Boundaries of Sustainability in Community-Oriented Organizations
Dilemmas for non-profit, non-monetarized and relief organizations
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Membrane of sustainability around a community-oriented
Practical dilemmas in managing the membrane
Towards resolution of these dilemmas: the vital exchange
Transactions supportive of sustainability
Assessing transaction validity
LETS transactions: a possible way forward
This is an effort to reflect on the strategies and policies appropriate
to "non-profit" organizations (including NGOs) in a turbulent socio-economic
environment under a variety of fairly well-known pressures. The assumption
is made that, to some degree, such organizations are -- or could be --
"islands of sustainability". In some cases their appropriateness might
well be of extremely limited duration -- for which "sun set clauses" would
.However it is assumed that there are other circumstances for which
the creation of more enduring initiatives is appropriate. It is questionable
whether quality of life should be tied to an obligation to leave a community
in response to economic pressures. It is the sustainability of these enduring
initiatives under difficult circumstances that is the focus of this reflection.
In a turbulent socio-economic environment -- in which social safety
nets are either non-existent, inadequate, or in process of being eroded
-- these reflections are also considered relevant to community structures
needed to ensure the long-term sustainability of that community. Such structures
may be partially or completely non-monetarized. This would notably apply
in the event of economic or financial collapse in the wider community when
some form of "relief" organization is required. In such a context it is
assumed that short-term policies, maximizing response to immediate needs,
are not necessarily sufficient to ensure such sustainability.
Defining "sustainability" has become a fashionable game for many --
if one cannot do it, then define it? An early business definition of sustainable
development was "sustainable competitive advantage". The sense that sustainability
might necessarily have some kind of enduring quality to it is now also
subject to challenge. Whether it will come to be reframed as equivalent
to "planned obsolescence", or simply "profitability", remains to be seen.
In what follows, the emphasis is placed on not-for-profit organizations
that exhibit a measure of significant continuity in roles designed to enhance
quality of life in the larger community. The challenge of predatory and
parasitical "non-profit" groups, that are also characteristic of a turbulent
environment and "un-civil" society, has been considered elsewhere (https://www.laetusinpraesens.org/docs/bank.php).
Some of the obvious pressures on non-profit organizations include:
Risk of over-dependence on ad hoc funding: Typically this would
be funding received for specific projects (with short-term objectives)
without any guarantee of further funding from the same source or for the
same purpose. Typically also, such project funding may represent a significant
proportion of an organization's budget (even up to 85%). When this becomes
a major source of funding, the organization may then have to commit itself
to some form of long-term fund-raising, whether through soliciting sponsors
or through seeking grants, subsidies or the like. This may become an inappropriate
use of the time of people with project-related skills. The professionalism
required of the fund-raising / project-management approach may alienate
valuable people ethically committed to the organizations objectives and
attract those less committed. Such funds may also be relatively inaccessible
to smaller organizations that are unable to allocate resources to fund-raising.
Core funding for long-term objectives may itself come from sources that
are themselves vulnerable to changes of policy as a result of budget reviews
(or changes of government). Organizations may have to adapt to the questionable
assumption that alternative sources of funding will be found in time to
maintain staff capacity
Dependence on personnel on short-term contracts: The unpredictability
of short-term funding forces an organization into a short-term contract
mode in dealing with personnel resources. A significant proportion of the
personnel is then loyal to the project, for its duration only, rather than
to the organization as a long-term operation providing a context for many
such initiatives. Such personnel turnover may be seen as healthy and contributing
to a wider stimulus to people to be more active in seeking employment.
It may also be seen as preventing the accumulation of less effective people
in the organization. In this sense the organization becomes an island of
effectiveness from which any social problems and inefficiencies are exported
into the wider community. Although there may be no reluctance to set up
short-term projects, whether to meet a particular need or as an action
research process, the challenge of the "exit strategy" is to ensure that
personnel have a route forward at the end of their engagement in the project
and are not set adrift in a sea of unemployment. There is also the concern
that the wider community not suffer from any dependence on the project
once it ceases. Project personnel may actually seek to undermine the parent
body in order to maintain the project and their employment. Short-term
personnel may lead to conflicts of interest and issues of confidentiality
Statutory requirement for re-election of policy-makers: Many
organizations require, as part of their statutes, that the principal policy
positions be occupied for fixed terms -- especially in an effort to respond
to democratic pressures for policy alternation. Mandates may well not be
renewable. Whilst this can be a stimulant to the development and renewal
of the organization, it can also serve to undermine any sense of continuity.
The process can also lead to jealousies and actively destructive behaviours
from past position-holders to present holders of those positions.
Maintaining organizational coherence and continuity: In contrast
to short-term initiatives, continuing community-oriented organizations
sustain a different quality through this sense of continuity and associated
organizational memory. Such institutional memory is a source of creativity
and experience in times of crisis. It provides a context through which
crises can be managed and reduces dependence on a "fire-fighting" policy
style. Continuity of this kind is difficult to maintain when both personnel
and policy-makers have essentially short-term associations with the organization.
Income differentials in comparison with other bodies: Whilst
income differentials are a fact of life and can be justified through a
variety of arguments, they are especially challenging in the case of non-profit
organizations. Typically non-profit organizations are faced with significant
differences in salary scale in comparison with other types of organization,
notably in the case of commercial (particularly multinational) corporations,
academic, and governmental (particularly intergovernmental) organizations.
Such organizations may well have benefit schemes and perks unavailable
to non-profit bodies. This can be a continuing source of dissatisfaction
to personnel who may then be encouraged to treat the non-profit environment
purely as a stepping stone to better opportunities. Moving on to a more
lucrative position requires no justification in a society essentially biased
against sustainable community. The role of "psychic income" in compensating
for salary inequities is poorly understood
Income differentials within non-profit bodies: As with many organizations,
remuneration may well be significantly different according to task performed,
seniority and other factors. Given the differences in salary scale compared
to other kinds of organization, it can be extremely difficult to determine
an appropriate salary for the task that is then perceived as fair by all
parties. This is especially the case where the task performed is entirely
comparable, and possibly more challenging, than an equivalent task in another
style of organization. The dissatisfaction associated with these perceived
differences can be exacerbated by use of personnel under short-term contracts
negotiated in conformity with wider "market" rates. A project leader under
short-term contract may typically earn a much higher salary than a department
header paid through core funding at "normal" rates. Again the role of "psychic
income" is poorly understood, but the professionalization of non-profit
bodies (and the projects funds available) may attract a different kind
of person for whom the ethical considerations are more incidental. The
very process of creating a more equitable salary scale means that different
people are attracted to, or alienated from, the organization.
Problematic social security provisions: The social security provisions
within non-profit organizations are necessarily somewhat different from
those made available to employees of other kinds of organizations. Whilst
this may not be a major issue for short-term employees, it undermines the
ability to attract and retain qualified long-term employees. This is especially
the case in international non-profit bodies which in no way benefit from
the generous social security (and related) privileges accorded to employees
of intergovernmental organizations. Pension schemes, other than those of
the state, may be a major issue -- especially for employees from distant
Dependence on buying in services: Where a non-profit organization
has to make use of services provided by commercial organizations (for example
computer consultants), these must usually be paid at rates applicable to
commercial organizations. Inequities in relation to internal pay-scales
may then become especially obvious. The cost of maintaining high tech services
may well be challenging for non-profit bodies. Where sponsors are available,
the financial pressures may lead to inappropriate sponsorship arrangements
that undermine the credibility of the organization. Sponsorship models
explored by academic organizations may not be readily applied to non-profit
bodies although criticism of such models may be equally relevant to the
case of non-profit bodies.
Exploitation of "voluntary" status by external bodies: In an
environment in which both government and commercial organizations are under
increasing financial pressure (reduction of budgets, downsizing, etc),
use of "voluntary" organizations is increasingly seen as a way of reducing
costs of community services. Thus although a non-profit organization may
propose a fully qualified person for a task, there is a marked tendency
for government bodies requesting a service to cost this work at a significantly
lower rate than if it was offered by a commercial organization using a
person with equivalent (or lesser) qualifications. Clearly non-profit bodies
have a competitive advantage but this is complicated by the salary issues
indicated above. Part of the exploitation lies in the tendency to claim
that the non-profit body can draw upon non-economic resources to ensure
its survival -- notably skilled people who to some degree "volunteer" their
services. In a more fundamental sense it raises the issue as to whether
the non-profits are under-charging or the profit sector is over-charging.
The situation is however evolving in that, with the increasing call upon
non-profit bodies, they are having to develop their infrastructures with
consequent increases to their costs. This can lead to situations in which
they lose any competitive advantage because of economies of scale available
to larger for-profit organizations that are as yet unavailable to a multiplicity
of smaller non-profits.
Exploitation of personnel by non-profit bodies: Given the conditions
under which people work for non-profit organizations on a longer-term basis,
there is necessarily always some degree to which they may be described
as "volunteering" part of their services. Of course use may also be made
of "volunteers". It can be a challenge to reconcile policies regarding
regular and voluntary workers -- especially when they perform equivalent
tasks. It can be difficult to determine at what point the goodwill and
commitment of an employee is being exploited in some way by the non-profit
organization. Personnel may effectively "subsidize" the organization voluntarily,
ore be expected to do so, such as through use of their own computer equipment,
through accepting delays in payment of expenses (because of organizational
cash flow problems), or by not claiming the totality of their expenses
through some form of loyalty. In smaller organizations a lot more may be
asked of staff and volunteers, placing stresses on their allegiance. It
can lead to volunteer burnout, to tensions within families, and ultimately
to disillusionment with the very cause to which they were initially committed.
Exploitation of non-profit bodies by personnel: Some community-oriented
bodies are characterized by having a proportion of personnel who effectively
"exploit" the supportive context offered by a non-profit environment because
they could not obtain or hold a job in another kind of organization. This
may be especially the case with organizations who are dependent on "volunteers".
Such "exploitation" by "passengers" may be acceptable if it is explicit
and part of a form of staff development to assist people to move on to
more appropriate positions elsewhere -- which is generally not the case
in smaller organizations. An organization can then function with a certain
proportion of such "passengers", provided there is a strong group of peers
supporting development -- possibly as part of the stated aims of the body.
Exploitation of non-profit status by vested interests: Where
there are legal or other advantages to non-profit status, this form may
be adopted for public relations and fund-raising purposes by groups solely
motivated by improving their financial advantage. This strategy is skillfully
adopted by commercial cartels and price-fixing rings, closed-shop professional
groups, organized crime rings seeking to launder funds, fronts for dubious
fund-raising initiatives (exploiting the social conscience of the gullible),
fronts for apparently well-meaning sects (with concealed manipulative agendas),
and fronts for political and government interests. All these tendencies
are a challenge to the credibility of a sustainable community-oriented
organization -- especially when its ability to act is undermined by efforts
to constrain abuse by apparently similar "non-profit" bodies. There can
be structural flaws (eg in voting procedures) in non-profit bodies that
render them vulnerable to takeover of the management or decision-making
capacity, notably at statutory meetings. This may be not so much for financial
gain as for status or power in a community.
Value competitiveness: Amongst community-oriented initiatives
there are competitive tendencies to occupy a higher moral ground. Thus
some organizations perceive themselves to be significantly more appropriate
or sustainable than others. Humanitarian and relief organizations are noteworthy
in this respect because of the life and death situations on which they
seek to focus. Those sensitive to spiritual, ecological, health, rights,
democratic, gender or non-violent criteria may also have strongly divisive
views on their respective relevance. Such divisiveness and ethical prioritizing
may severely undermine the credibility of any community-oriented initiative
-- as well as decisions concerning the appropriate allocation of scarce
resources. It may contribute to framing some organizations as more "worthy"
than others in the eyes of those from whom resources might be received.
A sense of occupying the moral high ground may confirm (inappropriately)
any assumption of priority right of access to resources.
Membrane of sustainability around a community-oriented organization
The above points indicate the challenge to ensuring the sustainability
and survival of a non-profit organization. They help to focus on the nature
of the "membrane" that is the boundary between the organization and its
turbulent environment. The principles involved apply -- even more dramatically
-- to situations more typical of emergencies when access to facilities
may well be subject to triage. It is also worth considering them in relation
to the classic "north-south" gap.
How does a non-profit organization survive, especially in relation to
modern pressures? It may have some form of guaranteed income. It may have
considerable competitive advantages in terms of free (or below cost) facilities
and services. It may benefit from extremely dedicated people -- or simply
people who find it convenient to continue to work within that environment.
It may not even need to depend on monetarized resources and transactions
for its survival.
How does the organization preserve this "membrane" as the key to its
sustainability? Clearly the membrane is subject to differential pressures.
The membrane is vulnerable. It can be damaged or ripped away -- "rip off"
then acquires a particular significance. In which case the organization
may rapidly cease to exist. For organizations focused on short-term objectives
this may not be a matter of regret -- and possibly even an expected natural
outcome. In terms of the challenge of developing sustainable community,
this perspective may be short-sighted in the extreme. In a local government
context, for example, the motivation may primarily be to retain power bases
rather than considering instead the sustainability of the community as
How are processes crossing through the membrane "managed"? How is sufficient
continuity maintained to develop expertise in this? How do bodies (with
projects) supportive of sustainability avoid simply becoming dependent
on unsustainable processes to which their objectives are apparently opposed?
Practical dilemmas in managing the membrane
In considering the following cross-membrane processes, the principles
are most dramatically illustrated in relief situations, although they are
most familiar in very mundane situations:
Request for free services by "outsiders": Non-profit bodies are
naturally the focus of requests for free services. Because they have a
non-lucrative objective, there tends to be confusion regarding the manner
in which their resources are managed. This is particularly obvious where
the organization has products or services which it produces or makes available
at some cost for the benefit of the community. How should a request be
handled for a free publication, if that publication is produced at a cost?
How about free food or shelter in an emergency? To whom should it then
be given freely, at a discount, or refused? The decision may be complicated
where there is no cost to the organization to give it away, but a significant
"delivery" cost is incurred if it has to be transported to a distant location.
This may be most obvious in the case of a weighty book whose value has
already been "written off". Even if the organization wants to ensure the
distribution of the book, at what point does it need to say "no" to a legitimate
request, because of the manner in which honouring the request will contribute
to the erosion of the membrane? When should the organization be "mean spirited"?
Request for free services by "insiders": The above dilemma is both
simplified and complexified in the case of "insiders" -- namely members
of the organization, its personnel, or its policy-makers. It is simplified,
because there are fewer of them and they can be seen to have a legitimate
claim on subsidized services -- especially when this is framed as an initiative
to advance the organization's cause or as a way of honouring their support.
It is complexified when "insiders" act as intermediaries for redistributing
the products to "outsiders". When is it appropriate for "insiders" to act
in this way? What constraints are appropriate in managing this process?
How are such decisions to be made? Under what conditions should this be
done by bending any restrictive rules and avoiding any accounting trace?
A mundane example is the use of photocopy facilities. More dramatic examples
are characteristic of relief situations where resources are extremely low
and people are dying -- the question is which people should be "unfairly"
assisted? At what point are such facilities to be considered abused?
Requests for assets: Some organizations develop materials or processes
that they consider to be "assets" vital to their survival. Their long-term
sustainability may depend on how those assets are managed. A conventional
protection may in some cases be to copyright the assets. This approach
may be however be both notional and/or unimplementable as a form of protection
-- as the Internet is dramatizing with respect to information and know-how.
Such defensive procedures may effectively be in direct contradiction with
objectives of the organization -- such as to ensure the dissemination of
some information, as explored above. More challenging is the case where
the asset requested is not so much a product but rather the process through
which that product continues to be produced. This is most clearly seen
in the case of specially adapted computer programs or logical schemes (maps,
thesauri, etc). Pharmaceutical manufacturing know-how might be another
example. Another would be a learning package, especially one which requires
a particular style of mentoring that may be franchised. In an emergency
situation, a "request" for vital cooking equipment by a local warlord might
be another example.
Requests by the organization for unpaid services: Many non-profit
organizations frame their relationship to their members and supporters
such that certain services are expected of them without any form of recompense.
This can take the form of emotional or ethical "blackmail". The organization
may be affronted by any suggestion that such services should be honoured
in monetary terms. In some cases careful attention is given to recognizing
such services through honours, perks, certificates and other devices. These
may not correspond to the recipient's real need.
Part of the difficulty in even discussing these issues is that raising
them effectively questions the nature of the relationship between the parties
involved. Whose motives are being questioned, by whom, when, and why? This
could be seen to be at the core of the question of what is to be meant
by "sustainability" in a community-oriented context. What practices place
the sustainability of an organization at risk? How is a non-profit organization
to acknowledge the network of "favours" and "obligations" which may be
called in to enable it to survive in periods of crisis?
Towards resolution of these dilemmas: the vital exchange
A significant feature that is characteristically absent from the dynamic
through which "free" services are requested is the notion of exchange.
Granted that it is proposed that a transaction be evaluated on a non-monetary
basis, who is getting what in exchange for what? Why should those in need
be confronted with this question when an apparently "unilateral" transaction
Clearly in some settings a non-profit organization has a commitment
to provide at minimum or zero monetary cost. In many such cases no difficulties
may arise. A concrete example might be a soup kitchen in an industrialized
country in winter. If there is an excess of soup, or if the facility is
only provided over the festival season or until there is no soup left,
then there are fewer challenges. The delivering organization has defined
the challenge in a soluble fashion. However, if there is insufficient soup
or helpers, or the need extends beyond the festival season, then other
issues arise. Such situations obviously exist in much more dramatic form
in developing countries or in emergency situations in refugee camps.
One approach is to respond to needs discretely so that the availability
of the assistance does not evoke a multitude of requests that cannot be
satisfied. The ethical dilemma is then reduced to that of responding to
the particular case. Since a single case is unlikely to be threat to the
sustainability of the operation, it can be argued that the need can be
easily met. This case-by-case policy does however raise the issue of the
ethics of discretion under the circumstances. Responding to a single beggar
is the most familiar illustration. Difficulties arise when that transaction
leads to confrontation with a multiplicity of similar requests, as is typically
the case in developing countries. Decisions on giving or withholding then
become a challenge which may be made simple (however arbitrary) or complex.
When does multiplicity become a legitimate excuse for withholding? What
issues should be considered when the receiver is effectively converted
into a regular client -- as is characteristic of a beggar regularly encountered?
Non-profits are often seen as "beggars" by other bodies.
Another approach is the purely sacrificial one whereby resources are
simply disbursed to the limit of the ability of the organization and its
personnel to do so. Beyond this point, following the collapse of the operation,
the continuing challenge can be left in the hands of others, if and when
they emerge. The focus here is on contributing maximally in the moment
for the period during which this is possible. It can appear to be the most
honourable response to the circumstances and the ethical dilemmas involved.
This extreme example can be used to obscure the ethical dilemmas of modest
However, when the need is greater than can be met by an organization
without depleting itself to the point of collapse, policy needs to be influenced
by the degree to which any given exchange across the membrane ensures the
sustainability of the operation.
Transactions supportive of sustainability
How are the transactions or exchanges across the membrane to be understood?
There are many approaches to this.
One approach is to assume that whatever the organization and its personnel
chooses to offer to the wider community it is appropriately rewarded (possibly
"in heaven") by the satisfaction of having done so. This might be relevant
to the charitable initiative of the festival season soup kitchen example.
To support sustainability, when it is threatened by lack of resources
as in a refugee soup kitchen, the organization must evoke non-monetary
transactions from the community. Privileging those who provide assistance
to the operation could then be a sensible policy -- if someone offered
physical help, or provided foodstuffs to add to the soup, for example.
This policy does however call for vigilance because those providing assistance
in the form of foodstuffs may be extracting them from others without the
organization being aware of the abuse that it is provoking. Those from
whom the foodstuffs are extracted may then be amongst those excluded from
access to the soup. A less dramatic example is when an organization is
asked for free (or discounted) information that it then proceeds to sell
on at significant profit or to use to generate such profit in some way.
This erodes any mutual trust so that an inappropriate interaction takes
place it may simply ensure that no further interactions take place.
Sustainability may however be supported by transactions in a manner
which is much more difficult to evaluate. Clearly in a community environment,
the actions of a single organization may have both multiple effects and
chains of consequences that are difficult to comprehend or predict when
decisions have to be taken. As a result an unmatched "gift" transaction
may enable actions that feedback indirectly to sustain the organization
that made the gift. The organization might, at some future date, become
the recipient of unsolicited assistance. Ideally it is on this process
that non-profit organizations would be dependent. The organization is then
placed in the position of being able to give "freely" on the assumption
that unforeseeable consequences will ensure its sustainability. Organizations
are then understood to be sustained in a safety-net that they themselves
help to sustain. Many groups endeavor to operate "on faith" along these
lines. The question is how should those responsible for the membrane attend
to this process? What actions undermine it and call for vigilance?
A key factor for an organization in making such decisions would be some
sense of an acceptable range of responses, rather than hard and fast rules.
To exaggerate, when might it be appropriate to accept a flower in exchange
for some flour -- and when not? What population of "passengers" should
be tolerable? How are such matters of proportion to be handled in the moment?
Assessing transaction validity
There are no easy answers to many of the questions raised above.
A determining factor in engaging in an apparently asymmetric transaction
could well be whether the recipient exhibits awareness of the challenge
of sustainability. Is the request accompanied by the question "how can
However this question also has its challenges. There may be a sense
in which fulfillment of the request effectively completes an earlier transaction
in which the organization was itself the recipient. In this sense recipients
of the organization's largesse may be considered to be "owed" whatever
they receive -- perhaps in compensation for past exploitation. There may
be hidden assumptions about debtors and creditors that would challenge
easy evaluations of abuse.
There is also the possibility that the recipient is already engaged
in a pattern of activity in indirect support of the organization. Any focus
on the legitimacy of a single direct transaction may call into question
the organization's appreciation of that activity.
LETS transactions: a possible way forward
One of the merits of monetarization is the manner in which it clarifies
problems of exchange. The discussion above focuses on de-monetarized situations.
Many communities are now experimenting with LETS systems to handle some
of the transactions identified above. In particular, LETS would require
recognition of the value of the goods or services transacted or quantified
in some alternative system of tokens.
It would be relatively easy for a given organization to develop a system
of tokens or points through which services to it could be acknowledged.
These could then be exchanged for services or products that it provided.
More challenging would be a situation where such tokens were honoured by
several organizations in a community, although this is a typical aim of
many LETS systems. The possibility of adapting LETS to refugee camps is
currently being explored. In some measure this then corresponds to wartime
use of ration coupons -- some of which were tradeable.
A fundamental issue is whether all non-monetary transactions can be
handled through a single LETS-type alternative system of tokens. Just as
some transactions cannot be effectively honoured through monetary systems,
it is possible that two or more alternative systems might be necessary
for different types of transaction contributing to quality of life in a
sustainable community. All such systems would then be understood as complementary.
With the increasing interest in non-monetarized exchanges, government
is becoming concerned at potential loss of tax revenue. Difficulties may
then arise in the use of any tokens. Small businesses making a room available
at zero cost to a non-profit may find themselves subject to tax. Legislation
tends to inhibit non-profit action rather than catalyze it -- at a time
when the role of voluntary organizations in responding to policy inadequacies
is increasingly recognized.
Reflection on these possibilities can be provoked by consideration of
how the following are handled: patterns of obligation (notably within Japanese
culture); mutual assistance (good neighbourliness); friendliness, courtesies
and greetings (shops, queues and waiting rooms); exchange of gifts; rumour
and gossip; exchange of jokes. Simple though they appear, many of these
are fundamental to the experience of quality of life in a community. Although
they have not been "tokenized", these transactions are part of the real
experience of the life of a community. Although some can be "purchased"
with more tangible goods (a glass of beer, "singing for one's supper"),
how others "work" is part of the mystery of community life.
The most fundamental issue is whether putting any system of tokens in
place actually erodes and undermines that pattern of transactions.
The above text has benefitted considerably from comments by Ruth
Anderson (Rural Forum, Scotland).
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