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(HBR) "How Financial Accounting Screws up HR"

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(HBR) "How Financial Accounting Screws up HR"

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Idea in Brief

The Problem

Many HR practices in the United States are bad for companies, employees, and investors. They include the lack of investment in training, the increasing reliance on leased workers, and the shift from pensions to 401(k) retirement plans.

The Root Cause

U.S. financial reporting standards treat employees and investments in them as expenses or liabilities, which makes companies appear less valuable to investors.

The Solution

Institute some small additions to what companies report, including expenditures on labor other than employees and on training; the employee turnover rate; and the percentage of vacancies filled from within. Businesses should voluntarily do this, and investors should continue to pressure the Securities and Exchange Commission for reforms.

Many common practices for managing employees are hard to explain. Why do companies obsess over cost per hire but spend so little time trying to see if they make good hires? Why do they provide so little training when we know it improves performance and many candidates say they'd take a pay cut to get it? Why do firms delay filling vacancies and let work go undone? Why do they spend so much money leasing personnel from vendors rather than hiring their own?

One answer to those questions is the peculiar way that financial accounting in the United States treats employment costs (which differs from the way that international standards treat them). Despite all the rhetoric about "investing in our people," training and development aren't considered investments; they're categorized as a current expense, a type of fixed cost-just as carpeting is. So are other employment costs such as wages and salaries for all administrative work. Given that U.S. companies enjoy considerable freedom to lay off workers, treating such expenditures as fixed costs that can't be reduced during economic downturns makes little sense. Along with other rules, it helps explain why more and more firms are shifting work to nonemployees, a trend that begins in cost accounting. By transferring work away from employees, companies get rid of fixed costs and move employment costs into another accounting category. In short, the financial accounting system distorts business decisions in ways that are worse for everyone-investors, employers, and employees.

Financial accounting, much more than the tax code, causes employers to make choices about work and employees that are at odds with effectiveness and efficiency. As I will explain in this article, you can see the negative consequences in practice after practice. If you add them all up, their impact is massive. The remedy is to make some simple, modest additions to reporting requirements, which I will describe. Despite being small, these changes would have a large positive effect on employees and business outcomes. But first, let's examine in depth the distortions that the financial accounting system produces.

Employees Aren't Treated as Assets

In the United States public companies are required to report their financials using standards based on generally accepted accounting principles (GAAP) established by the Financial Accounting Standards Board. Those accounting rules say that items with value are assets-but only if they're owned by the company. On that basis, employees are not considered assets-even though the tenure of a valuable employee is often far longer than the life of any piece of capital equipment. Even when a company buys other businesses to get access to their skilled employees, the acquisition of talent cannot be treated as an investment.

Meanwhile, GAAP rules allow a firm to count purchased software or equipment as an asset that can offset liabilities. They also permit a firm to depreciate the value of that purchase over its useful life. Depreciation forces managers to remember that assets wear out and that they have to budget for their replacement.

But what happens with acquisitions of employees? Suppose a company pays a lot of money-for signing bonuses and so forth-to bring in a team of hot computer scientists who are central to its new strategy. Those costs are current expenses that have to be completely deducted from taxable income the year they're hired, even though the business's managers don't expect to start getting value from them for at least another year or so. That may cause the firm to take a big hit to its income that year, and if it doesn't have enough to cover the expense, the overall operation will appear to be losing money, a huge red flag for investors. This is the case even if employees are essentially locked in with deferred payments, noncompete agreements, and other contracts.

A company also cannot claim to have made an "investment" in current employees on its books, because the accounting rules say it can't invest in something it doesn't own. Consider a firm that decides to send an employee to an expensive computer-programming course. It makes that investment because it believes the employee will be valuable for some time thereafter. But the financial accounting rules stipulate that the cost of such training is an expense that needs to be completely offset by income earned that year. This stipulation helps explain the continual decline in employee training and development, which in turn is one reason U.S. companies now fill almost 70% of their vacancies with outside hires. And the fact that companies cannot depreciate investments in human capital the way they can physical assets creates an additional problem: They have no equivalent way to plan and budget for the replacement of critical talent.

Another way financial accounting rules screw up training and employee development is by aggregating outlays on them with other costs in the very broad "general and administrative" category. Are you spending a lot on training employees-or on carpet? An interested investor will not know and can't find out.

Some may argue that it's sensible not to treat employment expenses as investments, because employees can walk away. But that reasoning overlooks the restrictive covenants companies have been piling on employees-the noncompete agreements, vesting periods on stock options, and even requirements that they refund employers for their training and education should they leave the organization. The irony is that, unlike capital assets that steadily and predictably erode, employees actually become more valuable over time simply through "learning by doing," which costs nothing.

Benefits Are Seen as Liabilities

Many employee benefits-including vacation time, sick leave, and health care coverage-are accrued or earned by the workers and owed to them in the future. Under GAAP, those benefits show up on the liability side of the balance sheet as obligations that must be offset by current assets. From an accounting perspective they're an even bigger burden than simple expenses are.

The enormous move away from pensions, or defined-benefit plans, to defined-contribution plans, such as 401(k)s, was in all likelihood largely driven by this financial quirk. Pensions are future obligations and are a guarantee to employees. The standard view in economics was that it was valuable for employees to have that guarantee and much easier for a large company than for an individual employee to manage any investment risk. In fact, a series of studies show that, on a per dollar basis, pensions, which had strong investment returns before the pandemic, would have been cheaper for employers in recent years than the equivalent defined-contribution plans.

But pensions are also treated as liabilities, and sometimes are the biggest ones companies have. Need to improve the appearance of your financial position quickly? Drop pensions and move to defined-contribution retirement plans. A big liability goes away, and the company instantly becomes more valuable.

The new "unlimited vacation" craze in Silicon Valley and among start-ups has a similar origin. In most organizations employees accrue or earn vacation days in line with their service, and the company owes that paid time off to them, which is a liability on the company books. By moving from an explicit commitment to a vague promise of unlimited time off, the firm removes the liability and immediately looks more valuable. This also helps explain why a growing number of companies are granting employees unlimited sick leave; that too helps them avoid an accrued liability.

GAAP Rules Are Fueling a Shift to Nonemployees

Arguably, a number of rules have been prompting a major effort by companies to move work to nonemployees. One involves treating wages and salaries as fixed costs. Such costs are a big worry for investors because if business and revenue decline and those costs can't be cut, the profitability and value of the business collapse in a hurry.

Why wages and salaries are ever considered fixed costs in the United States is a puzzle given that virtually all employment there is "at will," which allows companies to end it unilaterally for any business-related reason. Employers don't seem to have much difficulty laying off people if it improves financial performance and indeed seem to be cheered along by investors when they do so.

In addition, GAAP rules require companies to report their number of employees but not their total number of workers. Because several key performance measures are generated on a per employee basis-revenue and profit per employee being the most popular-a company that has moved jobs to nonemployees, reducing its head count, instantly looks more successful.

A final reason that companies have been increasingly using nonemployees has to do with the costs that go into producing whatever is sold-the cost of goods sold. These are called "above the line" costs, and they have a huge effect on perhaps the most important measure of profitability: gross profit margins. Other costs-those that are "below the line"-do not. A company that can move costs from above the line to below it will improve its gross profit margins. Work done under contract by nonemployees that is below the line also looks more like a nonrecurring expense-which is a variable cost, not a fixed cost-than employment does. And a company that pays for leased employee contracts in advance can even include some of that cost in the assets on its balance sheet.

The most common way large organizations shift work to nonemployees is not with independent contractors, known as gig workers, because businesses need stability and predictability in most of their activities. It's with the regular employees of vendors who work for clients at the clients' locations-"leased employees" who do the jobs that employees routinely would do. Direct numbers on the size of this workforce are hard to obtain, but some surveys indicate as much as 30% of the total amount spent on workers by corporations goes to nonemployees, and much of that goes to leased employees.

This helps explain why corporate budgets for leased workers are so large. My colleague Matthew Bidwell's study of one company's decisions about whether to have vendors or the company's own employees perform IT work found that managers had quotas for the amount of work that had to be awarded to vendors in given projects. That decision was not driven by local business needs. Remarkably, managers were allowed more slack in achieving cost targets when they used vendors than when they used employees. As one manager noted, the buckets for costs were not the same, and the process and the bureaucracy involved in getting approval for a vendor were far less onerous than those for bringing on an employee.

Another fairly common corporate practice is outsourcing administrative tasks related to employment, like hiring, to avoid needing in-house staff to handle them. The size of the industry that provides outsourced HR services is now well over $500 billion. Some companies are also reducing internal HR payrolls by replacing people with software. HR executives often say that it's much easier to get money for an IT solution than it is to get the equivalent amount of money for personnel. But there are also questions about whether HR software really is as good as the professionals it replaces. A 2020 PwC survey found that C-suite executives, who tend to focus on priorities dictated by financial accounting, were 270% more likely to believe HR technology cuts costs than the line managers who actually used the software were.

There's strong evidence that these approaches have serious downsides. Research, including my own, has found that using temporary and leased employees hurts productivity and that such workers are less knowledgeable and less committed than regular employees are, make more demands on management, create coordination challenges with regular employees, and irritate regular employees, who worry about their own status and jobs and become less engaged. The fact that corporations need to create their own "vendor management" departments just to handle all those outsourcing contracts also suggests that dealing with vendors is neither simple nor cheap.

The rationale for contracting someone else's employees is not increased efficiency; it is exploiting GAAP rules to make your company appear more valuable to investors.

It's Hard to Get Approval for Employment

The squeeze is on to further cut the remaining jobs done by employees. In addition to setting dollar budgets for business units, many companies now set head count limits too. Operating managers often have part of their bonuses tied to their success in keeping their unit's head count below the ceiling.

It's easy to see how all this causes companies to be penny-wise and pound-foolish. One of the clearest examples is the brick-and-mortar retail industry, which historically has viewed labor as expendable and cut staffing and training budgets as it struggled to compete against online rivals. Research conducted by Marshall Fisher and his colleagues at the Wharton School, however, found that this run-lean strategy often backfires because having more and better-trained personnel would boost sales and operating profits at many stores. (See " Retailers Are Squandering Their Most Potent Weapons," HBR, January-February 2019.)

Another example is the airline industry. During the pandemic, the government gave airlines substantial subsidies to keep employees on their payrolls. Yet in 2021 airline leaders told Wall Street analysts that they were intentionally bringing back fewer workers than they'd had before the pandemic so that they could run even leaner, according to Peter Coy of the New York Times. The result was a staffing shortage during the holiday season, when demand for travel predictably surged. Flights had to be canceled, and the airlines lost business. Economywide, the difficulty that so many companies have had with unfilled jobs since the spring of 2021, when Covid restrictions began to lift, can be traced at least in part to delays in hiring. A lack of personnel has caused those companies to lose business too. This isn't surprising, given that evidence shows that companies that cut sooner and deeper in downturns struggle to get going when business returns and, as result, perform worse financially than their peers do. The productivity lag that the United States experienced during the 2010s has been attributed to the fact that employers cut their staffs too hard and too deep during the Great Recession, hampering their ability to rebound with the economy.

This misguided focus on minimizing head count is another reason HR staffs have been slashed. The ratio of HR staff to employees has fallen from one to 100 in 1980 to one to 150 now. The idea of eliminating employees like recruiters, who might be paid $75,000 a year, and adding their tasks to the plate of line managers, who are probably paid at least twice that, flies in the face of most cost-minimization strategies.

What Can Be Done?

The current treatment of human capital in financial accounting has no real defenders. Investor groups, believing that it leads to a lack of information that makes it more difficult for them to estimate the true value of companies, have led the drive for change. They have pushed companies, including those they hold significant ownership stakes in, to report more HR data-but so far with little success. It's not that businesses like the current practice, but they have a knee-jerk reaction against any additional reporting, largely because it increases the amount of work they have to do.

In 2020 the U.S. Securities and Exchange Commission, which oversees financial accounting in the United States and empowers the Financial Accounting Standards Board, responded to investor groups' complaints by requiring that companies report on aspects of human capital that are material to understanding their businesses. But instead of stipulating what information companies had to report, the SEC gave each the power to decide what to disclose. The results so far have been discouraging: Seventy percent of companies reported hardly any metrics and seemed mainly to express platitudes about their commitments to diversity and inclusion or other socially desirable outcomes. Giving that much discretion to companies defeats a central purpose of accounting: to present information in standard ways to allow comparisons.

What should be done? Businesses have every incentive to report more information about their spending on training and other things that almost everyone but financial accountants would call investments. If investors could see that a lot of "administrative expenses" were actually being used to improve employees' ability to do their jobs, companies would look more valuable to them. The knock-on effect would push companies away from the imprudent and counterproductive practices the current accounting approach encourages.

Companies that see human capital as a source of competitive advantage could also require their vendors to report on measures that indicate bad practices, such as turnover costs, and good ones, such as training investments. That information helps customers assess what vendors can actually do: Is the promise of reliability from a vendor credible if half its employees quit every year?

For its part, the investment community needs to keep pressuring the SEC for change. It can point out that the new reporting requirements have had little effect and that there is an alternative model: the International Financial Reporting Standards (IFRS) used by companies outside the United States. Under those global accounting practices, companies can report more of the asset value of human capital. Arguably the best examples have been in valuing football (soccer) teams, whose assets are virtually all in players. IFRS practices allow their human assets to be amortized and the teams to be revalued when players are traded, released, and so forth.

What ultimately should we want the SEC to make companies report? A few simple measures would go a long way. The first is simply to break out cost categories that are already reported:

How much are companies spending on workers other than their own employees? We have no sense of how efficient operations are when labor costs such as leased workers are hidden.

How much is spent on training and other development efforts?

What is the employee turnover rate, which measures the human capital going out the door? How much of that is due to quitting? That information, along with the total number of employees, which companies already report, will allow us to estimate the number of dismissals-a true sign of management problems.

What percentage of vacancies are filled from within? That reveals the extent to which a company is growing its own talent or having to buy it from outside. This data is already collected by many companies' applicant-tracking software (as is turnover data).

. . .

Financial accounting is the scorecard that tells companies how well they're doing. The fact that it provides such a misleading view of human capital is a huge problem. While investor concerns about not being able to value companies accurately have gotten some attention, it's a much smaller problem than the systematic distortions that hurt operating efficiency and have largely gone unnoticed. Not all the problems of the financial accounting for human capital can be addressed by the simple changes described here, but it's hard to think of many other important issues where small changes could make as much difference.

A version of this article appeared in the January-February 2023 issue of Harvard Business Review.

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Many HR practices in the United States are bad for companies, employees, and shareholders. Firms skimp on training and development, for instance, and tightly limit head count even when they're understaffed. They increasingly move work to nonemployees, like leased workers, and replace pensions with more-expensive 401(k) plans.

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(WEF Presentation) "Human Capital as an Asset: An Accounting Framework to Reset the Value of Talent in the New World of Work"

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(WEF Presentation) "Human Capital as an Asset: An Accounting Framework to Reset the Value of Talent in the New World of Work"

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(EA Journals Research) "Conventional Human Asset Accounting Treatment and Corporate Profitability Evaluation"

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(EA Journals Research) "Conventional Human Asset Accounting Treatment and Corporate Profitability Evaluation"

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(JETIR Research) "Human Asset Accounting: 'Adoption and Abandonment in Public Sector in India with Specific Reference to ONGC'"

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(JETIR Research) "Human Asset Accounting: 'Adoption and Abandonment in Public Sector in India with Specific Reference to ONGC'"

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(Loyola Research) "Human Asset Accounting and Measurement: Moving Forward"

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(Loyola Research) "Human Asset Accounting and Measurement: Moving Forward"

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Human Asset Accounting and Measurement_ Moving Forward

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(New Economy Coalition) The Solidary Economy Overview

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(New Economy Coalition) The Solidary Economy Overview

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Overview

What is the Solidarity Economy?

The solidarity economy is a global movement to build a just and sustainable economy where we prioritize people and the planet over endless profit and growth. Growing out of social movements in Latin America and the Global South, the solidarity economy provides real alternatives to capitalism, where communities govern themselves through participatory democracy, cooperative and public ownership, and a culture of solidarity and respect for the earth.

In our vision, regional solidarity economy ecosystems are essential building blocks for global economic transformation. A solidarity economy ecosystem is an environment where all of the things a community needs are controlled and governed by everyday people: like housing, schools, farms and food production, local governance structures, art and culture, healthcare and healing, and transportation. The members in our network are primarily building community control in the following areas:

This capitalist economy was built on stolen land with stolen lives and labor. Without reparations for America's original sin, there can be no justice. As we work to build community control and restore our relationship to land and agriculture, it's critical we follow the leadership of Indigenous and Black communities to advance land return and food sovereignty.

Models we love: Community Land Trusts, Community Gardens, Food and Farm Co-ops, Community Fridges, Regenerative Agriculture, Agroecology, Food Sovereignty

Instead of serving to concentrate profits into the hands of executives and investors, we need systems of labor and production that are democratically run and build wealth among those who build a business' value - the workers. Worker ownership of businesses, along with non-monetary forms of production and exchange can decommodify labor and repurpose it to meet local need.

Models we love: Worker Cooperatives, Time Banking, Barter Systems & Non-Monetary Exchange, Platform Cooperatives

Transforming our financial systems is key to transforming our economy. In our current economy, finance is based on extracting value from land and people in order to concentrate wealth in the hands of the few - fueling economic, political and ecological crises globally. By divesting from private banks and Wall Street and reinvesting in public banking and community-controlled capital, we can create a financial system that fuels a regenerative economy and meets the needs of communities and the planet.

Models we love: Participatory Budgeting, Credit unions, Public Banking, Local currencies, Non-extractive lending, CDFIs, Postal banking

Why should essential services like water, internet, and electricity be in the hands of a small number of unaccountable bureaucrats and private companies? City governments and cooperatives can provide these services in the interests of people instead of profit - providing more affordable, accessible services while building energy democracy.

Models we love: Rural Electric Co-ops, Community Solar, Community Broadband, (Re)municipalization and Public Ownership,

Creators shift the culture! We envision a world where culture workers are valued and paid justly for their labor, and where the media and technology works in service of the people - not tech giants and corporations.

Models we love: Platform cooperatives, Worker-owned media, Solutions Journalism, Open Source, Copyleft, Artists Co-ops

HOW TO DO IT

Our Action PLan

To achieve our long-term vision of building self-sustaining, interconnected solidarity economies, we ground our work in four strategies:

Contest for Power

Control the Capital

Tell the Story of Our Freedom

Train the People

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The Solidarity Economy - New Economy Coalition

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Overview The solidarity economy is a global movement to build a just and sustainable economy where we prioritize people and the planet over endless profit and growth. Growing out of social movements in Latin America and the Global South, the solidarity economy provides real alternatives to capitalism, where communities govern themselves through participatory democracy, cooperative and public ownership, and a culture of solidarity and respect for the earth.

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(Book) The Revolution Will Not Be Funded

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(Book) The Revolution Will Not Be Funded

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Duke University Press - The Revolution Will Not Be Funded

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Beyond the Non-Profit Industrial Complex

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(Book) The Revolution Will Not Be Funded

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(Book) The Revolution Will Not Be Funded

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Duke University Press - The Revolution Will Not Be Funded

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Beyond the Non-Profit Industrial Complex

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Anticapitalism for Artists is a community dedicated to raising the class consciousness of artists.

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Comprehensive information on state-of-the-art strategies for democratic, community-based economic development, including community development corporations, employee-owned firms, land trusts, non-profit organizations, co-ops, universities, and more.

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Participatory budgeting (PB) is a democratic process in which community members decide how to spend part of a public budget. It gives people real power over

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Decolonizing Wealth, Second Edition by Edgar Villanueva: 9781523091416 | PenguinRandomHouse.com: Books

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This second edition expands the provocative analysis of the racist colonial dynamics at play in philanthropy and finance into other sectors and offers practical advice on how anyone can be a healer. The...

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(FiftyByFifty) "Ownership Design for a Sustainable Economy"

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(FiftyByFifty) "Ownership Design for a Sustainable Economy"

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karenkahn33@outlook.com · ·

Research finds mission-driven employee-owned firms best environmental stewards

by Sarah Stranahan and Marjorie Kelly

What is the relationship between employee ownership and sustainable business practices? Our research, conducted with support from Partners for a New Economy, suggests the answer to this question is far from simple. While traditional public ownership almost certainly will put profits before planet, employee ownership doesn't guarantee a firm will prioritize environmental impact.

Rather, we found the business design that is most suitable to solving our planetary crisis combines employee ownership with moral leadership that values sustainability. Most often that moral leadership comes from founders and/or the executives who strive to make the company's values a reality. Where employee ownership makes a real difference is when mission-driven companies transition to new leadership. Employee owners, steeped in company culture, are the ones most likely to continue to steward that mission.

"Ownership design for a sustainable economy" is our final report, summarizing the research methodology and findings related to our inquiry into this question. Using both quantitative and qualitative methods, we uncovered 50-plus employee-owned, mission-driven firms that provide a model for business in the 21 st century. These businesses demonstrate design lessons that will need to be adopted far more broadly if we are to solve the two greatest threats to our planet and our democracy: growing inequality and the climate crisis.

Ownership-design-for-sustainable-economy-FINAL-CX

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Ownership design for a sustainable economy - Fifty by Fifty

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karenkahn33@outlook.com · · by Sarah Stranahan and Marjorie Kelly What is the relationship between employee ownership and sustainable business practices? Our research, conducted with support from Partners for a New Economy, suggests the answer to this question is far from simple.

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Board, Budgets, and Strategic Planning Templates from FORGENYC

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Board, Budgets, and Strategic Planning Templates from FORGENYC

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(Justice & Ecology Project) "From Banks and Tanks to Cooperation and Caring: a Strategic Framework for a Just Transition"

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(Justice & Ecology Project) "From Banks and Tanks to Cooperation and Caring: a Strategic Framework for a Just Transition"

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Dr. Amy K. Glasmeier 02/01/2023

<b>Checked for accuracy on 1/27/2023; Numerical values are consistent with living wage 2022 estimates published on 2/01/2023.</b>

While the minimum wage sets an earnings threshold under which our society is unwilling to let families slip, it fa...

Dr. Amy K. Glasmeier 11/22/2022

JUST Capital's approach is unique. The organization leverages the power of the private sector to tackle the root causes of many of today's challenges, highlighting the role of business as a force for the greater good. Their recent impact includes...

Carolyn Hohl and Dr. Amy K. Glasmeier 11/16/2022

The monthly child poverty rate skyrocketed from 12.1 percent in December 2021 to 17 percent in January 2022. (Columbia University Poverty Center, 2022). The cause of this was the end of many pandemic-era policies, including the Child Tax Credit (C...

Dr. Amy K. Glasmeier 05/20/2022

The 2022 date update of the Living Wage Calculator is now online.

In all previous years, we posted data in the first quarter. This year we reprogrammed the tool to make it more efficient. This took longer than expected; reprogrammings inevitab...

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Dr. Amy K. Glasmeier 02/01/2023 Checked for accuracy on 1/27/2023; Numerical values are consistent with living wage 2022 estimates published on 2/01/2023. While the minimum wage sets an earnings threshold under which our society is unwilling to let families slip, it fa... Dr. Amy K. Glasmeier 11/22/2022 JUST Capital's approach is unique.

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(Sustainable Economies Law Center) "Bylaws Toolkit for Worker Self Directed Nonprofits"

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(Sustainable Economies Law Center) "Bylaws Toolkit for Worker Self Directed Nonprofits"

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New Application Deadline: April 1, 2022

Collaborate to Co-Liberate: Structures and Practices for Democratic Organizations

Over the course of 12 month-long modules, we will examine some of the stickiest and most challenging questions facing social movement organizations striving to build organizational structures that exemplify their values of a more inclusive, democratic, embodied, and life-giving world. The modules all together present a journey along the iterative, dynamic, and spiraling path through organizational transformation.

This journey will be divided into four seasons. Within each season we will explore a core facet of organizational change from multiple perspectives and orientations.

To begin, we will invite participants into an exploration of movement lineages, and consider themes including mutuality, reciprocity, Black queer feminism, and decolonization/anti-colonialism. Throughout every module, we will weave this foundational attention to power, race, gender, class, and structural oppression.

Once grounded in these movement lineages and frameworks, our first season centers the core foundation of this work: building strong and resilient relationships. In this season we will explore personal and interpersonal tools for building an inclusive, effective, and empowered team.

Our second season draws upon these core relational capacities, using them to navigate and build critical skills for transformation within some key organizational basics: decision making, distributing work, and creating a culture of accountability.

With these solid interpersonal and organizational foundations, our third season offers frameworks for maintaining these democratic and liberatory structures even while navigating the pressures of capitalism and the corporate worlds outside your organization.

Finally, our fourth and last season helps to situate this powerful organizational change within your web of relationships.

A Roadmap for the Journey

In brief, Collaborate to Co-Liberate will be divided into four seasons, with each season centering a core set of skills, themes, and strategies that are key to organizational transformation. Season descriptions and modules are listed below for ease and clarity.
Season One: Relationships at the Center: Grounding in shared values, facilitating collaboration, and engaging with conflict
Module One (May): Why This Matters / Lessons from our Ancestors
Module Two (June): People-Centered Facilitation
Module Three (July): Conflict Transformation
Season Two: Organizational Fundamentals: Leadership Growth, Decision making, and Distributing work
Module Four (September): Leadership Growth and Development
Module Five (October): Decision Making
Module Six (November): Distributing Work Democratically
Season Three: Navigating Capitalism: Aligning Boards and Bylaws, Participatory Budgeting and Finance, Compensation
Module Seven (January): Aligning Boards and By-Laws
Module Eight (February): Participatory Budgeting and Liberatory Finance
Module Nine (March): Compensation
Season Four: Connecting to Your Web of Relationships
Module Ten (May): Accountability
Module Eleven (June): Strategic Planning and Visioning
Module Twelve (July): Holding Change

How Collaborate to Co-Liberate Works

Collaborate to Co-Liberate: Structures and Practices of Democratic Organizations consists of twelve interrelated modules. Each module has two core components per month, with optional additional opportunities for engagement. Participants will be divided into learning cohorts, based on organizational structures (size, age of organization, stage of development/transformation) and/or identities/roles (BIPOC, leadership teams/executive directors, etc.).

Each module will launch with a 2 hour webinar/teach-in about the core topic, facilitated by organizational leaders and experts in the field.

This webinar will be followed by a cohort-based deep dive dialogue. This 1.5 hour facilitated community dialogue that will explore a deeper dimension of the module's theme, with particular attention to examining the practices through anti-oppression lenses.

Throughout the journey, our team will support individuals and organizations to host "Barn Raisings", or community-led peer coaching sessions. Nonprofit Democracy Network Stewards will invite community experts and organizational leaders with relevant experience to join these collective coaching opportunities, and all participants will be invited to participate, learn, and offer wisdom and insight in these gatherings.

Finally, a few times throughout the journey, we will host panel discussions with organizations in various stages of democratic transformation to share insights, best practices, and hurdles from their journey of organizational change.

Who is facilitating this journey?

Collaborate to Co-Liberate will be stewarded by a group of Nonprofit Democracy Network "Sensemakers" - consultants and NPDN members with a depth of experience in implementing organizational change. Sensemakers will guide our cohorts through the yearlong journey, holding space in deep dive dialogues, supporting Barn Raisings, and offering resources and referrals for deeper engagement.

Collaborate to Co-Liberate webinars will be facilitated by an amazing crew of guest facilitators, experts in their fields of collective governance and organizational transformation.

Core facilitators include Patricia St Onge, Hope Ghazala, Mala Nagarajan, Tamila Gresham, Ana Martina, Shilpa Jain, Simon Mont, Ananda Valenzuela, Richael Faithful, Gopal Dayaneni, and Chris Tittle, among other special guests.

Additional Benefits

In addition to the rich learning journey, enrollment in Collaborate to Co-Liberate will include a few additional benefits:

Automatic membership to our Community of Practice online

Over the course of the year, the Sustainable Economies Law Center will host several Legal Cafes specifically for Collaborate to Co-Liberate participants, where you can get expert advice from movement lawyers about any sticky legal questions you have in your process.

What does the learning journey cost?

We want participation in this learning journey to be as accessible and community-driven as possible. We also want to justly compensate our facilitators and organizers for their work.

This journey is offered on a sliding scale, with a recommended contribution linked to your organizational budget.

How to Apply

Please fill out this organizational application by April 1st, 2022. We will review applications in the order they are received, and will follow up if we have any additional questions. You can expect to hear from us by the end of March! You can find an application in Spanish here.

You can read more details about this learning journey by reading our Collaborate to Co-Liberate - Explainer.

Nuevo plazo de solicitud: 1 de Abril

Colaborar para Co-Liberar: Estructuras y Prácticas para Organizaciones Democráticas

En el transcurso de módulos de 12 meses de duración, examinaremos algunas de las preguntas más difíciles y desafiantes que enfrentan las organizaciones de movimientos sociales que se esfuerzan por construir estructuras organizacionales que ejemplifiquen sus valores de un mundo más inclusivo, democrático, encarnado y dador de vida. Todos los módulos juntos presentan un viaje a lo largo del camino iterativo, dinámico y en espiral a través de la transformación organizacional.

Este viaje se dividirá en cuatro temporadas. Dentro de cada temporada, exploraremos una faceta central del cambio organizacional desde múltiples perspectivas y orientaciones.

En nuestro primer módulo, invitaremos a los participantes a explorar los linajes del movimiento y consideraremos temas que incluyen la reciprocidad, el feminismo queer negro y la descolonización/anticolonialismo. A lo largo de cada módulo, tejeremos esta atención fundamental al poder, la raza, el género, la clase y la opresión estructural.

Una vez que se basa en estos marcos y linajes de movimiento, nuestra primera temporada se enfoca en la base central de este trabajo: construir relaciones fuertes y resistentes. En esta temporada exploraremos herramientas personales e interpersonales para construir un equipo inclusivo, efectivo y empoderado.

Nuestra segunda temporada se basa en estas capacidades relacionales centrales, usándolas para navegar y desarrollar habilidades críticas para la transformación dentro de algunos conceptos básicos clave de la organización: toma de decisiones, distribución del trabajo y creación de una cultura de responsabilidad.

Ya que estén sólidos los cimientos interpersonales y organizacionales, nuestra tercera temporada ofrece marcos de trabajo para mantener estas estructuras democráticas y liberadoras incluso mientras navega por las presiones del capitalismo y los mundos corporativos fuera de su organización.

Finalmente, nuestra cuarta y última temporada ayuda a situar este poderoso cambio organizacional dentro de su red de relaciones.

Una hoja de ruta para el viaje

En resumen, Colaborar para Co-Liberar se dividirá en cuatro temporadas, y cada temporada se centrará en un conjunto básico de habilidades, temas y estrategias que son clave para la transformación organizacional. Las descripciones de las temporadas y los módulos se enumeran a continuación para mayor facilidad y claridad.
Temporada uno: Relaciones en el centro: basarse en valores compartidos, facilitar la colaboración y comprometerse con el conflicto
Módulo uno (Mayo): Por qué esto es importante / Lecciones de nuestros antepasados
Módulo dos (Junio): Facilitación centrada en las personas
Módulo tres (Julio): Transformación de conflictos
Segunda temporada: Fundamentos organizacionales: Desarrollo de Liderazgo, Toma de decisiones, y Distribución del Trabajo
Módulo cuatro (Septiembre): Crecimiento y desarrollo de liderazgo
Módulo cinco (Octubre): Toma de Decisiones
Módulo seis (Noviembre): Distribuya el trabajo democráticamente
Tercera temporada: Navegando el capitalismo: Alineación de mesa directiva y estatutos, Presupuesto y finanzas participativos, Compensación
Módulo siete (Enero): Alineación de su mesa directiva y estatutos
Módulo ocho (Febrero): Presupuesto Participativo y Finanzas Liberadoras
Módulo nueve (Marzo): Compensación
Cuarta temporada: Conectando a tu Red de Relaciones
Módulo diez (Mayo): Responsabilidad
Módulo once (Junio): Planificación Estratégica y Visión
Módulo doce (Julio): Facilitando el cambio

Cómo funciona Colaborar para Co-Liberar

Colaborar para Co-Liberar: Estructuras y Prácticas para Organizaciones Democráticas consta de doce módulos interrelacionados. Cada módulo tiene dos componentes principales por mes, con oportunidades adicionales opcionales de participación. Los participantes se dividirán en cohortes de aprendizaje, en función de las estructuras organizativas (tamaño, edad de la organización, etapa de desarrollo/transformación) y/o identidades/roles (personas negras, indígenas y de color, equipos de liderazgo/directores ejecutivos, etc.).

Cada módulo se lanzará con un seminario web/enseñanza de 2 horas sobre el tema central, facilitado por líderes organizacionales y expertos en el tema .

Este seminario web será seguido por un diálogo de inmersión profunda basado en cohortes. Esta hora y media facilitó el diálogo comunitario que explorará una dimensión más profunda del tema del módulo, con especial atención al examen de las prácticas a través de lentes contra la opresión.

A lo largo del viaje, nuestro equipo apoyará a las personas y organizaciones para que organicen "Aprendizaje Comunitario" o sesiones de capacitación entre pares dirigidas por la comunidad. Los administradores del Nonprofit Democracy Network invitarán a expertos de la comunidad y líderes organizacionales con experiencia relevante a unirse a estas oportunidades de capacitación colectiva, y todos los participantes serán invitados a participar, aprender y ofrecer sabiduría y conocimiento en estas reuniones.

Finalmente, algunas veces a lo largo del viaje, organizaremos paneles de discusión con organizaciones en varias etapas de transformación democrática para compartir ideas, mejores prácticas y obstáculos de su viaje de cambio organizacional.

¿Quién está facilitando este viaje?

Colaborar para Co-Liberar será administrado por un grupo de "Creadores de Sentido" de Nonprofit Democracy Network, consultores y miembros de NPDN con una gran experiencia en la implementación de cambios organizacionales. Los creadores de sentido guiarán a nuestros cohortes a lo largo del viaje de un año, ocupando espacio en diálogos de inmersión profunda, apoyando "Aprendizaje Comunitario" y ofreciendo recursos y referencias para un compromiso más profundo.

Los seminarios web de Colaborar para Co-Liberar serán facilitados por un increíble equipo de facilitadores invitados, expertos en sus campos de gobernanza colectiva y transformación organizacional.

Los facilitadores principales incluyen a Patricia St Onge, Hope Ghazala, Mala Nagarajan, Tamila Gresham, Ana Martina, Shilpa Jain, Simon Mont, Ananda Valenzuela, Richael Faithful, Gopal Dayaneni, y Chris Tittle, entre otros invitados especiales.

Beneficios adicionales

Además del rico viaje de aprendizaje, la inscripción en Colaborar para Co-Liberar incluirá algunos beneficios adicionales:

Membresía automática a la Comunidad de Práctica en la línea web

Durante el transcurso del año, el Centro Legal de Economías Sostenibles albergará varios Cafés Legales específicamente para Colaborar para Co-Liberar participantes, donde puedes obtener asesoramiento experto de abogados del movimiento sobre cualquier pregunta legal difícil que tengas en tu proceso.

¿Cuánto cuesta el viaje de aprendizaje?

Queremos que la participación en este viaje de aprendizaje sea lo más accesible e impulsada por la comunidad como sea posible. También queremos compensar justamente a nuestros facilitadores y organizadores por su trabajo.

Este viaje se ofrece en una escala móvil, con una contribución recomendada vinculada a su presupuesto organizacional.

Cómo aplicar

Complete esta solicitud organizacional antes del 1 de abril de 2022. Revisaremos las solicitudes en el orden en que se reciban y haremos un seguimiento si tenemos alguna pregunta adicional. ¡Puede esperar tener noticias nuestras a fines de marzo! Puede encontrar una solicitud en inglés aquí.

Puede leer más detalles sobre este viaje de aprendizaje leyendo nuestro documento: Colaborar para Co-Liberar: Explicación

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The structures, practices, and cultures of the nonprofit sector are failing to empower the full potential of the people who work within it as the sector struggles to meet the challenges of our times. The Nonprofit Democracy Network is a community of practice that is evolving the sector from the inside out.

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(Toolkit) "Collaborate to Co-Liberate: Structures and Practices for Democratic Organizations"

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(Toolkit) "Collaborate to Co-Liberate: Structures and Practices for Democratic Organizations"

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Transformative change work requires that we do the personal work to unlearn the horizontal violence and psychological harm that plague our movements for justice. From one-on-one coaching with individuals to identity based caucuses, we bring a healing-centered and resilience-focused approach in supporting reflection around resistance and change, igniting opportunities for bold growth and visioning.