Great post, I agree with a lot of it. There is definitely a kind of large org sclerosis that can develop, but IME it’s generally associated with much larger orgs unless you have very dysfunctional management (which is a risk!).
One missing factor I think is fungibility. It’s hard for donations to be funged between organizations, but it’s very easy for them to be funged between protects within an organisation. So we might expect donors to have some preference for separate orgs for separate projects.
One missing factor I think is fungibility. It’s hard for donations to be funged between organizations, but it’s very easy for them to be funged between protects within an organisation. So we might expect donors to have some preference for separate orgs for separate projects.
I agree this could be a benefit, but I see it as being fairly minor. I think that the cost that larger organizations would need to incur to make trustable promises of separation, can easily be less than the costs of having totally different small organizations for each of these projects.
In most jurisdictions, donors and charities can agree to legally restrict donations—e.g., this money can only be used for the philosophy department unless the donor consents to removing the restriction (or in very limited cases, this is done by court order). Indeed, if my recollection of Catholic diocese bankrupcties holds, this sort of structure can provide some protection for the projects from exogenous legal shocks (in that case, child sex abuse claims against other projects) if the formalities and accounting are done correctly.
However, it seems there would be a tradeoff between anti-fungibility (which is also important for protecting project independence and minimizing centralization) and some of the flexibilities your post identifies. Suppose we created a big organization out of 20 existing micro-organizations, which became BigOrg projects. Those projects continue to obtain funding -- 75% of which is tightly locked to that project, and 25% of which is less restricted (i.e., it can be used to pay the project’s fair share of BigOrg’s legal/ops/management/etc costs). Under that model, BigOrg doesn’t seem to have much if any fungible money—unless it persuaded a funder to make additional donations for its unrestricted use.
I suspect that a number of your suggestions about management flexibility would be difficult under tight internal accounting controls. Most staff would be locked to work for specific cost centers to comply with anti-fungability/independence norms and legal requirements. You could reallocate part or all of their time to another cost center in order to use them for another project . . . but the funding has to be in place for them to bill that cost center.
(separate comment for agree/disagree voting purposes)
While much has been rightly said about the job insecurity created by small grant-dependent organizations, that model does provide some job security advantages. If your independent organization has two employees, a grant for this year, and six month’s runaway after that . . . you have a decent bit of job security until mid-2024. The independent organization is constrained to use its funding to accomplish the organization’s mission as stated in its bylaws, so you don’t have much job insecurity from someone deciding the mission isn’t that great anymore.
In contrast, if your org becomes a BigOrg project, you run the risk that BigOrg decides its mission isn’t good anymore (and that you’re not worth moving to another project), Even if funding is legally locked to your project, the restriction can be removed with the donor’s consent. Thus, it seems likely that some additional protections for employees, such as employment contracts vs. at-will employment, would be necessary to avoid creating greater job insecurity than already exists.
I’m not sure that bigger orgs would lead to less job security.
Living grant-to-grant certainly can feel pretty scary. Sure, you can feel confident about ~12-16 months at the very start of getting grants, but those last 3-8 months can be stressful.
Of the people I know at OP/EV/RP, I can’t think of many who got laid off.
If I were working in a larger organization on an uncertain initiative, I could imagine, and would hope for, organizations that we could trust with clear things, even if they aren’t legal. For example, if my superior clearly states in writing that my project will get 1-2 years of funding, and I know a fair bit about the history and track record of that person, I might well trust them.
I think the crux here may be how the consolidated/bigger org would be funded and budgeted. If the funding that would be going to projects of the bigger org consists largely of the same short-term / specific-purpose grants that were going to the smaller orgs, it’s probably going to be difficult for the bigger org to commit to longer-term funding for a project.
I have some concerns about switching from many small orgs to fewer bigger orgs without simultaneously changing the funding model for this work from the current style of grants to (quoting Peter’s comment) “the enduring multi-year funding commitments that are necessary to sustain a large org.” Trying to run a bigger org on small-org style funding arrangements feels like it could be the worst of both worlds.
Great post, I agree with a lot of it. There is definitely a kind of large org sclerosis that can develop, but IME it’s generally associated with much larger orgs unless you have very dysfunctional management (which is a risk!).
One missing factor I think is fungibility. It’s hard for donations to be funged between organizations, but it’s very easy for them to be funged between protects within an organisation. So we might expect donors to have some preference for separate orgs for separate projects.
I agree this could be a benefit, but I see it as being fairly minor. I think that the cost that larger organizations would need to incur to make trustable promises of separation, can easily be less than the costs of having totally different small organizations for each of these projects.
In most jurisdictions, donors and charities can agree to legally restrict donations—e.g., this money can only be used for the philosophy department unless the donor consents to removing the restriction (or in very limited cases, this is done by court order). Indeed, if my recollection of Catholic diocese bankrupcties holds, this sort of structure can provide some protection for the projects from exogenous legal shocks (in that case, child sex abuse claims against other projects) if the formalities and accounting are done correctly.
However, it seems there would be a tradeoff between anti-fungibility (which is also important for protecting project independence and minimizing centralization) and some of the flexibilities your post identifies. Suppose we created a big organization out of 20 existing micro-organizations, which became BigOrg projects. Those projects continue to obtain funding -- 75% of which is tightly locked to that project, and 25% of which is less restricted (i.e., it can be used to pay the project’s fair share of BigOrg’s legal/ops/management/etc costs). Under that model, BigOrg doesn’t seem to have much if any fungible money—unless it persuaded a funder to make additional donations for its unrestricted use.
I suspect that a number of your suggestions about management flexibility would be difficult under tight internal accounting controls. Most staff would be locked to work for specific cost centers to comply with anti-fungability/independence norms and legal requirements. You could reallocate part or all of their time to another cost center in order to use them for another project . . . but the funding has to be in place for them to bill that cost center.
(separate comment for agree/disagree voting purposes)
While much has been rightly said about the job insecurity created by small grant-dependent organizations, that model does provide some job security advantages. If your independent organization has two employees, a grant for this year, and six month’s runaway after that . . . you have a decent bit of job security until mid-2024. The independent organization is constrained to use its funding to accomplish the organization’s mission as stated in its bylaws, so you don’t have much job insecurity from someone deciding the mission isn’t that great anymore.
In contrast, if your org becomes a BigOrg project, you run the risk that BigOrg decides its mission isn’t good anymore (and that you’re not worth moving to another project), Even if funding is legally locked to your project, the restriction can be removed with the donor’s consent. Thus, it seems likely that some additional protections for employees, such as employment contracts vs. at-will employment, would be necessary to avoid creating greater job insecurity than already exists.
I’m not sure that bigger orgs would lead to less job security.
Living grant-to-grant certainly can feel pretty scary. Sure, you can feel confident about ~12-16 months at the very start of getting grants, but those last 3-8 months can be stressful.
Of the people I know at OP/EV/RP, I can’t think of many who got laid off.
If I were working in a larger organization on an uncertain initiative, I could imagine, and would hope for, organizations that we could trust with clear things, even if they aren’t legal. For example, if my superior clearly states in writing that my project will get 1-2 years of funding, and I know a fair bit about the history and track record of that person, I might well trust them.
I think the crux here may be how the consolidated/bigger org would be funded and budgeted. If the funding that would be going to projects of the bigger org consists largely of the same short-term / specific-purpose grants that were going to the smaller orgs, it’s probably going to be difficult for the bigger org to commit to longer-term funding for a project.
I have some concerns about switching from many small orgs to fewer bigger orgs without simultaneously changing the funding model for this work from the current style of grants to (quoting Peter’s comment) “the enduring multi-year funding commitments that are necessary to sustain a large org.” Trying to run a bigger org on small-org style funding arrangements feels like it could be the worst of both worlds.