Why is it so Hard to Talk about Organizational Structure?

Milwaukee       Amani United, like a butterfly trying to emerge from a cocoon, is an embryonic organization attempting to emerge from its status as a project of a larger organization into a membership, resident-led organization that can spread its own wings and fly.  On this point everyone agrees, including the leadership core of Amani United and its parent organization, the Dominican Center.  Getting there is never easy, but it is easy to forget how important it is to get the structure right from the very beginning, and that was the task for hours of discussion on a harsh spring evening in Milwaukee as Amani leaders gathered to take on this task.

Ironically, structure is so important, but why is it so hard to talk about organizational structure?  I think there are a lot of reasons.  Organizational experience and participation continue to plummet whether in unions, voluntary associations, scouting, church, or even the NRA.  People just don’t have the cradle-to-grave kind of organizational attachments that were common fifty years ago.  But, it’s not just that.  The models are less transparent and less discussed.

Regular reports indicate that civic education is no longer a fundamental part of public education throughout the United States.  Fewer schools teach it at all as a mandatory subject.  People no longer know, even in a rudimentary way, how local, state, and federal governments work.  There’s also every indication that confusion is by design rather than accident.  Right now, in the standoff between Congress and the White House over information and transparency and the Trump administration’s refusal to respond to subpoenas, we can see a vivid example.  Politicians and governmental employees at all levels don’t want the public to know how it all works or see behind the screen of TV, tweets, and press releases.  Such concerted efforts to not make democracy work, make it harder even at the grassroots level for people of good will and intention who are trying to design a structure for their own organization to puzzle out exactly what their own democracy should be, making every choice hard and every decision difficult.

Trying to address this with the Amani United leaders, I devised a page-and-a-half “decision tree” or checklist of threshold structural questions with yes-or-no answers in some cases and little-more-none and similar multiple-choice selections when it came to accountability questions.  Where people came to consensus most quickly was on the need to hold leaders accountable, and this might be part of the reaction to current organizational and governmental practice.

The hardest questions revolved around confusion over exactly what a nonprofit association is and what it can do as a nonprofit versus a tax-exempt nonprofit.  Funders and others have so hopelessly blurred the lines that regular citizens simply don’t know the difference, forcing them to make kneejerk decisions that might hobble their futures without even understanding the choices they might be making.  The other Gordian knot is membership itself.  People are clear they want leaders accountable, but it becomes harder for people to easily sort out their conflicting desires to both be inclusive in their community and also be effective as an organization.  Can just anyone be a member?  Should there be classes of membership with different rights and obligations?  Should members pay dues and agree to the principles of the organization?  Can nonresidents be members of a community-defined organization like Amani United, and what should be done about property owners who may be absentee landlords.

Yes, these questions aren’t easy to answer in the best of circumstances, but once everything about organizational and civic activity is “throw the rock and hide the hand,” people are left clueless in trying to devise a more perfect union in their own organization.

What can I say?  It’s a process!

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Related Party Transactions Tripping Up the NRA

New Orleans        When it comes to full on violence, the NRA is not “Game of Thornes” or “Barry.”  The National Rifle Association (NRA) likes its guns, but tends to be more of a “throw the rock and hide the hand” operation.  Nonetheless, it’s caught now in its own crossfire that erupted at its national convention when internal conflict became public revolving around Wayne LaPierre, the longtime chief executive, Ackerman, their multi-million dollar public relations, media, and tv contractor based in Oklahoma, and Oliver North, who until a minute ago had been the high profile public figure serving as president of the organization.  LaPierre won this round and forced out North by denying him nomination for a second term after North had demanded that LaPierre resign and offered him a golden parachute to do so.  It couldn’t happen to a nicer group of people.

More interesting is the investigation over the nonprofit tax-exempt status of the NRA in New York State and potentially Texas.  One of the main pillars of the inquiry has to do with what are called “related party transactions.”  The hot sauce underneath this story involves a charge that Wayne LaPierre accepted $275,000 worth of clothing from an NRA vendor over a period of years.  I have to admit my first thought about hanky-panky in the NRA wouldn’t have involved LaPierre’s suits.  This is no Brad Pitt or Adam Driver modeling guy.  Pictures of LaPierre in the paper and on television would have him more in the role of an angry accountant screaming with a mean face at a cashier about a mistake on his restaurant bill.

A related party transaction knocks on the door of something that sounds more ominous which is “self-dealing.”  In business, Wikipedia offers this definition:

“…a related party transaction is a transaction that takes place between two parties who hold a pre-existing connection prior to the transaction. An example is how a dominant shareholder may benefit from making one of their companies trade to the other at advantageous prices.”

Issues that tend to mitigate whether such transactions are problematic tend to revolve around the degree to which any dominance is diluted or exerted for example with common staff or board members.  Nonprofits, such as ACORN were always careful to make sure that a majority of the boards of tax-exempt nonprofits were not the same as ACORN’s leadership, even though there might be representatives of ACORN on the 501c3 board.  The same would be true for shared staff and how any such labor was priced fairly and even making sure that rental arrangements on shared space and cooperative items like xerox machines and phone systems were equitable to all parties.

A central issue is disclosure.  Audits and governmental reports for nonprofits, much like for profit businesses, were careful to disclose related party transactions.  In our annual audits these transactions would sometimes run on for pages.  None of this is either illegal or circumspect.  As www.accountingtools.com details:

There are many types of transactions that can be conducted between related parties, such as sales, asset transfers, leases, lending arrangements, guarantees, allocations of common costs, and the filing of consolidated tax returns.  In general, any related party transaction should be disclosed that would impact the decision making of the users of a company’s financial statements.

The NRA press reports indicate that there is smoke, but it is impossible to tell whether or not there is fire yet.  Did they not disclose related party transactions?  Were the suits an inducement leading to self-dealing or an unfavorable pricing scheme between the vendor and the NRA as the dominant party?  We don’t know.  The NRA says the charges have been internally investigated and found wanting.  New York and its Attorney General Leticia James are going to see if that is in fact the case or not.

Shots are being fired, but we won’t know if they have really hit the NRA near its tax-exempt heart until the smoke clears.

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