by David Werdiger
In any not-for-profit venture, there are three groups of people involved: leaders, who are founders, managers or board members of the organisation; funders, who pay for it; and stakeholders, who directly or indirectly benefit from what the not-for-profit does or achieves. These three groups usually overlap to a greater or lesser extent, much like the Venn diagram below.
The particular shape of the diagram differs wildly between orgs, and even can vary through the lifetime of an organisation. An organisation in its infancy may be funded by the leaders, and the stakeholder base may be something that grows and evolves. As the organisation grows, the funders may step back and/or hire professional leadership. The stakeholders may form a reference group that works closely with the leaders. In some cases, the funders may be a subset of the stakeholders, and the leaders a subset of the funders.
We could ruminate on the different permutations at length and draw many pretty pictures for different types of organisations. However, this framework is a useful way to look at an organisation with a particular focus on structure and accountability.
The legal structure (which in Australia is commonly an incorporated association) of a not-for-profit either includes stakeholders or specifically excludes them. For example, a not-for-profit dedicated to helping homeless people or people suffering from a particular disease would not necessarily invite all the people they help to become legal members of the organisation, and therefore have a direct say in its leadership and governance. While it does make sense for the stakeholders to have a say, it can be logistically very difficult when the group is large, geographically diverse and not fully known at any time. As a proxy for full membership, a similar result could be achieved with a representative reference group. On the other hand, it would be appropriate for a synagogue or a school to grant all attendees the legal status of members. In that case, there is a limited and known number of members, and it often this group overlap significantly with the ‘funders’ group.
Allowing stakeholders a greater say is a double-edged sword. The democratic process can facilitate a significant shift in the mission of the organisation as envisaged by its founders. What protects the organisation is usually its constitution, which articulates not only its purpose, but also the conditions under which said purpose can be changed. Nevertheless, some organisations where inclusive membership is appropriate choose not to follow this path, and prefer the power and control of a small and self-perpetuating group. As a prospective funder, it’s worth finding out the structure and membership of an organisation and the reasons a particular structure has been chosen.
This week’s Torah reading – the section of Pekudei – is the conclusion of the mishkan/tabernacle construction project undertaken by the Jews in the desert following their departure from Egypt. It is any not-for-profit’s dream: an appeal that was stopped because it exceeded its target, and where the underwriters (the princes of each tribe) were embarrassed that no contribution was required of them.
The description of the design of the mishkan goes on in detail for two portions of the Torah, and then another two are spent repeating them as the work was actually completed. The final section called ‘Pekudei’ or ‘accounting’ is effectively the auditor’s report: Moshe gives the Jews a full accounting of how the appeal proceeds were deployed.
Through the lens our framework: the leader is Moshe, operating with the direct authority of God Himself, the funders are the entire Jewish people, and they are also the stakeholders. As funders, the Jews gave both a fixed amount (the half-shekel), and a variable amount based on what they could afford. The fixed amount could be viewed as membership dues, as they went initially for the foundation sockets of the mishkan, and in future years for the regular daily ‘tamid’ sacrifices brought on behalf of the entire community.
Did anyone suspect Moshe – the greatest leader of and advocate for the Jewish people and one who spoke directly with God – of misappropriation? Rather, God dedicated and named a section of the Torah about accountability as a prototype for future not-for-profits. The message is very clear: no matter what the authority of your leadership, if you seek money from people, you must be accountable to them. And if you do something for the benefit of a group of people, it is reasonable to ask for a token donation so that they can be formally recognized as ‘members’. If these standards are good enough for Moshe, they should be good enough for the rest of us!
David Werdiger is a director of Australian Jewish Funders, a past director and current committee member of JewishCare, a technology entrepreneur, and a writer and public speaker. You can connect with David on LinkedIn, Facebook, Twitter, or Google+.