Mixed contribution ownership

Considerations towards a mixed contribution ownership approach

Organisations could be owned by contributors that provide different types of contribution. Mixed ownership would mean a combination of worker, donor or consumer based contributors would receive governance rights to influence how the organisation is operated. This approach has a number of implications that could impact how an organisation would be governed in practice that need to be considered.

Organisation examples

The following are a few example organisations that might consider a mixed ownership model. In all of these examples at least two types of contributor could want to have an influence over how an organisation is governed and operated.

Community bank

Consumers could want to have ownership over a community bank so that they can ensure it is operated for the benefit of the local community and not just for profit. Workers could want ownership in the bank as this could represent their full time job, due to this it will be likely that they will want to influence how they operate the organisation.

Local food market cooperative

Consumers could want to have ownership over a local food market cooperative so they can ensure that the food is always locally sourced. Workers would likely want ownership as their stall or shop could represent their livelihood and full time job that they’d want to have influence over.

Poverty fighting charity

Donors could want to have ownership in the organisation so that they can influence how their donations are used to help fight poverty. Workers would want ownership in the charity as their role could represent their full time job that they’d want to have influence over.

Problems with mixed ownership

Increased governance complexity

Giving two types of contributors the responsibility of operating an entire organisation is inherently more complex than leaving this responsibility to one of these groups of contributors. A larger amount of individuals involved in governance will usually mean it takes longer for people to become well informed about each decision that gets made. More time would likely be needed for people to vote on these decisions. Communication would be more challenging with two different groups of contributors as both would now need to be contacted and informed about any decisions.

Conflicting responsibilities

Donors or consumers that have a moderate to large amount of influence over how an organisation is operated could be problematic. Workers could disagree with the decisions that are made by consumers or donors. There is a risk that donors and consumers are not as well informed as the workers on how the organisation should be operated on a day to day basis. Workers could have disagreements with donors in charity organisations in situations where donors have a large amount of influence in deciding how the organisation is operated and how they use donor money. However if workers govern the organisation and donors disagree with their decisions they could simply decide to stop donating in the future.

Changing or unbalanced governance control

Contributions could determine the amount of governance rights that each contributor receives. In these situations the amount of contributions from each group of contributors could result in changing governance control over an organisation. Sometimes this could result in certain contributors having an unbalanced amount of influence over the organisation for an extended period of time. This could occur if there were sudden spikes in one type of contribution such as donations, consumption or labour contributions.

Contribution comparison complexity

There is a complexity around determining what is fair and reasonable when comparing different types of contribution. In a mixed ownership model each of these contributions might result in governance rights. Either of the following approaches for calculating voting power could be problematic:

• Competitive organisations that calculate contribution value - Competitive organisations might want to give people more proportional influence over the organisation based on the value of their contributions. This means that evaluation of one type of contribution when compared to another type needs to be fair. An example situation could be consumer purchases, should the full value of the sale price be used to determine their voting power or just the profit generated? And how would that compare to the approach being used to evaluate worker contribution voting power?

• Cooperative organisations that use a threshold value - Cooperative organisations may prefer to give people equal voting power once someone hits a threshold of contribution. This could be problematic for a mixed ownership organisation as the difference in people's contributions could be much higher across a larger diversity of contributors. This could make it unfair for certain contributors who have contributed much more than others. One consumer for instance could have purchased enough goods or services to pay for multiple workers yet their voting power is greatly diluted.

Solutions

Organisation ownership does not need to include multiple types of contributors for certain decisions to be spread out across these multiple types of contributors. Multiple contributor groups also do not need to handle every decision that happens in the organisation. These decisions could be divided and grouped together and the most suitable type of contributor could be delegated that type of decision. Decisions could then be handled by the most suitable type of contributor. Who makes what decisions could also change over time, the adopted approach does not need to be fixed and unchangeable. Delegating decisions to the most suitable group of contributors is highly desirable as it makes governance simpler, helping to reduce conflicting responsibilities and prevent changing or unbalanced governance control between two contributor groups. The complexity of comparing different types of contributions could also be removed.

Although it could be considered desirable to increase governance involvement across many decisions, the cost of involving two types of contributor in every single organisation decision is likely too high to justify the complexities and costs of this ownership structure. Therefore it is difficult to recommend this approach for most organisations.

A simpler approach that can achieve much of the same benefits is to use a single contributor ownership model and then use a mixed governance structure where certain decision responsibilities are delegated to the type of contributor that is most suitable to handle them. A number of delegation approaches could be considered that handle this need for dividing responsibilities across multiple contributors. Examples include optional voting power delegation to other people, agreements and bylaws or the use of appointed leadership positions.

Mixed contribution ownership is not required to operate a mixed contribution governance structure. Therefore a mixed contribution ownership approach does not need to be recommended under contributionism. Solutions that are focussed around the delegation of responsibilities can solve these issues and create mixed contributor governance structures.