Exchange Models Done Right: Eight Ways to Empower Without Exploiting

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For most able-bodied adults, paid employment is essential to the long-term path out of poverty. To effect that outcome, many of our network members use a partial-exchange, intermediate-steps model that teaches the skills necessary to succeed in the marketplace. 

Such models are a means — because challenge spurs development; and an end — because the revenue generated by participants’ growing skill level allows the programs to serve more people than donations alone. 

However, while such models are generous and wise, they can appear to exploit the vulnerable. This may be a mere matter of appearance. Or it could be actual exploitation caused by imprudent implementation. In either case, this can lead not only to poor public relations but to civil or criminal prosecution. That’s why it’s important to be familiar with your state’s employment law and consult an attorney to ensure legal compliance. In addition, here are eight approaches that will help you maximize your ministry’s ethical behavior and avoid the appearance of evil.

1)   Volunteering in exchange for services should be at a subsidized rate

A good first step out of perpetual crisis relief is asking people to serve others as volunteers in exchange for things they need. Ideas include earn-it models like boxing food at a food co-op or weeding a community garden in exchange for assistance with an electric bill. 

Whenever you employ this approach, make sure the economic value of what partners receive is greater than the market value of their labor. These models typically cap the amount of partnership possible in a given time frame so they don’t become a form of regular employment.

2)    Revenue generated from clients should go directly to other clients

Any revenue generated by the effort of people in need (e.g., selling produce from the community garden) should be set aside for meeting the needs of those who have generated it. Similarly, client fees, such as the price parents pay for gifts at a Christmas Market, should go straight back to clients (in this case, credit toward buying gifts the following year). 

While that requires more accounting work than just putting all revenue into your general fund, it allows you to document that all partner contributions go directly to helping other partners — and none goes to staff salaries. This prevents exploitation since no amount of client volume will enrich the program operators by a penny. The more that comes in from these sources, the more that flows out to others in need.

3)    For unpaid work training, keep clients out of their area of specialty

In the initial phase of a residential or job training program, it’s common for a trainee to spend a couple of weeks with a coach who teaches them how to be a good employee. It seems only natural that a student with specific work skills be placed in a job where those skills are used.

Yet the caution is: Don’t do it. Yes, from the perspective of personal asset development that’s counterintuitive. However, from a legal and public relations perspective, it’s a wise move. For instance, helping a former construction worker learn new soft skills while working a kitchen internship sends a clear signal he’s in the program for his benefit. If you employ him to do some skilled remodeling, it may appear that he has been coaxed into the program to reduce the nonprofit’s labor cost. It’s also worth noting unpaid internships shouldn’t last more than a few weeks.

4)    Ensure that full-time programming involves more instruction than work

In the scenario above, the work training program should not involve more than 20 hours a week of on-the-job training. The remaining hours should be filled with classroom instruction, time for personal study, spiritual development, etc. In other words, combining work and non-work activities makes it a work training program. If more labor than training is involved, it appears students are there for your benefit versus theirs.

5)    When residential clients find jobs externally, keep pay in their names

In residential life transformation programs, students often seek employment in the community. Yet, a new cash stream for someone addicted to a controlling substance just a few months ago can be counterproductive. But if you keep their earnings (even if they are small and fail to cover legitimate program costs), students can easily feel like indentured servants with no way to leave the program.

An effective solution is to set their earnings aside in their name with limited access to the funds and deductions for agreed-upon program fees. It’s also acceptable to encourage program completion by requiring a fee refundable at graduation. People can then graduate with significant savings commensurate with their employment while in the program. Those who leave early should be entitled to their earnings, less agreed-upon deductions, regardless of the circumstances of their departure.

6)    Communicate expectations in writing

For participants in long-term residential programs, there should be no misunderstanding about work expected and pay received. Provide them with a resident agreement form that outlines terms in plain language — and talk them through it. After they’ve had time to review it and ask questions, they should sign the agreement to acknowledge acceptance of its terms.

7)    Full-scale social enterprises should be model employers

Some ministries establish enterprises designed to employ difficult-to-employ people, either as a stepping stone to independence or a permanent work situation. The employer-employee relationship should be clear with the enterprise providing pay, benefits, and management practices that meet or exceed industry standards. In the best case, employees should also gain transferable professional certifications relevant to their work.

8)    Any debt accrued should be forgivable

An interest-free loan can be a dignified way to help someone through a tough time (Deuteronomy 15:7-8). However, entrapping someone in long-term debt to ministries is unacceptable. All loans should specify generous conditions for forgiveness — but clearly state default may result in consequences (such as the inability to qualify for additional assistance).

Your programs exist to serve people in need and there’s little doubt every one committed to their success sacrifices to make it happen. That said, it’s important all concerned understand development means the person in need receives more than they give. Otherwise, the situation ceases to be charity and becomes a mutually beneficial business transaction. Always be prepared to explain the distinction to those tempted to think your program exploits those in need. Build your programs generously and communicate their design proactively.

And while communicating with skeptics and prospective donors is important, it’s even more important to convey to those you serve that you see their capacity and you’re there to help develop it — not take advantage of them. Most of them have experienced too much of that kind of abuse.

Network Members, be sure to check out the Earn-it MAP and Residential Life Transformation MAP to dig deeper into exchange models. 

Not a network member, visit truecharity.us/join to join today.