After 44 years of working with nonprofits, here’s my confession: I’m sort of done with the normal nonprofit structure.

You know what I’m talking about, but just to be clear: These organizations …

• Are incorporated in their respective states and granted tax exempt status by the federal government.
• Are governed by a volunteer board of directors who, in many cases, oversee paid staff.
• Have a social mission: educational, religious, artistic, environmental, health, etc.
• Often struggle with governance, funding, operations, staff retention, and so on.

Can we find a better model?

To paraphrase an old joke, no one calls the doctor when they’re feeling well. In the same way, almost nobody contacts a consultant when their nonprofit is running smoothly – and let me tell you, business is good. Indeed, my in-box keeps filling despite my best efforts to work less. 

I am one of many; an army of consultants and trainers exists to treat ailing organizations. Some are even busier than me. 

If all these nonprofits need help, what does that mean? For at least a decade, I’ve asked the question this way: Do we have a useful model managed by imperfect people, or is there something inherently wrong with the structure? 

If the problem is the model – rather than the people – how else can we organize ourselves? Are there better structures for creating social change?

With the support of various colleagues – shout-out to Christal M. Cherry, Renee Rubin Ross, and The Osborne Group – we’ve been researching alternatives. Here’s a snapshot of what we’ve learned.

Level 1: Tweaks and hacks

Many groups are messing with the traditional model in different ways, trying to make it more equitable and accessible. 

For example, during the pandemic and beyond, lots of organizations moved their board meetings online. This makes it easier for some folks to participate (I’m thinking of a colleague with multiple sclerosis who struggles to travel) while making it harder for others with poor internet, insecure housing, etc. With online meetings, the accessibility question cuts both ways.

Two other organizations have created interesting tweaks:

• Project Chimps allows couples to share a board seat – one vote per couple – which has made board service easier for families with children, jobs, and other commitments.

• Youth as Resources, a grantmaker supporting youth-led projects, reflects their values in their leadership: all twenty-five board members are between 14 and 24 years old!

Level 2: Rethinking governance

Others are asking a different question: Within the limitations (and opportunities) of the 501(c)(3) structure, how can we re-imagine governance? How can we think differently about the roles of board, staff, and decision-making?

An interesting example comes from the Mountain West region, where an Indigenous-led housing development group applied to the IRS for their tax exemption. Rather than making decisions through voting and Robert’s Rules, they “decolonized their bylaws” by outlining their traditional, consensus-based approach … and the Feds approved their application.  

A few other interesting examples:

• Beth Jacob Synagogue no longer has a board president. They moved to a shared leadership model, with the president’s tasks divided among multiple board members.

• SVP Portland shifted to “minimum functioning board” strategy, transferring much of their decision-making to staff, committees, and ad hoc work groups comprised of partners and grantees.

• Sustainable Economies Law Center asks, “What do you get when you cross a worker cooperative with a 501(c)(3) nonprofit?” Their version includes employees leading the board of directors.

Level 3: Other structures

One of the great untold nonprofit narratives: the “power below radar” of unincorporated, informal, all-volunteer groups. These might be immigrant mutual aid networks, community gardens, or local activists working to create affordable housing or fight pollution.

Many are led by people of color. The New England Grassroots Environmental Fund has been supporting their efforts for a quarter-century.

In other words, you don’t need 501(c)(3) status to have an impact. Some groups use fiscal sponsors to host their projects. Others are structured as for-profit businesses, like my local food cooperative, and have strong social missions.

An interesting hybrid is FareStart, which provides culinary and life skills training. This nonprofit actually began as a for-profit business, so entrepreneurship is part of their DNA. In fact, their workforce development model is so successful that they created a consulting division to share their strategies – and they’ve trained 250 client nonprofits across North America. 

That’s what I call scaling your impact.

Want to learn more?

On October 22, I’m teaming up with Renee and Christal to present a new webinar: Beyond the 501(c)(3): Thinking Differently about Governance, Nonprofit Structure, and Social Change. It’s hosted by the Maine Association of Nonprofits and it’s open to everyone, everywhere.

Not available on October 22? We’re repeating the same program on October 24, hosted by Community Foundation Gunnison Valley. You’re invited to that one, too. 

Register today and we’ll see you soon!