Nonprofit Chronicles

Journalism about foundations, nonprofits and their impact

“Inequality is the fight of the moment for philanthropy,” writes Philip Henderson, the president of the Surdna Foundation, in the Chronicle of Philanthropy.

I’m not sure why foundations want to fight inequality. I’d prefer that they fight poverty, or work on behalf of social mobility or social justice or economic opportunity, but that’s a conversation for another day. The immediate question is, what can foundations and nonprofits do to improve the lives of poor and working-class people?

Surdna has an idea: Give more ownership of companies to workers.

It’s not a new idea — worker cooperatives have been around since the 19th century — but it’s an idea that seems to be gathering steam in the US. It’s also an idea that, at least in theory, should have appeal across the political spectrum, from Occupy Wall Street and the Bernie Sanders crowd to conservatives who believe that market capitalism offers the best way to alleviate poverty. Surdna has taken a close look, and published a report called Ours to Share: How Worker Ownership Can Change the American Economy.

Yesterday in the Guardian, I wrote about worker ownership in a story headlined Spreading the wealth: the US businesses sharing ownership with their employees. You probably do business with one or more worker-owned companies. Here’s how my story begins:

Kim Jordan, the co-founder of the New Belgium Brewing Company, had big news to deliver to the Colorado brewery’s 450 employees at their 2013 winter retreat. She told them that the company had been sold, and asked them to open the envelopes placed on their chairs to learn the identity of the new owner. Inside each envelope was a mirror.

That was her way of saying that New Belgium would now be 100% owned by its workers. Christine Perich, a veteran of the company, who became its CEO last year, says of the moment: “It’s hard to put into words what that [it] was like. It was so emotional and so powerful.” Perich now works on behalf of her 700 or so fellow employees.

Best known for its Fat Tire beer, New Belgium is one of a small but growing number of worker-owned US companies. Others include Publix Supermarkets, which operates more than 1,100 grocery stores in the southeast; CH2M Hill, a big engineering and construction firm; and WL Gore, a manufacturer of cables and medical devices best known for its Gore-Tex fabric.

Worker ownership isn’t a panacea, of course. Worker-owned firms don’t necessarily pay higher wages than their competitors; they can’t, for what should be obvious reasons. And, while they can help workers build wealth for the future, they concentrate risk because those workers come to depend on their employer not only for their wages but for their future. If a company fails, their savings as well as their job can be wiped out.

Through their grant-making, foundations can promote greater understanding of the risks and opportunities created by worker ownership. To that end, Surdna has made grants to such nonprofits as the Democracy at Work Institute and the Democracy Collaborative. With impact investments or program-related investments, foundations could also help finance startups or conversions of existing business into worker-owned enterprises.

Further reading: A Fortune magazine story about Publix by Chris Tkacyk, who spent a week working at the supermarket chainand found that people really, really like working there. Some get rich.

You can read the rest of my Guardian story here.

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