Hackerspaces & Money: The Board

Nick Farr | Posted 2009.10.20 at 10:00 am | Perma

Note: This is the second specific installment of a five part series on Hackerspace organization called “Hackerspaces and Money: Five Approaches“.

One point I glossed over is why I believe that money and organizational forms are so intertwined when it comes to hackerspaces.  This series could have been called, “Hackerspaces and Organizational Forms: Five Approaches.”  Admittedly, I’m not talking much about money, how to find it, raise it or spend it.  I haven’t talked much about fundraising, accounting or project management, though I plan to in the future.  In my observation, what happens in Hackerspaces doesn’t need to be managed or carefully organized.  Once Hackers gather in a space, they’ll begin creating and collaborating in ways that are remarkably similar regardless of culture, language or organizational form.  Projects and programs that happen in one space can easily happen in other spaces, only marginally constrained by the organizational form in practice.

I believe the “magic” that happens in Hackerspaces is universal, as are the two necessary evils:  Money and how to manage it.  Being physical spaces, Hackerspaces have real costs and real opportunities for meeting those costs.  Being collaborative spaces, the procedure for paying the bills involves some kind of relationship among the collaborators–that relationship is what we’re looking at when we discuss organizational forms.  Failing to understand this relationship among the collaborators makes any discussion of funding very difficult.   At the same time, carefully understanding these relationships as they’ve happened elsewhere gives future Hackerspaces the best chance of finding the right form for their own effort.

These forms are also heavily tied to the core source of income for each space.  The Anarchy form, for example, implies that the rents for a space are essentially appropriated.  The Angel form implies that they’re donated.  The Owner form implies that they’re taken care of by a single participant, who generally subsidizes them.  Both the Board and Membership forms implies that these costs are paid collectively by the participants, most often through membership dues.  Hackerspaces, regardless of form, can solicit donations from the public, host classes for a fee, throw rent parties, sell shirts online, or Club-Mate in the space.  However, each of those activities is handled differently depending on the form.

The Board Form

The Artifactory, Kwartzlab, Collexion, and Revelation Space are all different examples of the “Board” form.  While each space heavily relies on its membership, each space has an involved subset of members that makes decisions.  In a way, the “Board Form” is the least well-defined of the five forms and most prone to combination with other forms.  Founder Todd Wiley describes Collexion as a hybrid of the Angel and Board forms:

Our board consists of people from our local chamber of commerce, universities, and higher ups at the local big-name tech companies (Lexmark & HP).  This helps give us the legitimacy we need to raise funds.  The board likes that they are fostering innovation, and see it is an economic development boost, because Lexington loves brains more than zombies do.  The board is glad to help us organize things, find money, and host events, but most ideas come from the membership, where there isn’t a set hierarchy…By relying on outside sources we’re going to make membership as accessible as possible ($5 / month for students).  The less barriers there are to experimenting the better…I think it will be successful, and free up hackers to hack, and those that are interested enough can take the reins and try to find monies.

This series was inspired by Koen Martens, who also describes Revelation Space as a hybrid of the Membership and Board forms:

As you might remember, we from revspace (den haag) were in doubt about the structure to choose. In the end we settled for the ‘stichting’, basically number four, mixed with elements of a ‘vereniging’, number 5. The board is ultimately responsible, however we define ‘participants’ that have the right to install and deinstall the board, as well as advise the board.

In many cases, a Membership space will have a Board of Directors.  However, this doesn’t mean the space is taking on a Board Form, especially when a Board is required by corporate law.

The functional power that board has is the determining factor.  If the Board is essentially a paper tiger, with the membership in functional control of affairs, the space is probably best suited to the Membership form.  Punkin describes Kwartzlab as an example:

Legally, we’re Corporation Without Share Capital (Not-for-Profit), which matches “The Board”. We opted not to register as a Co-operative (which would more closely match “The Membership”), because the laws  governing Co-operatives are more restrictive, without offering us any useful benefits. But the Co-operative or “Membership” philosophy closely matches our vision for the space, so we borrow heavily from it in our bylaws, policies, and procedures…We are 100% member funded (with all members paying the same level of  dues), which was also very important to our initial membership. Any of the big decisions (like how much dues will be) are subject to a member vote, and all members-in-good-standing get an equal vote.

So, for lack of a better definition, if your space is primarily controlled by your members, it follows the Membership form.  If the members leave most of the decisions and money matters to a subset, it probably follows the Board form.  Landing firmly in one category or another is not necessarily that important, as long as the relationships of each are well understood.  Some Membership spaces may functionally slip back into a Board form, just like Board spaces often migrate into Membership spaces, or use the Board form as a bootstrapping step.

Bootstrapping

David Cake describes how the Artifactory is using the Board Form to bootstrap their way into a Membership Hackerspace:

Our brand new Perth space is a board elected by the membership, and so far while the board has been doing a lot of the work and taking the lead on a lot of the decisions, meetings with the entire members are making most of the major decisions. So I guess we fit into the membership category really, even though the board are making a lot of important decisions in the process of getting us up and running.

Raymond describes how Makers Local 256 used the Board form to bootstrap their effort:

Makers Local 256 is a non-profit 501c3 and would be considered “the membership” based, but I guess started out as “the board” based since the board is the original 10 members (changing soon given new bylaws and elections).

Makers Local 256 followed the critical mass pattern in establishing their hackerspace, with their original 10 members fulfilling the role of the 2+2 model.  Their unique dues model describes how a Board can help build membership in the early stages:

The original 10 pledged a monthly donation that they could afford and we found a space that fit within that budget. We decided that extending this to new membership was a good idea and so we don’t have to turn away someone who might offer a lot but might not have a lot of money.   A monthly pledge doesn’t have to be monetary but does fall under board discretion to ensure that said pledge benefits the space.

Martens has this to add:

Especially when bootstrapping, a board can bring the agility needed to get things off the ground. Especially in the first weeks/months a lot of decisions need to be made, while at the same time the membership is still getting used to each other and the whole idea. Having to discuss all these decisions with the membership at large (apart from the fact that we currently have no actual membership defined as we are still in the process of forming the legal entity) will slow down the process of setting up the space a lot.

Of course, we, as a board, are listening closely to what the potential membership wants, and actively seek the opinion of everyone involved in the space. In any volunteer-driven organization you will see different levels of commitment. In my experience, those that become part of the board have a high level of commitment, and don’t mind pulling in a few extra hours for the greater good.

Advantages

The notable advantages of a Board space are formal organization with less administrative overhead from the participants, as well a greater degree of formal control vested in fewer people.  In most cases where there isn’t a hybrid form with another style of organization, the advantages are remarkably similar to those of a Membershp organization.  Here, I’m looking at advantages of a Board form

  • Anarchy: Board spaces are (generally) official legal structures with explicit expectations and guidelines for operation and more stable bases of operation.
  • Angel: Most Angel arrangements take on some kind of Board form.  As in the case with Collexion, these Angels offer advice and consult with the organization through their board.  The advantages of having a board include greater independence.  In the hybrid form, the advantage of having a board generally involves a defined role for the Angels and the ability to swap or separate Angels if need be.
  • The Owner: Sometimes an Owner space will have a small, informal group of advisers.  However, the purpose of a Board is to have a group of people who make decisions as a group on behalf of the stakeholders.  In this case, the Board is somewhat accountable to its stakeholders whereas Owners may not be as accountable.  Board spaces generally offer greater freedom and flexibility and rarely exercise a kind of  “veto power” that Owners have by default.
  • Membership: Board run organizations tend to mediate disputes and prevent certain routine issues from getting to the Membership level.  Generally, this means more time for members to enjoy their space.

Disadvantages

The notable disadvantages over alternative forms are also similar to the Membership form:

  • Anarchy: Board spaces must periodically file paperwork, support the space through dues, stay on top of other legal requirements and fulfill their stated obligations.  This leaves less time for projects, hanging out, etc.
  • Angel: In the non-Angel form, Board members are often saddled with the heavy burden of coming up with the funds to run the space, and make tough calls on funding issues.
  • The Owner: Instead of having an owner to rely on for collecting and paying the rent, easily making special arrangements, mitigating disagreements among participants and having one “final say” on matters, Board members must come to agreement on certain issues or figure out ways to work around issues.
  • Membership: Ultimately, the Board is responsible for issues and decisions that otherwise might have been made by the membership.  While the Board can occasionally punt, even a routine decision may run afowl of the membership and lead to difficulties.

Another disadvantage cited by Martens is what he describes as an anti-pattern of complacency:

…some members may fall into a consumer-like attitude. Expect the board to do the heavy lifting, and merely consume what the spaces makes available. The board members, by nature, will have a tendency to pick up work that is left undone, because they have a strong drive to ‘make it work’. That might lead to overworked board members, an apathetic membership, and failure of the space. That’s a doom scenario, and normally there will be someone to pull on the emergency brake before this happens. But still, something to be aware of I think.

Conclusion

The Board form is good for Bootstrapping, and depending on the environment, a next best form to the Membership model.  Hackers are generally bad at paperwork and group dynamics, so having a Board to take care of the administrative overhead and mediate disputes can help ensure continuity and sustainability.  It also works well as a hybrid with other forms, or as a means for acting as a firewall between Angels, Owners and Members.  But beware of complacency!

As always, feel free to ask questions on the Hackerspaces Discuss list, or reach out to these spaces directly.

Categories : organization  people  theory

2 comments

  1. A good read for any community organization, really.

    Angie, October 23, 2009
  2. An excellent division of forms well presented. Great article!

    Money and organization affect the character of a HackerSpace, not always negatively. Organizing money and people create growth among the volunteers pressed into organizing. Crazy, culture changing ideas come from the need to harness the efforts of volunteers and attention to value comes from the need to optimize money. The dominate form also affects what comes out of the hacker space.

    For contrast, NoiseBridge’s anarchy tends towards outputs of cool art while HackerDojo’s Board pushes evangelizing expansion of the hacker culture. TechShop, an Owner system, pushes development of individual livelihoods over community assets. I would expect member based organizations to bias strongly towards member services and classes. Mixing forms, common in almost all spaces, mitigates the bias.

    There is a large ecosystem and space for all these forms. Power would be discovering how to emphasize the mix of forms for particular results.

    Charles Merriam, December 14, 2009