Follow the money...

TLDR; Instead of worrying about the best structure of a community organisation, think about where your money goes. That is what defines it as community-led.

This one is a bit of a ramble...

The conversations on community ownership have been ongoing over the years. I originally wrote down that it has evolved, but then changed it to ongoing. Thinking about it, I'm not sure it has evolved. Maybe that is a harsh statement. Perhaps more accurately, it's a topic that doesn't get much attention these days.

The reality is that community ownership is a complicated, nuanced and context-specific topic. One that is presented superficially as having simple solutions, yet beneath any community is a huge amount of complexity to create and deliver upon.

The "community ownership" conversations haven't helped us

It is my opinion that these "community ownership" conversations have held us back. Apart from often being a distraction from the day-to-day needs, these conversations turn into a sense of entitlement and create complexity further down the line, often putting the organisation at risk. A better community future involves getting better at building communities that make better business sense.

Overall, I don't believe in community ownership, but we can achieve similar things through employee shares, making use of existing company structures like Coops and simply sharing the profit fairly.

Instead, I believe we can act generously in any company structure—our actions and where we put our money are what makes us community-led. The company structure becomes (somewhat) irrelevant, it's more about how we actually lead.

Community ownership - observations and commentary

The thoughts and commentary I've heard over the years cover not only community ownership but also how communities are run. They are closely related.

The complication of sustainability. Communities often start as ideas, rather than as a business model. Too many communities just aren't sustainable or aren't clear on what their main revenue source will be. Every business needs revenue, it's as simple as that. Making money is much harder than people expect it to be, it's why most businesses fail. Community owned businesses have an even lower chance of surviving with all the added ownership expectations that they may be pressured to 'solve' upfront without even knowing if the business will work.

With ownership comes legal and tax implications. Who can actually legally own it? What country is it formed in? What legal compliances are required? This is often conveniently missed out from the conversations (and Web3 communities are often proposed as a solution 🙄).

It's not uncommon for members to believe they know what is best for the community because they've shown up a few times to contribute. There's no shortage of opinions on what it truly means to be "community-led" and how we should run our communities. Showing up should not equate to that entitlement to ownership.

Business ownership is a serious endeavour that comes with significant responsibilities. Most people simply don't have real capacity for these types of things. And would they put their house or finances at risk for it? Would they sacrifice the many hours that are normally involved in making things work? Are they willing to sacrifice during recessions? Probably not.

Are they willing to invest their own hard-earned cash? Sometimes, but mostly not.

Community has to be owned by the people. Yet, this comment is made with no real understanding of the responsibility and complexity that ownership bring to business entities. People want the ownership and the rewards, but not the responsibility of showing up to do the work. The reality is that the more people who own a stake, the harder it becomes to make decisions.

Web3 was rampant with conversations on ownership. The predatory hype gave community a bad name. Full of people with loud voices, no action, and no actual value in what was being built. This type of ownership came with the expectations of all the benefits of owning something, but with no actual responsibility to keep the community going.

Non-professional investments were hot for a while, but maybe not what they seem. Equity for Punks from BrewDog is one such example of non-professional investors going along the ride to own a bit of a 'community-led' company. It looked great on the surface. BrewDog grew, but not without its problems. It has had "culture issues", which really shows that community investment does not equate to being culturally community positive as a place to work.

Whilst BrewDog's current downfall may not be directly related to Equity for Punks, it is clear that it has been a difficult thing to manage by BrewDog itself. The ownership was attractive to the people, but the reality is that this approach has not really benefited the investors themselves. The actual returns of investment didn't happen, which is, of course, possible with any investment, but this has the added complexity of shares being difficult to sell on.

Perhaps we can file this under "nice idea, nice income, nightmare to manage".

Community businesses are expected to rely on volunteer support, yet this can often be so much harder to manage than simply hiring people to do the work. Relying on volunteers, whilst it has its benefits, holds us back as communities way more than we tend to share openly.

This leads into...

Communities businesses are held to different business standards. The sense of ownership that members have can feel great, and feedback is usually well-intentioned. But for some reason it gives people an opinion on how things should be run.

It's actually quite funny how often people ask me if Ministry of Testing is full-time job, or if I just do it on the side. It's hard for people to see that community can be serious business. And for some reason they think they can have opinions on who gets paid what, what we should charge, and yes, we are even questioned why we should charge at all. Perhaps if we hid the community aspect then people's perceptions would change.

...honestly, it can be exhausting...

You need to love this path, otherwise the pain may not be worth it.

To be clear, I personally wouldn't change this way of doing things. Personally, I feel all businesses should be community-led. The world would be a better place if that were the case.

But as it stands now, having community members being opinionated on every aspect of our operating model...it's exhausting. And often depressing. It has positives too, but we shouldn't ignore the downsides.

I don't doubt that being held to these different standards is well intentioned, but it's too easy for people to make suggestions without understanding the system underneath. It is our job as community and business people to make these decisions because we have done the work to understand the system.

The risks, just like any business, are on the shoulders of the founders or shareholders. And whilst I would always likely continue to do things this way, what I would love to get better at is setting clearer boundaries, expectations, and ways of doing things.

Communities lead the way, but fail to find financial stability. What I see far too often are community-led businesses leading the way with ideas, research, innovation and better ways of doing things, but the reality is they struggle to find a sustainable business model.

This is likely why communities getting acquired feels so attractive to founders, it's an easy way to continue to exist without as much of the financial stress. Though, to be honest, with a long-term view, I'm not sure if I've seen a successful community acquisition.

This is very easy say, much harder to action. 18 years in, and I'm only now doubling down with a sales mindset. Partly it's because I feel our product is in a great place, but it's also because being more sales and product focused is essential for our survival and success. When we have a strong product alongside a profitable business then there is no need to feel the pressure to sell.

Not calling ourselves a community is ever so tempting. When we don't label ourselves as being 'community-led', these financial transactions are accepted, people make decisions where to spend their time and money. It's like it's easier to accept because that monetary and less emotional inducing transaction makes the decision making easier.

But I live community down to the bone. I'm personally not shying away from the term. My current stance is to lead by example and show that community-led businesses are how most businesses should operate in our current world. And being community-led is simply being people and environment led. We understand that we work as part of a system, where we need and respect one another.

But at some point we have to exit to something. I find myself increasingly spending time thinking about what it might look for my business. It's been 18 years. I love what I'm doing, at his point in time. But bloody hell, has it tested my limits? Yes, it has. Can I keep going forever? No one can. I have to think about how we continue to exist.

"Exiting to community" sounds exciting. Here are two examples. I love the idea of it, but I also worry that they are bound to fail. I'd love to see them succeed, but I feel they may end up going down similar routes to community funding rounds. Sounds good in theory, but in practice, it is unlikely to work in the long term.

Exiting to Earth from Patagonia is an amazing example, which in time could become a more widely adopted practice.

Exiting in more traditional ways is probably more realistic. It still has risk of failing, but by trying to build a sustainable business we can optimise our chances of not only having better outcomes, but also by holding out for the best buyer possible. We can get bought, not out of desperation, but out of doing what is best for all parties involved. This means not just about trying to sell at the highest price, but it's also about considering factors on whether the buyer is the best option for the employees and community.

Exit to employees is another option. Co-ops are and option and nothing new. In the UK, there are incentives to sell companies to employees. Again, it sounds great, but in practice, it seems to take years for it to actually happen.

Non-profit from the start is valid too. Ghost has done this really well, the non-profit nature means they have to stay focused on the goal of serving the publishing industry. Being a non-profit has forced them to be community-led. It means they can't be acquired and therefore the thought therefore doesn't distract them. As a result, they've been amazing at focusing on their mission. The difference with Ghost is that they have always led with a product. We can be community-led, have a product that people pay for, make money and do good in the world.

Afterall, is community really not mostly down to doing good for people and the world around us?

Ted is another non-profit that fits under a similar philosophy, though their product is very different.

Follow the money

What makes a company community-led is not the formal structure. It isn't whether we call ourselves a community either. It is determined by spending our money with care. Yet in the world of community we shy away from the topic of money. That needs to change. With money comes power.

Instead of focusing on how businesses or communities should form, we should think more about following the money and where it gets circulated. The who, what, when, where and why and how we spend our time and money is what defines us as community-led.

This doesn't mean the company structure isn't important, it simply means that every company can be community-led and we shouldn't let the company structure prevent us from adopting good community practices. More change will come when every company can be community-led.

It's somewhat easier to take a perspective of following the money:

Follow the money means to trace the flow of funds in order to uncover the true motives, power dynamics, or sources of influence behind decisions, actions, or events. It’s often used in investigative journalism, politics, and business to suggest that financial trails reveal hidden relationships, corruption, or priorities that people might otherwise conceal. By examining where money comes from, how it moves, and who benefits, the phrase implies that financial evidence often tells a clearer, more honest story than public statements or appearances.

Being community-led means ensuring the right people (and the planet) benefit from our work, when we know others will judge us by following the money, we can ensure we design decisions that align with investing back into what matters. We can judge ourselves too, and ensure we build care wherever money flows.

As community organisers, knowing that the money can be tracked can not only empower us to advocate for better decisions, it can also help us tell stories, or communicate along the way of where the money goes.

This then means we show, through action, that we care. When community is care, there is no better way to show that than through real action, backed by money. Following where the money goes also follows where the care is.

There is no rule book for this. Creativity and operating with care are essential.

Here's one way we've been communicating where the money goes.

A scholarship is just one way to give back and help people follow the money.

The options are endless:

• hire for diversity
• paying people fairly
• hire people from the community
• cover people's travel expenses
• spend money on helping people
• donate to charity
• don't be greedy
• redistributing power
• fund or support underserved areas
• invest in your people
• spend time with your people (time is money)

We can pick and choose what we support and how we build it into our community. It can be easy to fall into the trap of needing to be open with every financial piece of information, personally I'd avoid that, purely because opinionated people can easily judge without fully understanding the bigger picture.

Having a 'contained money story', like the MoT Scholarship makes it easier to communicate and adapt as the community evolves. It's not overwhelming to manage. It feels good for us and for the people. And it really does keep people coming back.

It's easy to talk about business and community in theory.

In theory, it's possible to have community shares. Or do the extra paper work to start a non-profit. Or to map out a plan for success. And to predict profit. 🫠

In practice, things are much harder. Ideas don't always go according to plan. Money doesn't always come in. Trends change. Markets collapse. Our ideas aren't as good as we thought they would be. Things grow in a different direction. We can drown in community operations.

When we think about following the money, it means that we know others can do their own due diligence, so we may as well operate with care and ethics.

And then why not make it easy for people to see how we operate? How can we live these values? For people to see that we focus on what is practical and what helps move the needle. Today. In practice, not in theory.

As time passes, our businesses will mature. The theory starts to become reality, but that takes time, and it's created through the daily actions.

Sometimes what makes sense is to keep things as simple as possible. When we follow the money it makes decision making easier.

The beauty of it is there are no barriers to do this. We don't have to change everything. We need to make a decision to act with financial care. Once. Then twice. Then thrice.

Any business can do this. The structure does not matter. We can choose to spend our money on community care. The real challenge is convincing capitalist minds to take action. For some reason, we are led to believe that companies cannot care. We can. And my dream is to normalise it.

There are no right answers here. We can admire people who achieve great outcomes, but we are also all dealt different cards. We can hold our heads in pride to make the best decisions possible each day we show up.

The world is in a crazy place. I can't help but think that we need more companies to show that we can act with financial community care.

Capitalism and community need not be separate, and just imagine a world where the majority combined the two seamlessly.

What a beautiful place that could be.

🐌