A Look At Mutual Assistance Groups (MAG) Contracts
I wrote previously about how I had formed a family based Mutual Assistance Group (MAG). Most preppers think of a MAG as an unrelated group that is working together before and after SHTF. In fact, some people argued that my family based MAG was not a MAG at all, despite the fact it is planned to support up to 20 people. If you are trying to form an unrelated group, as opposed to a family based group, you need an agreement between the members that spells out how the organization will function. Everyone in the group should have a copy, and be fully on board with the agreement.
Some of the things that you should include in a MAG agreement would be:
- Goals: What is the group trying to accomplish? Are you trying to prepare for a certain length of time, or a particular type of event? Why are you forming a group rather than doing individual prepping? What do you intend to do on a group basis vs. individual basis?
- Organization structure: Within a family based MAG, organization is driven by day to day family structure. In the case of a group spanning multiple families, we are talking about organization of a group that does not routinely live and work together. Organization is required for both the preparation itself, and post-disaster operation of the group.
- Officers: Who is in charge? How are officers selected?
- Members: How does your typical member fit in?
- Family: Everyone has family. How do children, elderly relatives, etc. fit into the overall MAG?
- Requirements to join
- Financial
- Supplies
- Participation
- How can new members be added after the MAG has been in place for some time?
- Ongoing requirements of members
- Financing of the MAG. (See Prepper Budgeting)
- Contract Enforcement: What happens if someone does not fulfill their obligations?
- Member Rights
- Procedures to activate: SHTF, now what?
- Procedures while MAG is active
- Procedures to deactivate MAG post-crisis
- Admission of non-members post-SHTF
- Amendments to MAG Agreements
- Exit clause: Every contract needs to have a termination mechanism, i.e. an exit clause
- Elective by member: What happens if a MAG member is dissatisfied, or simply moves out of the area?
- Removal of member: What happens if a MAG wants to remove a member from the group, whether due to non-performance or some other problem?
Additional clauses
I am sure any of you reading this will think of something I have overlooked. The answer is write it down in the MAG contract or bylaws. Each item that is covered in advance eliminates a potential source of disagreement later.
Why All the Fuss?
A MAG is a long running organization, possibly spanning generations. If the people involved are not family, there are going to be differences that arise, and people will forget the terms of verbal agreements.
Prepping is also an expensive endeavor. There are going to be situations where individuals differ, particularly over finances. Having funding and supply commitments worked out in advance will minimize friction due to some members doing more than others, or someone wishing to leave the MAG and not being able to get money out of the MAG.
A simple example would be four families form a MAG, with each family contributing $25,000, $100,000 total. The money is used to purchase a piece of property that will be used as a common BOL if SHTF. The MAG does not keep a significant amount of cash on hand, but the property increases in value to $200,000. One family finds they must move to the opposite coast for family or career reasons. How do they get their investment out of the MAG? This is now a problem for all concerned, not just the family that needs to move. Alternatively, let’s consider what happens if a member dies. What happens to his share of the property?
For this reason, a non-family MAG needs to be carefully thought out in advance. Written contracts are required to insure everyone has a common understanding of what the agreement is and the written document can be referenced when there are differences in memory or understanding. You also don’t want a MAG to be Hotel California, you can check in, but you can never leave. 😊
People Come and Go
If a MAG lasts any length of time, member’s will leave and new members will join. Turnover occurs even in family based MAGs. One of my adult children moved 1,000 miles away for a job. Why would a MAG made of unrelated people have less movement than a family based MAG? Turnover is normal. If a MAG is going to serve its members, it can’t break down every time a member leaves or a new member joins.
A MAG will also be affected by members having changing interests. What if a member loses interest? Should they leave the MAG? Should they be allowed to drop out of attending functions, but be allowed to remain in the event of SHTF? Should they have the same financial commitment?
After the MAG has been up and running for a while, under what conditions can new members be admitted? What will be the expectations of new members? How will OPSEC be maintained while new members are considered?
All of these contingencies need to be considered and written into the contract or bylaws.
What Happens When SHTF?
We’ve discussed the need for contracts, bylaws, and agreement to form and operate a MAG, but what happens after SHTF occurs? Clearly the demands on MAG members will increase, not to mention their family members. People can’t easily leave. What happens if a member never arrives at the Bug Out Location (BOL)? What happens when a member dies? Can new members be admitted post-SHTF?
What happens if the MAG’s preparations prove inadequate? What is the commitment of MAG members to the MAG at that point? Has this been thought out and included in the contract or bylaws?
Summary
An unrelated MAG has numerous issues to consider, goals, operation before SHTF, operation post-SHTF, as well as members joining or leaving? As many issues as possible should be worked out in advance and included in the Contract or Bylaws. SHTF will be a stressful environment. There will be issues that will have been overlooked under the best of circumstances. Without advance discussion and agreement, the MAG will bog down from the need to discuss too many items that could have been considered and in advance. As a result, if you form such a MAG you want to have all the formal governance and documentation that any equivalent organization in normal times would have, and then some.
The hard part is to figure out who to trust if it’s not family based.
I agree. In fact, if you don’t trust someone, then there is really no point in discussing all of the points that would go into a MAG contract.
Good article. I’ve been working on an outline for my hypothesized non-family MAG for the past several weeks. I’ve heard all the reasons why a non-family MAG would fail, but I also know they do exist which makes me wonder where all the misinformation originates.
If anyone needs any guidance or ideas for this, consider using an existing homeowner association (HOA) as a guide. Most new subdivisions are governed by compulsory HOAs. You can pull copies of their governing documents from county clerk or recorders office web sites.
Excellent idea.
Years ago I lost almost 4 grand of stuff while in a MAG after two of it’s members decided to hook up and the BOL owners wife did a scorched earth campaign against the entire group. Because we worked on the old handshake promise we all lost out in the court since there were no actual contracts or proof of ownership of many of the supplies we kept on location. She and other husband reaped many a dollar from their campaign.
And… in my case we trust non-family members far more than family members due to their past actions towards us and others. So in essence – we’re screwed if SHTF.
I am sorry to hear about your experience, but it does illustrate the need for contracts when money is involved. Contracts not only protect you, they force you to think through the contingencies, and the whole point of a MAG is the contingency of SHTF.
As for family, if you feel you could turn them away during SHTF, then they aren’t a MAG issue. If you do feel you would have to take them in, then that’s your reality. However, I would suggest you aren’t screwed. There is no law that says you must have a MAG. There is no barrier to you building some new trusted relationships.
Thanks, that is reassuring. And boy I wish I had what you had written in this post back then, there’s a few items I never even thought of. I’ve printed out a few copies to keep as reference if I ever join or start a MAG type group. Thank you for the effort/time you put into this piece.
I am glad you found it useful. Feel free to make additions if you get into a real negotiation, but try not to skip anything. You don’t want holes in a contract that could have been avoided.
The best avenue that i found to take is an LLC. This is of course after you have found “people” to group with.
Excellent idea. An LLC is the cheapest and simplest form of incorporation. The Corporation shareholder agreement can cover the points discussed in the post.