The central idea of this agreement is that once a budget figure has been agreed on by the group, households can decide what their contribution to the group's costs will be. The decision will be supported by anonymous information that will help a household determine where on the economic spectrum it is located. If this process does not produce enough contributions, it can either be repeated or the budget can be rethought.
The group decides on a target figure (for monthly dues, consultants' fees, annual budget, etc.)
A committee receives anonymously an annual income figure from each household (e.g. the Adjusted Gross Income from last year's tax return).
The committee computes first the average contribution needed from all households to cover the target figure. Then a proposed sliding scale from 75% to 125% is computed. This sliding scale is published together with an anonymous graph depicting the economic variation among the households. The committee might indicate which contribution level roughly corresponds to which income level. Example:
|Average contribution needed||$4,000 (from 25 households)|
|Sliding scale:||$3,000 (75%) — $4,000 (100%) — $5,000 (125%)|
|Income distribution:||4 households||< $50,000 / year|
|11 households||$50,000 – $75,000|
|7 households||$75,000 – $100,000|
|3 households||> $100,000|
Each household decides on their own at which point on the sliding scale of contributions they want to be located for the budget period. In this decision, they can be guided by seeing how their income compares to other households. They can also consider whether they expect to make more or less money in the coming year. Further, they can freely decide to contribute as much as they feel comfortable with, in support of the less wealthy members of the community. The households indicate to the committee (still anonymously?) how much they will contribute.
The committee determines whether there are enough contributions to reach the target figure. If yes, the committee passes on the good news. Households firm up their commitment in some way and the process is over. If no, the committee passes on the bad news. First, households are asked to reconsider whether they might be able to contribute more. So, step 4 is repeated. If it still fails, the committee lets the group know that the budgeted figure will have to be reduced.