MOU Funding Gap Model

FFW × UpClose — Operating Base Fee, Running Costs and secured funding, side by side

Working tool · internal use

Addressing Janet's concerns

Step 1 of 5

The founding principle

"Whatever was discussed and proposed to assist with raising awareness and funds could not cost FFW a cent."

That commitment from the 1 July meeting hasn't changed. What follows works through each of the four concerns raised — the fee's link to total income, Running Costs, the sponsorship commission, and the overall guarantee — and shows what makes that principle actually hold, not just what makes it sound like it holds.

"Using FFW's annual income is a non-starter"

Agreed — so it no longer does. The Operating Base Fee is now driven by active suburbs (proposed replacement for the 6.6 trigger), the same data UpClose already tracks to run the Chain, with FFW's income kept only as a backstop check.

  • No disclosure needed. Suburb count, sponsors signed, secured Chain funding — all of it is UpClose's own operational data. There's nothing for FFW to hand over, and nothing that depends on FFW remembering to mention a threshold was crossed.
  • It's self-funding almost by construction. Each suburb generates roughly R10,000/month in founding-plus-category sponsorship at current defaults — well ahead of what each fee-band step actually costs. The trigger and the funding are now the same number.
  • Income is still checked, just not as the trigger. FFW discloses total annual income once a year — a light certification, not a standing audit right (proposed backstop clause) — purely so anyone can confirm the fee still looks like a sane, declining share of FFW's overall size.
  • FFW's own fundraising events are excluded either way. A proposed carve-out (extends 6.6) keeps event entry fees and donations out of that backstop income figure — and confirms that scanning a QR code to invite runners to become spotters, donors or volunteers doesn't change that.
0Figures FFW must disclose to determine the fee band
↓Fee's share of income still falls as FFW grows — now just a check, not the trigger

"Running Costs are uncertain and difficult to budget for"

Fair — WhatsApp template pricing genuinely is the largest source of uncertainty in Article 7.1, and that's stated plainly rather than hidden. Two changes close the gap:

  • A cost ceiling FFW agrees upfront. Anything above it needs FFW's sign-off before it's incurred — no open-ended exposure.
  • A dedicated funding source. Wild Neighbourhood Index — estate/HOA biodiversity certification, developer data-packs, and corporate ESG partnerships, built on FFW's own spotter data and WhatsApp network — plus any telecom or connectivity partners subsidising messaging and data costs directly, is earmarked specifically to cover Running Costs. Neither touches UpClose's fee, so it can't be read as UpClose profiting from FFW's own income diversification.

"Do you have a method for tracking the commission?"

Yes — and the method changed as a direct result of this question. Commission under Article 8.6 now tracks FFW's actual receipt of sponsor payments, paid pro rata as the money comes in (Article 8.7), rather than as a lump sum on signing.

That gives a natural, auditable trail: sponsor payment received → commission calculated against it → invoiced. Nothing is ever paid against money FFW hasn't received.

Where this leaves FFW

With these four fixes in place:

  • The fee can't outrun money that isn't there — it's tied to funding actually secured.
  • Running Costs have both a ceiling and a dedicated, separate funding source.
  • The commission is auditable against real receipts, not assumed.
  • None of this can draw on FFW's general funds without FFW's explicit written agreement.

The 1 July commitment isn't just restated here — each concern that put it in doubt now has a specific, structural answer.

Want to see the numbers behind this? The interactive model is below — entirely optional.

The interactive model (optional): the Running Costs range and "other named funders" figures below are illustrative starting points. Suburb sponsor defaults are 6 suburbs, each with a R60,000/year founding sponsor plus 2 category sponsors at R2,500/month — adjust to match the real position before relying on any scenario.

Where does the fee outrun the funding?

Bars = monthly obligation by active-suburb band · lines = secured funding

Fee as a share of FFW's income

Annual Operating Base Fee ÷ FFW's total annual income — the "declining proportion" the MOU describes
Why base the fee on active suburbs, with income as a backstop?

The case for suburb-scale as the primary trigger:

  • UpClose already has this data — no disclosure needed. Active suburbs, sponsors signed, secured Chain funding: all of it is generated by UpClose operating the Chain itself. Nothing depends on FFW volunteering a figure, and nothing can be quietly forgotten.
  • It tracks what UpClose is actually delivering. More suburbs is a direct, observable increase in the platform UpClose is running — a cleaner answer to "why does UpClose get paid more" than total income ever was, since total income could rise for reasons that have nothing to do with UpClose's effort.
  • It's self-funding almost by construction. Each suburb generates roughly R10,000/month in founding-plus-category sponsorship at current defaults — comfortably ahead of what each fee-band step costs. The funding and the trigger are now the same underlying number, which is why the fee side of the model runs a surplus at almost any suburb count.

Why keep the income figure at all: as a backstop, not a trigger. FFW still discloses total annual donation and grant income once a year (a light certification, not a standing audit right — see the proposed clause), purely so anyone — Janet, an auditor, the Management Team — can check the fee still represents a sane, declining share of FFW's overall income. It just no longer decides the band.

Closing the remaining gap — nothing for nothing: suburb-scale answers "why does the fee track something real," but each higher band should still come with a genuinely larger scope of delivery, not just a larger number:

BandFeeScope
0–4 suburbsR12,000/moChain platform operation + strategic advisory
5–8 suburbsR20,000/mo+ scheduled marketing execution (content calendar, campaign creative)
9–16 suburbsR28,000/mo+ development support (platform features, integrations)
17–24 suburbsR35,000/mo+ periodic video production
25+ suburbsR45,000/mo+ priority allocation across all of the above

Illustrative only — these tiers still need sizing against real hours and named deliverables, and writing into a schedule before they mean anything to FFW. Capacity risk is lower than it looks, though: this isn't a solo-bandwidth promise — Bradley can draw on a team of operational professionals for the marketing, development and video work, so the higher bands are realistically deliverable rather than resting on one person's hours.

Three protections, not one: the fee is driven by a number UpClose can observe directly (no disclosure gap), it's checked against FFW's actual income as a backstop (no silent drift), and it comes bundled with a genuinely larger scope at each step (no paying more for the same work).

One line for the room "The fee now tracks the suburbs UpClose actually operates — not your income — so there's nothing for you to disclose to move it. Your income is only checked once a year, as a backstop, to confirm the fee still looks sane against your overall size. And each higher band comes with more delivery, not just a bigger number."

Variables

No longer determines the fee band — that's now driven by active suburbs, below. This figure is disclosed annually under the proposed backstop clause, purely to check the fee still represents a reasonable share of FFW's income.
The more suburbs onboarded, the more this pool grows
One per suburb, sold exclusively — the anchor sponsor for that suburb. = R60,000/year
Named, non-overlapping categories (e.g. vet, nursery, estate agent) — each exclusive within its own category per suburb
= R30,000/year, per category sponsor
Total suburb sponsorshipR0
Per monthR0
UpClose commission (20%, Art 8.6)R0
Net new to FFW (80%)R0
This is new sponsorship money UpClose brings in — the commission split doesn't draw on FFW's existing income. The suburb pool itself is treated below as the natural source of backup funding for the Operating Base Fee (Article 6.4).
Any additional committed funding not captured above — a founding Anchor Tenant guarantee, a matched-gift sponsor, a corporate spotter team.
Total secured, per monthR0
Largest uncertainty is WhatsApp template pricing (Article 7.1)
Source: estate/HOA biodiversity certification, developer data-packs, and corporate ESG partnerships — built on FFW's own spotter data and WhatsApp network.
Modelled range from the research: Year 1 R50k–120k, Year 2 R150k–350k, Year 3 (mature) R300k–700k. Earmarked entirely to Running Costs, not the Operating Base Fee — it's a technology/data product funding a technology cost, and never touches UpClose's fee.
Per month, toward Running CostsR0
One or more telecoms or data providers subsidising WhatsApp Business API, data bundle, or messaging costs directly — earmarked to Running Costs alongside Wild Neighbourhood Index revenue.
Per month, toward Running CostsR0

Operating Base Fee

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Running Costs

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How this is calculated

The Operating Base Fee moves through five bands (Schedule A) as the number of active suburbs grows — the fee itself is a fixed rand value per band, not a percentage of income, and it no longer depends on FFW disclosing anything to determine which band applies (Article 6.6, as amended).

  • Two separate obligations, tracked separately: the Operating Base Fee (UpClose's professional fee) and Running Costs (Article 7.1, platform/WhatsApp infrastructure) are economically different things. Funding for one can't necessarily be swapped for the other — a grant restricted to "technology costs" may not legally be usable to pay UpClose's fee. Pooling them into one number can overstate how well the fee specifically is covered.
  • Self-funding items (outside both gap calculations): the 20% Chain sponsorship commission (Article 8.6). It comes from new money UpClose brings in — FFW isn't giving up funds it already had.
  • The natural buffer for the fee: the Chain's own income model is suburb-based — a founding sponsor per suburb plus a defined set of non-overlapping category sponsors (vet, nursery, estate agent, etc.), each exclusive within their own category. Because the same suburb count now also drives the fee band, this funding scales in lockstep with the trigger by construction, not by hope — the practical realisation of the "backup sponsor pipeline" Article 6.4 describes.
  • The buffer for Running Costs: Wild Neighbourhood Index revenue (estate/HOA certification, data-packs, corporate ESG partnerships) plus any telecom/connectivity partners subsidising messaging costs directly, is earmarked here specifically — it directly answers the hardest-to-budget-for line in 7.1 without ever touching UpClose's fee.
  • The backstop: FFW's total income (disclosed annually under the proposed clause) no longer decides the band, but the tool still shows it as a check — confirming the suburb-triggered fee stays a sane, declining share of FFW's overall income, without ever being the trigger itself.
  • The open question: each obligation is only as covered as its own dedicated funding, not the combined total. This tool shows both individually, plus a combined reference figure — clearly marked as reference only, since the two pools aren't interchangeable without FFW's agreement.

Scenarios

On chartScenarioBandFee gapRC gap% of incomeStatus
No scenarios saved yet — adjust the variables above and save your first one.