Do Nonprofits Need Bosses?

By LUCAS MCGRANAHAN for Democracy at Work

Excerpt: The question is how far democracy can be embedded into a nonprofit organization. This question is now being taken up by Oakland’s Sustainable Economies Law Center, a self-described ‘worker self-directed nonprofit.’ Because the Law Center supports worker cooperatives, housing cooperatives, community renewable energy cooperatives, and other forms of economic democracy, they consider it important to practice workplace democracy themselves. In the words of staff member Chris Tittle, “distributing leadership throughout our organization has undoubtedly led to us to be more creative in our work, more inclusive in our perspectives, and more accountable to each other, our communities, and our partners.”

Under the Law Center’s Holacracy-based model, workers are not identified with their roles or job titles. Any given worker will occupy any number of roles, and those responsibilities will change over time based on need and preference. This system resists role-based hierarchy and pay differentials while promoting continual learning (“upskilling”) and rotating responsibility for less desirable tasks. In addition, the Law Center’s meetings are highly structured so as to include input from all participants and avoid dominant personalities from taking up too much space. Among the Law Center’s policies are equal pay for all staff (indexed to a living wage) and a 30-hour workweek. Whether you think such policies sound amazing or impracticable, the key is that they exist because the workers themselves have agreed upon them. If something does not work, the issue can be addressed democratically.

The democratic organization of nonprofits is both possible and, in many cases, more desirable for workers. So why is it so uncommon? One barrier to worker self-direction in nonprofits is a legal one: unlike a worker cooperative – where the board of directors may be identical to the staff or an elected subset thereof – a nonprofit board may face legal restrictions regarding the number of directors who are paid staff. Often, only certain kinds of power can be delegated, and then only on a provisional basis (probably best accomplished by renewable board resolutions.) This is a legal gray area where neither statutes nor case law yield a totally clear picture of what is allowed. What is clear is that nonprofits are currently closer to capitalist firms than they are to worker cooperatives in their ability to guarantee democratic governance. In both cases, the board has the power to scrap democratic practices if it sees fit.

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