Bread Funds

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= UK version of the Dutch 'Broodfonds' Initiative, a mutualization of risk for the self-employed




"Bread Funds are a new way for self-employed people and freelancers to support each other if they become unable to work.

A Bread Fund is a group of 25 to 50 people who contribute money each month into a fund which can support any of its members who become unable to work through illness or injury. It operates by members supporting each other on the basis of mutual trust.

Contributions to the fund, and payments by the fund to its members, are in the form of gifts. You can choose from different levels of contributions: the level you choose is related to the income you would like to receive if you become unable to work.

If you become unable to work, after 30 days the fund can start providing you with a modest income. This can continue for up to two years, though most people get back to work within a few months.

If you decide to leave, you can if you wish to apply for your contributions to be refunded less admin costs and any gifts made, though anyone receiving support must stay a member for at least two years in total." (

2. Caroline Roberts:

"So how does a bread fund work? Most groups are built from local networks, but a few are industry-based. They have a minimum of twenty members to ensure adequate funds and a maximum of fifty. “Because they’re based on trust, you have to get to know other participants.” says Biba Schoenmaker, a founder of the first bread fund and partner in BroodFondsMakers (Bread Fund Makers). The Netherlands co-op was set up in 2010 to help establish and support new groups. “When you have more people, it will be more anonymous and maybe people will misuse the fund by asking for a gift when they’re not ill. When everybody knows each other, people won’t do that kind of thing,” she says.

The funds are managed by boards comprised of small groups of elected members, and are changed after a set period. The board organises regular meetings where members can get to know each other and new participants can join on the recommendation of an existing member.

Payouts are based on need and members can choose from eight levels of contribution. For example, for a monthly gift of €1,000, the contribution is €45 a month; for €2,000, it is €90. Unlike insurance companies, there is no risk assessment or medical questionnaire.

The money does not go into a central pot. Each member has their own separate bread fund account, which is managed by the board, so a sick member will receive a small monthly gift from each of the other members. If someone leaves the fund, they can withdraw their share, although exits are only allowed at two points during the year.

The main challenge comes when several members fall sick in the early days before the fund has built up a buffer. In this case, participants receive less then the full gift for a period of time. This has only happened once so far though, says Schoenmaker, and only 1% of bread fund members has asked for a gift. Nevertheless, contingency plans are in development. “We’re now looking at ways that funds can form alliances so that if one has a problem, the other can help,” she adds." (

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