Great questions, arkmundi. Here are some answers and links:

Sounds a lot like a Cooperative Bank (see http://law.justia.com/massachu…..c.html).  To what
extent have you reviewed that form of banking incorporative, deemed it
relevant or not?

By regulation, mutual banks — like credit unions — must retain most of their profits. To understand why this is a problem, see this FAQ. Early versions of our business plan were based on the Cooperative Bank model, then later on the Community Development Credit Union model — before we discovered that we could build a more powerful system by combining the power of a stock-based bank with the spirit of a mutual bank or credit union.

Also, what is Common Good Finance?  Has it been incorporated?  If so,
how?

Yes, Common Good Finance Corporation is incorporated in Massachusetts. It is owned and controlled by Society to Benefit Everyone, Inc. (S2BE), a 501(c)(3) nonprofit organization that promotes community-based democratic economics (common good banks). Common Good Finance was established (1) as a vehicle for raising capital to cover the pre-opening costs of the first Common Good Bank and (2) as a name for the Common Good Bank Project, which under Massachusetts law cannot contain the word "bank" (since the project is not itself a bank). This was an unfortunately (but necessarily) complicated solution to a simple problem. Common Good Finance has no assets or employees of its own. All of its costs are covered by S2BE and it is in fact a collaborative project of S2BE and its many partners — a project to design and establish Common Good Banks.

At present, S2BE's Executive Director is the only officer of Common Good Finance. This is not a problem since S2BE controls Common Good Finance financially and S2BE is controlled by a nonprofit board of directors, with oversight by the IRS and the Commonwealth of Massachusetts. Once Common Good Finance has shareholders (and assets), it will be controlled by its shareholders rather than by S2BE and additional officers will be recruited.

I expect any contributions of time or money would go to CGF and be
responsibly managed by CGF.

Actually, no. All contributions of money go to S2BE (with oversight by the IRS and by the Commonwealth of Massachusetts). All contributions of time go to CGF and we (and this "we" includes everyone who contributes time) are doing our best to manage responsibly this ever-evolving rapidly-growing collaborative project.

What are my legal protections, rights & responsibilities as an
individual investor?

For investment of time, donations, and forgivable loans, see my answer above. For investments in the sense of stock purchases, all Massachusetts stock offerings are regulated by both the Securities and Exchange Commission (SEC, a federal agency) and the Commonwealth of Massachusetts.

In an effort to protect you, the individual investor, the SEC prohibits us from discussing the terms of any stock offering we may have unless we are already a bank or unless you are an "accredited" investor (meaning usually that you have a net worth of at least a million dollars). Which means that in general only rich people can make investment decisions. That is part of the system that we are working to change. For details, visit our investor page.

Post edited 8:17 am – April 27, 2010 by wspademan

I often hear that the Common Good Bank plan sounds too good to be true. People worry that it may be just another Ponzi scheme or flash in the pan. Obviously, as one of the principle organizers working on the project, I know that it's no scam, and after eight years it is clearly not a flash in the pan. But YOU don't know that.

Whether you are considering volunteering, making a donation, buying stock, making a forgivable loan, applying for a job, or just signing up to be a depositor, you are putting your time, money, and energy at risk, as some type of investment in the Common Good Bank project. You want to be sure that the project is sound, honest, and well worth whatever you put into it. Due diligence is in order. Here's what Wikipedia says about due diligence in philanthropy:

[T]he term “due diligence” in philanthropy refers to the process through which an investor (or funder) researches an organization’s financial and organizational health and capacity to guide an investment (or grantmaking) decision. The decision to fund or not to fund is based upon a balance of objective data analysis, insight into the general state of organizational health and stability, and intuition. A sound and thorough due diligence review is the process through which all the factors that make up that equation are uncovered and understood. It is the process in which a program officer seeks the “truth” about an organization.

Is the Common Good Bank Project worth investing in? We will use this topic to explore that question.