation will focus on financial and business affairs relating to the Breitenbush Gathering. What does it mean to be a member? First of all, you have declared yourself interested in the business affairs of the faeries, and want information about semi-annual meetings, proposed amendments to the bylaws, etc. (This sounds obvious, but early on in this process we found that many [most?] faeries who attend the Breitenbush Gathering did not want the responsibility of automatically being made part of the corporation [7]. So -- anyone can join, but they need to actively declare membership.) Members participate in the consensus process for choosing five members of the Board of Directors. What else does it mean to be a member? Members and non-members alike are encouraged to attend board meetings and committee meetings. In case of any kind of unusual or "unexpected" meeting, there are special notice requirements, so that people who might want to participate in the meeting will not be caught unaware. From the bylaws: Meetings of the Board of Directors shall be open to all Radical Faeries. And, In accordance with our tradition of open meetings, the Secretary shall keep a list of members who have stated that they wish to be contacted when special meetings are held; these members shall be given notice by the same method and at approximately the same time as Board members. Similar notice requirements occur in two other sections of the Bylaws. 8. What effect will creating a legal organization have on a group that by nature is unorganized? This is hard to predict, but I like to think that the proposed organization is a pretty good match to the way that we already do things. The group will probably be fairly small. QRs will still come forth spontaneously to claim their position. Today we have an unorganized circle of people who care about the Gathering; after incorporation we will have a loosely-organized group of people who care about the Gathering, and five of them will serve on a Board. Elderberry writes: "It will save our ass if and when an unforeseen incident occurs and the QR is named along with Breitenbush in a liability claim or criminal action." Whether incorporation has an effect on the faeries -- or not -- corporate identity, liability limitation, and clear tax status offer considerable benefits. If you carefully read the proposed bylaws, you might conclude that they suffer from an excess of openness. This was not by accident: openness and inclusivity are core values shared by members of the working group. It's reasonable to ask whether we have emphasized these values to the point of burdening the corporation with an unworkable decision-making process. (In the past, many decisions were made without full input from concerned parties just because no one knew that a matter was up for consideration.) Whether the present (disorganized) process can survive in so much sunshine is a legitimate question. As I have stated before, I hope that it can -- I believe that open meetings and consensus decision-making lie at the very heart of our faerie tradition; these are far too important to be considered "expendable." But I have no illusion that we will be able to use consensus to make decisions about real issues, such as money and people, with ease. This decision-making method requires maturity and thoughtful reflection from each individual. That's a tall order, but I've seen it done in other communities. We will have to first educate ourselves, and then help faeries grow into this. 9. What effect will having a group, that by nature is unorganized, have on a legal organization? This is a great question! Can the office of Secretary of State (which registers non-profit corporations) withstand the effects of Faerie Dust?? Tune in next week!. . . But seriously. . . There will be a few "basic minimum" bits of legal housekeeping that the organization will be expected to keep with. The most basic is that we need to file annual statements (a simple one-page form -- this exists mostly to keep make sure that the organization's address is up-to-date), pay a $10 annual fee, and possibly keep a copy of amendments to our bylaws current with the Secretary of State. The good news here is that the basic minimum housekeeping is simple enough that if there is even one responsible person in the organization, he can take care of it each year. We will want to follow our own bylaws. This means that there needs to be a responsible Secretary, who reminds the Board to schedule meetings with enough lead time to get notices out -- and then actually puts them in the mail. Queen Registrars are by nature marvels of organization among chaos -- the role of the QR remains unchanged. QRs will be expected to do what they've always done, in spite of being part of "a group that by nature is unorganized." (I'm not making fun of the question. It's true!) Aside from this, a key question is "Are faeries responsible enough to work together -- in a business context -- using consensus?" Consensus decision-making requires that all participants use self restraint, and maintain the ability to step away from personal concerns to look at a broader picture. Learning to make decisions quickly with consensus is difficult, and takes practice. Whether we can master this -- and teach each other -- is hard to predict. I hope that we can. The only way to find out is to do the experiment. 10. What are the expected benefits and incentives of membership in the corporation? It's likely that a fairly small number of faeries will want to be involved with the corporation. There are not many "perks" in membership for individuals. I see it mostly as a channel for people who want to help put on the gathering and give back energy to the faeries. Most faeries who show up and vote at annual meetings will probably attend from a sense of "civic responsibility." The advantages to the group as a whole, however, are substantial, as are the advantages to potential Queen Registrars, officers, and others who want to serve the group. Incorporation will mean that they do not put personal assets at risk. % % % The decision to incorporate as a non-profit is not rocket science. Nonprofit incorporation is the usual choice made by groups in all parts of the world which have not-for-profit incorporation laws (most countries have them). This is the standard legal choice for any non-profit group that organizes parties, camp-outs, or gatherings. Tens of thousands of churches (and church camps) are incorporated as non-profit organizations. Other examples: the YMCA (including Camp Westwind, where the Wings and Waves faerie gathering was held); the Boy Scouts; Triangle Recreation Camp, etc. etc. All of these groups have chosen to incorporate for pretty much the same reasons: to establish a legal owner for collectively-held property, to limit liability, and establish clear tax status. The benefits for our group would be similar. % % % One final thing: we would not be the first subset of "The Radical Faeries" (whatever that name means legally :-) to start a nonprofit: Short Mountain was first, followed by Nomenus. Also: Kawashaway Sanctuary (Minnesota), and now Faerie Camp Destiny (Vermont). At the moment, I believe that Zuni Mountain Sanctuary (New Mexico) and Destiny are using the Nomenus umbrella, but there are plans for separate incorporation for both of them. Starland is a new non-profit faerie venture (with land near Yucca Valley, CA). In England, Edward Carpenter Community faeries have long had non-profit status, as have similar groups in Australia and (I think) Eurofaeries in the Netherlands. Sister organizations, such as the Billy Club, have been incorporated as non-profits for years. Sweet Favero, I hope that this has been helpful. I plan to wait two or three days (to give you time to read this), then snail-mail a disk and hardcopy to Brooks-Bardin for their web site. Please share this with everyone who has questions about the proposed non-profit. I look forward soon to seeing you in person! Big puppydog hugs, Notes: [1] The BBush contract has several levels of fees, with one fixed amount to close the camp, and other per capita fees which causes the total price to vary with the number of faeries who attend. Thus, when under-attended gatherings have occurred in the past, the QR was not held responsible for the entire contract total, but for a substantial lesser amount. The exact amount that would be due if this happens again is not the main point; if an under-attended gathering occurs (for whatever reason), a very substantial chunk of change will be due -- an amount that most of us cannot possibly afford to pay out of pocket![back to text] [2] Remember, everything I just said in the last paragraph is merely Scotty's opinion--unlike the bylaws and other collective decisions mentioned earlier, it is not backed by any sort of consensus.[back to text] [3] Mailing costs could be cut substantially if e-mail is used for notices, but I think that the faeries should be very conservative about depending on e-mail for important correspondence! For one thing, e-mail addresses in the Breitenbush database are much less reliable than postal addresses. This is because snail mail for the Breitenbush Gathering is marked "Address Service Requested," so the post office sends us notice (in many cases) when faeries change their address--but no one tells us when a faerie gets a new e-mail address at work, or changes their ISP! I would like to congratulate the recent Queens (Michael & Steven) for a beautiful mix of new technology (web site, e-mail) and old technology (postal mailings, word-of-mouth) -- together they added up to truly-appropriate technology! Other gatherings ran into problems by assuming that it was safe to depend on e-mail to deliver the main call [if the faerie had an e-mail address listed]; but Michael & Steven showed us how new technology can be used very effectively to supplement [not replace] traditional ways of communicating.[back to text] [4] Real attempts have been made at the latter: Bill Line put together a "QR box," with sample calls from each gathering, past Breitenbush contracts, etc.; and both Rosemary and Riversong were working on Breitenbush Gathering archives last time I checked.[back to text] [5] All such examples illustrate the fact that a Breitenbush gathering only appears effortless on the surface -- fact is, it happens because of a lot of hard prep-work! Almost all of this work is done in advance: the contract & dealing with Breitenbush; sending the call; keeping faeries informed throughout registration; keeping records & finances; scholarships; scheduling main events; answering inquiries; cabin assignments; confirmation letters.[back to text] [6] A recent case in which there was friction between the QRs and someone else involved with the gathering lends support to creation of a non-profit organization with a board run by consensus. If you were QR and disagreed with a decision about the best way to manage the Gathering, would you prefer to: (A) Deal with a single individual, whose decision cannot be appealed as a practical matter?, or (B) Deal with a 5-person board, where decisions are made by consensus? If I wanted a decision that was not made arbitrarily, I would rather deal with the board![back to text] [7] Even if it were desirable to make every faerie who goes to Breitenbush an automatic member of the corporation, it would be legally unwise to do so, according to our attorney, Cynthia Cumfer. Oregon law provides that membership must be specific and well-defined, and that members must voluntarily join non-profit corporations. Memberships which are subsidiary to some other activity must be approached with great caution; and memberships which automatically "draft" a group of people are flatly illegal (thus, the basis for such corporations becomes legally invalid). The example that Cumfer gives is a neighborhood association which decides to incorporate as a non-profit. Bylaws which state "The members of this corporation shall be all residents who live in Bridge City on Main Street between First and Grand" would be illegal. In this example the requirement has been met that members be well-defined, but the bylaws still fail because membership is too passive -- it's simply assigned according to street address, without voluntary action taken by individuals in order to join. [back to text] |