Groups working for social change — including unions — fund that activity in different ways. G DeJunz argues that dues are the only democratic form of funding, and the only one that allows members of the organization to retain control of their activity and mission.  This is relevant to different models of funding workplace organizing.

If you’re thinking about joining a social change organization, there are a lot of things you might look at. Does it have a track record of successfully doing important work? Does it have a long-term vision? Does it make decisions democratically? Does it act in a principled way, including on internal matters?

One more question you might not think of: what is the organization’s funding model? It turns out that you can learn a lot about the real mission of an organization, and who it’s accountable to, by looking at where it gets its money.

Find out the source of funding

Where to start? First, find out all the sources of funding. Funding may not be what it appears. For example, many organizations have token membership dues to make members feel a sense of ownership and belonging, but most of the money comes from other sources. Or maybe there are staff that are paid by another organization that nobody talks about. A transparent organization makes available all the information you need to understand the funding model.

Make sure no large income or expenses, especially wages, are left out. Make sure income matches expenses. Any lack of financial transparency is a warning flag.

Take note: what is the largest source of income?

Funders drive the organization’s mission

Now that you know the main funding source, you can make a simplified model of the organization. This model lays out where the money comes from and where it goes, and how both influence the overall direction of the organization.

This is a similar to the method Noam Chomsky used to analyze advertiser-funded media in Manufacturing Consent. If you look at ad-funded TV, even the best shows created by the most well-meaning writers must ultimately answer to the advertisers that make the show possible. You think the show creators are producing entertainment or news and you are the customer that consumes it, but the reality turns that on its head—your attention is the product which is sold to advertisers, the real customer. Entertainment is not the product at all, rather just a raw material used to gather your attention and sell it.

Likewise, any organization acting for social change can be thought of as generating a product. Its actions make the product (measurable results), but what really matters is the customers’ (primary funders) impression of those results. The mission of the organization is to tailor its actions to get the right product (the work it does) to match the needs of the customers (its funders). Despite the best intentions of members or those involved, this might be very different from the stated mission.

Let’s look at a few common funding sources and what they imply.

Foundations and wealthy donors

Many non-profits are funded primarily by wealthy individuals or grants from foundations set up by corporations and wealthy families. Much has been written about organizations funded in this way and how they end up redirecting the mission of the organization. Stand for Children is one extreme example. It started as a grassroots parent organization fighting to get smaller class sizes and repairs for crumbling schools for low-income students. A steep ramp-up of millions of dollars in funding from the Gates Foundation (created by the founder of Microsoft) and the Walton Foundation (created by the family that owns Walmart) led to a shift in mission to pushing corporate education reform and cuts to capital gains taxes for rich people. This is a common problem even when less money is involved. INCITE!’s The Revolution Will Not Be Funded is a great resource, collecting several essays on the problems inherent in the common practice of social justice organizations depending on money from rich people.

But often radical groups think they are cleverer than the funders. Just think of the irony of wealthy capitalists funding revolution! The moment they start relying on the money, to pay for staff or other expenses, even the most democratic process will be redirected by the fear of losing the necessary funding. And it’s a rational fear—the staff’s livelihood depends on it, and ignoring the goals of the funders can result in the destruction of the organization. Foundation funding means you’re a contractor, working in pursuit of the goals of the rich people who sustain the group.

Informal, out of pocket

Many people see that and react by deciding that money corrupts, so it is best to run the organization without money. Work is done by volunteers instead of paid staff, so there is no need for wages. Members can do printing for free at their school or work. Other members have connections for meeting spaces, and members with well-paying jobs can volunteer to pay for things out of pocket without reimbursement. It sounds great and fair—paying for things that could be free is a waste, and for the rest, what can be fairer than “from each according to their ability”?

There’s just one problem. If you don’t have an office job where you can scam copies, and you don’t have connections, and you can’t afford to pay for things out of pocket, what is your role in the organization? What if you propose to get something printed and the people with access to printers are against the idea? Maybe they’re willing to risk getting fired if they agree with the content of the flyer, but otherwise they’re not. How can you outvote that? All of these informal funding situations create a power imbalance—just like the foundation-funded non-profits, even the most democratic decision-making process is redirected to further the goals of the ones footing the bill. The Tyranny of Structurelessness by Jo Freeman does a great job of outlining the problems of invisible hierarchies in informal organizations, primarily focusing on leadership and decision-making, but these same problems arise with informal funding, as well.

“Grassroots” fundraising

Ok, so there’s an issue with asking rich people for money, and there’s an issue with running things “without money.” What about a third option that avoids those problems—grassroots fundraising? Instead of getting money from a few wealthy donors or out of the pockets of wealthier members, how about going to the community and asking for many small contributions? These aren’t rich people and the broader, more numerous contributions ensure they aren’t part of an informal power hierarchy. The organization gets the money it needs, and people get to choose whether to become involved by giving their time and energy or giving a bit of money.

What can the problem be with this? For one, it establishes a divide between two types of people: members, who put in time, make decisions and do the work versus supporters who have much less involvement but donate if they like what they see. This can be a good thing—members are forced to make sure the organization’s work is relevant to keep money flowing.

But with little involvement from the donors, the impression of good work comes from how the organization crafts its message. And donors have little reason to become members—they are already doing their part, and it’s easy. The dynamic creates a small in-group that markets itself to the community. This kind of service organization isn’t necessarily a bad thing, but it’s limited because it’s not a democratic model and it’s not an organizing model. The many donors will never be able to have an equal voice with the active members, and meanwhile, the active members are required to tailor their activities for presentation to an uninvolved base community, thus reshaping their mission. This low level of involvement means donors have little insight into the actual activities, relying on the presentation of success, making the presentation as much a part of the mission as the work itself.

Member dues

What’s left? All of the options so far have had one thing in common–they are all attempts to avoid members being required to fund the organization themselves. So let’s look at that instead.

In a dues-funded organization, paying some amount of money at regular times is a requirement of membership, and this is the primary source of funding for the activity of the organization. Dues are a way of pooling meager resources for greater collective effect. There may be a sliding scale based on income, or special hardship considerations, but everyone is required to pay to be a member to have a vote. Once dues are collected, the money is pooled together, becoming the collective property of all the members to spend as they collectively decide.

Benefits of dues-based funding

Dues-based funding has many benefits over other types of funding, and is, in fact, the most democratic and best aligned with a model of organizing and growth, for a number of reasons:

  • Everyone pays, so everyone has a say
  • It’s members’ money, collectively
  • The organization does not become dependent on, and therefore beholden to, wealthier members—as long as the sliding scale is not extreme and membership rights are equal for all regardless of dues level
  • It’s a stable source of money as long as the organization has members
  • Money is raised by organizing—bringing in new members means more money to fund larger activity
  • Even the poorest member can vote to spend money and can volunteer to take on tasks using the organization’s money
  • Since everyone pays, everyone cares how carefully money is spent – this is a check on waste
  • Funding can’t be cut off by enemies targeting donors

There are a lot of different ways to fund an organization, but only dues democratically rests power on members collectively as equals.

Dues and unions

This is why unions are one of the few types of organization that are still primarily funded by dues—because they exist to further the interests of their members. There are other union-like organizations, such as “worker centers” that advocate for workers but are not dues-funded, and these have many of the shortcomings mentioned above. A growing, organizing union that seeks to organize and further the interests of the entire working class, such as the IWW, must rely on dues in order to stay true to its mission. In the IWW, members also spend those dues themselves, through democratic decision-making, a key component to democracy.

Where the money comes from matters. A social change organization worth joining will have worthy goals and vision and dues-based funding to ensure that its membership collectively drives it there.