Bread Funds, or “Broodfonds” as they are known in The Netherlands where they originated, are gaining popularity with the self-employed as a pioneering model of self-organizing, peer-to-peer (P2P) insurance. BreadFunds offer an alternative to private income protection insurances that are unaffordable for some and have many exclusions, such as no coverage for pre-existing conditions.
**They work like this:** A group of typically 20-50 self-employed people create a fund, make monthly payments into it, and then the fund provides basic monthly income for those too ill or injured to work. Exclusions for entering a fund do exist, but are less stringent than insurance protection:
- Members have to be fit to work when they join the fund.
- Members must make an average of at least €750 (~$836) net profit per month.
- A person can only become a member of a fund if they are nominated by an existing member, and fund membership is limited to 50 people in order to maintain trust and to simplify decision-making.
All registered funds fall under the supervision of De Broodfond Makers, an umbrella organization that provides services to Bread Funds.1a