The working class in the United States has not been quiescent during the ongoing Covid-19 pandemic. The field of social struggle has included strikes, walkouts, sickouts, fights against evictions, grassroots-led union drives, and a host of other labor actions (including the rebellions this past summer).1 Most encouraging have been the direct confrontations with non-union employers and battles waged outside established syndical structures, like those that have already occurred among farmworkers, meatpackers, warehouse pickers, gig workers, municipal employees, education workers, and grocery workers, as well as at countless other worksites. While self-activity and close bonds of comradeship between co-workers have and will be the vital factors in these conflicts, there is always a place for networks of communication and defined strategic courses that show new paths forward. Militants are constantly gathering knowledge and insights to share with other workers beginning to mobilize. The 2019-2020 wildcat strike for a cost-of-living-adjustment (COLA) at UC-Santa Cruz was in many ways a precursor to the types of organizing that have taken root among labor activists since last March. In this article, Jane Komori, a participant and organizer in the COLA strike, examines the ins and outs of running a strike fund (especially difficult when the action is taken while under contract), an often overlooked yet essential task in strike logistics.
In the early months of 2020 it became clear that the University of California, Santa Cruz graduate student worker wildcat strike for a cost of living adjustment (COLA) was part of a wave of strikes erupting across the country. In our first days on strike we were in touch with organizers from the 2018 West Virginia Teachers’ Strike, the 2019 LA Teacher’s Strike, and CUNY Struggle, seeking advice and encouragement. But after only a few weeks other graduate student workers, themselves demanding COLAs or trying to unionize began reaching out to us for support. When wildcat strikes were launched at other University of California campuses including Santa Barbara, San Diego, Davis, and Berkeley in February and March, I began to get calls about how we started our Gofundme fundraiser and how we were managing our strike fund. I received even more of these questions as workers from a host of industries began to organize in the face of unprecedented unemployment with the onset of the COVID-19 pandemic. I spoke to baristas in New York organizing a fund to replace lost wages and strippers in LA fundraising for mutual aid. As our fund grew and workers all around us began their own strikes, we used our fund to support striking workers in City Waste Union, striking graduate student workers at Columbia, and most recently to workers fighting for a union at Bookshop Santa Cruz, among others. I often included notes about how grateful I was to the fellow fund organizers, because handling our own strike fund has been an ongoing, ever-developing challenge, not to mention a critical dimension of the COLA struggle as a whole.
Part of the difficulty was, and continues to be, a lack of resources and advice for workers about how to start and manage their own strike fund or fund for labor organizing or mutual aid.2 Particularly challenging was the fact that a strike fund for a wildcat strike is a strange beast, in the eyes of the IRS and every accountant and tax attorney I have talked to. It also presents unique challenges to workers, who have a lot of other things to do when organizing a labor action, and who, like me, might have no experience handling large sums of money or dealing with the vagaries of tax code. For the UCSC wildcat, on top of figuring out the technicalities of accounting, it has meant coming up with a whole system for prioritizing, allocating, and dispersing funds. As the de facto treasurer for the movement for the last year and the foreseeable future, I still have many questions and am often doubtful about how to proceed. But I have also learned a lot about matters I did not realize could have any bearing on labor organizing. The following is therefore meant to be a practical, albeit imperfect and incomplete, account for anyone considering starting a fund like ours. It is also meant to offer some insight into how a strike fund, especially where you would not usually find one, (as with a wildcat strike or other organization of workers not represented by a union with deep pockets) can shape the form and capacity of labor actions. While there are a number of critical ways to narrate the development and conclusion of the UCSC wildcat strike, I have in no small part come to understand the COLA struggle through our strike fund.
1. Set your fundraiser up yourself and consider the language you use to describe it carefully.
A really generous and thoughtful comrade at another university started our Gofundme for us when we first went public with our wildcat grading strike on social media and some smaller news outlets in December of 2019. I am so grateful that she did, because it started getting attention right away, and I do not know when it would have occurred to us to create one ourselves. I would however advise any other group to have the person who is going to act as treasurer start the fundraiser. Gofundme restricts access to certain functions to the creator of the fundraiser, and it is easiest if whoever is overseeing the fund can add other users, manage withdrawals, post updates, raise the fundraising goal, and most importantly, carefully write up the description of the fundraiser.
Our comrade named our fundraiser “Support Fund for Striking Workers at UCSC!” This is descriptive and correct – for the most part. While we used the bulk of our strike fund to replace lost wages, we used about a third of it feeding and providing first aid, toilets, sunscreen, and picket signs to thousands of picketers for an entire month; providing bail money and support with legal fees and tickets; covering medical co-pays for those injured on the picket line; and donating money to other workers, student groups, and community organizations on our campus and across the country. Not everyone will need to do all this, but when creating your Gofundme, try and think expansively and carefully about what you might do with your fund. How you define it at the outset will determine, in part, how you administer it and how you report it to the IRS about it later.
2. Consider scale.
The nature of grassroots labor organizing can mean that the scale of actions and their outcomes are difficult to predict. Our strike certainly was – we had no idea that we would raise nearly $300,000, or that we would need it when eighty strikers were fired. Nonetheless, I think considering the size of the action (how many workers are involved?), the potential risks (do you think you are going to get pay docked? For a day or a week?), and other costs involved (how much is the pizza that you like to have at your meetings, and are you going to be having a lot more of those soon?), is something that should be done ahead, even if you end up being totally off the mark. If your answers to the questions above indicate that you only need to fundraise $1000, then you probably do not need to read the rest of this guide, and Venmo is a great tool for you! If it is more, this will help you anticipate the kind of infrastructure you’ll need to build. It might also help you think about a timeline for fundraising and how to set fundraising goals with your Gofundme. (I am not a fundraiser, and we never had a set fundraising goal or a plan for reaching it. When we had considerable media attention, we bumped the goal on our Gofundme page up by $10,000 every time we got close to meeting our previous goal. Frequently linking to the Gofundme page on social media and in press coverage was helpful.)
3. Start thinking about banking, accounting, and taxes right away.
There are a lot of mixed messages about whether or not Gofundme will issue tax forms to beneficiaries of fundraisers and whether or not money paid by Gofundme’s third-party payment processor, WePay, is taxable income (the tax question here is, is the money received “personal gifts” or taxable income?). This is a really crucial consideration for scale: how much is the beneficiary going to receive from the fundraiser, and how much are they going to pay others from it? While Gofundme states on their (bewilderingly limited) taxation information page that they will not issue tax forms, this does not match up with the advice of the accountants and tax attorneys I have talked to. Plenty of sources suggest that even if Gofundme does not issue tax forms, WePay will issue a form 1099-K to any “payee who receives more than $20,000 and has more than 200 transactions during a calendar year. A copy of this form will also be sent to the IRS.”
Whatever amount you are planning to raise, open a separate bank account for WePay direct deposits, even if it is still the treasurer/beneficiary’s personal account, to help keep things organized. Gofundme and WePay will not hold donations in the fundraiser for more than 30 days, so you need to be prepared to do this quickly once you have launched the fundraiser. And, if you are planning to raise $20,000 or more, consider getting in touch with an accountant right off the bat about what you are doing. After having an accountant with experience working with nonprofits salvage some information from my chaotic Google Sheets ledger, we are now using QuickBooks Online. We have also been advised to save all physical receipts for purchases made from the fund for ten years, which we did not start doing soon enough. In short, to make sure that you can convince the IRS that this is not income that your beneficiary can be taxed on, you’ll need to have good records.
4. Consider a fiscal sponsor or another structure to hold and administer the fund
Or, to make things even more complicated (but ultimately to make things less complicated), consider having some entity other than your beleaguered treasurer hold the fund in trust and administer it. This will help you ensure that the fund remains tax-exempt and relieve you of some of the burden of handling the fund by trusting it to an organization that already has systems in place to manage it. This should be a non-profit organization with tax-exempt status. But, this is also where things can get tricky, and where I am still not sure what the best path to take is.
A typical fiscal sponsor is a charitable organization (501c3) that will hold and distribute the fund for a cut of the funds raised, usually around 15%. This amount is to cover their own staffing, accounting, and other associated costs, but here scale is important again: if you think you’ll raise $100,000, then spending $15,000 to not worry about money and get back to the organizing work you want to be doing seems pretty reasonable. But if you think it is realistic that your fund will be larger than that, the amount spent on the sponsor (however wonderful a sponsoring organization you find) starts to look more significant and other options become more appealing. It is notable that a comrade of the West Virginia strikers used their non-profit organization to administer their strike fund for free, which sounds like the best possible arrangement, if a rare one.
In the second week of our picket, our strike fund swelled to $100,000, and I started to panic. I had never contemplated having that much money in my bank account, and I had no idea how I could explain this all as personal gifts to the IRS when I got my 1099-K, even if, as an accountant initially advised me, I was only a “beneficiary” who aggregated and redistributed further “gifts” (for smaller funds, those are your keywords for your tax filing if you do get a 1099-K that you need to report). I also desperately wanted a better structure to handle the fund in a transparent and collective way. So, we formed an ad hoc strike fund committee (another thing I wish we had from the start) to oversee decisions concerning the fund, communicate them to the rest of the strikers, and to figure out how to get the money out of my personal bank account.
When it became clear that our strike fund would reach $200,000, and then nearly $300,000, the $45,000-$60,000 we would spend on a fiscal sponsor pushed us to consider other options. Further, potential fiscal sponsors we talked to had good questions and concerns of their own. For some, our fundraiser dwarfed their annual operating budget, so they did not really have the structure necessary to handle it either, and for others, they were not sure that a strike fund, typically held by a labor organization (501c5) could be held by a charitable organization (501c3) without jeopardizing their tax-exempt status. It seemed at the time that we could actually more cheaply establish our own non-profit organization. With filing fees ringing in at around $20,000, we could have rescripted our fund as a charitable fund, that is, one for a population in need, like poor graduate students. This would have created a foundation, or something of the like, rather than a strike fund (which is for a specific group of workers engaged in a labor action, and not considered a charitable fund for tax purposes). Or, we could seek out a sympathetic labor organization to hold our fund. Of course, our union, UAW 2865, would not do it because we were on a wildcat strike and the university had already filed an Unfair Labor Practice charge with the Public Employee Relations Board against them for not doing enough to stop our strike. Local labor councils and other unions were also unwilling to support us – a lot of them just never wrote me back or returned my calls. And so, in wondering where we might find a labor organization that would actually want a wildcat strike fund, we finally arrived at our structure: we established an industrial union branch for education workers with the Industrial Workers of the World.
The process of assembling and chartering a branch, and then opening a branch bank account and establishing dispersal guidelines for it, took about two months, which is around the same as the timeframe for establishing a new nonprofit organization, but it cost next to nothing, which was a huge perk. We spoke with IWW headquarters, assembled the requisite ten members in our industry (education), and drafted and ratified bylaws, which provide for a graduate student worker committee with sole discretion over the spending of the strike fund. We wrote the first checks for lost wages from the Santa Cruz Education Workers Local Industrial Union Branch 620’s bank account in May. (We used Chase Bank because they had a business account with lots of benefits for the amount we were opening an account with. There are also banks that offer accounts specifically for non-profit organizations – it might be worth spending some time comparing banks and accounts when you open one.) We now have monthly meetings where we vote on strike fund spending as well as other business. It is worth noting that we were not trying to get people to rescind their union membership or even to get everyone dual-carding by forming a branch of the IWW (this has been bandied around as an idea by student-worker organizers in the UC for years when our union has disappointed us, but has never caught on). As per the IWW’s constitution and industrial labor organizing ethos, any education worker, including students, in Santa Cruz County can join our branch by taking out a membership, and my hope is that eventually our branch will serve as a useful structure for other education workers in the region, too. It does take work to keep up with reporting and organizing for the branch – we have had to collect W9 forms for all recipients, and we will have to issue them all 1099 forms for the 2020 tax year. We will pay our accountant roughly $10,000 over the next two tax seasons to help issue these forms and file our taxes.
5. Set up priorities for how your strike fund will be distributed.
In late February 2020, eighty strikers were fired from their spring quarter (April to June) teaching appointments. Before they missed their first paychecks, we had to establish a system for distributing funds to them. Initially, we were able to have a needs-based system for distribution. People reported how much they would need from the fund, with a lot of people reporting modest amounts and drawing on faculty and department support, other jobs, savings, or family support to reduce the use of the strike fund, so that everyone got what they asked for. We spent roughly $140,000 supporting around forty people for three months, with the rest finding fellowships, research jobs, or other support.
We realized later that our needs-based model for supporting fired strikers is actually not how a conventional strike fund held by a 501c5 runs, and this became an important problem in terms of taxation later on. Usually, a union pays a set wage to workers spending days on a picket line or replaces precisely the amount of wages lost. I tried to debate the difference between straightforward wage replacement and our needs-based model with our accountants when I later learned that income from a strike fund of over $600 is subject to tax as self-employment earnings. This means an additional 15.3% of taxes paid on the income, on top of the federal and state taxes paid for the recipient’s specific income tax bracket. In other words, if we had run our strike fund through a non-profit organization, defined and termed it differently, or taken other steps to avoid its tax classification as union-paid wage replacement – because it really was not straightforward wage replacement, after all – we might have avoided the heavy taxation of strike fund recipients. I wish we had calculated for this from the outset, because in many cases it will mean that the IRS nets roughly 25% of our strike fund, which might all have been considered tax-exempt if we had been able to define it as personal gifts or support funds from a charitable organization. This is a crucial way to consider the question of an organizational structure to hold the fund and your funding priorities: you’ll likely end up losing a big chunk of your money to taxes, so what structure and priorities will best help you minimize that loss?
Nevertheless, after covering lost wages and other needs for spring, we had roughly $75,000 left in our fund. After holding aside $10,000 for accounting, $5000 to donate to other wildcat strikes taking off all around us, and $5000 for an operating budget, we decided to use the remainder towards summer funding, as 41 strikers were not reinstated until August, and so lost their summer employment as well. It goes without saying that alternative employment options for many of these strikers also evaporated. With a more limited fund for this round, we had to actually set up priorities for allocating funds to strikers. We were still aiming for a needs-based system, yet there the concern lingered that we would not be able to fully meet everyone’s needs. The priorities we settled on for providing funds for summer were basically:
- Those at risk of deportation
- Those facing housing or food insecurity
- Parents and caregivers
- Those with less support from their departments
- Those without other jobs or familial sources of income
We created a Google Form to circulate with questions like “Have you already received support from the strike fund?” “Do you have other financial support for the summer?” “What is the minimum amount you can request from the strike fund for summer support?” and “What is the maximum amount you would request from the strike fund for summer support?” There were also questions about what people were making requests for (rent, childcare, debt, etc). Again, we were fortunate to be able to fill most of the requests to nearly their entirety. Having clear priorities that we circulated in advance helped us to make decisions about how to stretch the remainder of the fund in a transparent and fair way.
6. Be prepared for the long haul
Even with our strike fund exhausted, the Santa Cruz Education Workers Local IUB 620 will continue to remain active for a long time. I am still wrangling receipts, filing monthly reports with IWW GHQ, writing checks, collecting W9s, and communicating with our accountant about how to manage all this. And I’ll be doing this well into 2022, and possibly longer.
Our strike fund shaped the capacity of our movement and the form of our labor action. At crucial moments workers made decisions about their involvement in the strike based on the availability of the strike fund. For instance, when our number of strikers in the winter quarter had dwindled after the mass firing, and when workers who had not previously participated were considering withholding their winter grades, I had many inquiries about whether they too would be covered by the fund. I noticed myself feeling an acute responsibility to express, again and again, that the fund was limited, and that people should not count on it. At the same time, it was not how I thought strikers should be calculating strategy and risk; indeed, it was a very different calculation than the one that had moved us to strike in the first place, before the idea of a strike fund had occurred to any of us. Rather than, “Will there be enough money in the strike fund for me?” being the question that preceded strategic decisions, “Will withholding my grades at this moment help us win a COLA?” should always have been the guiding question. But granular conversations about how much money was in the strike fund, how quickly it was growing, and how rapidly it was being spent happened at every general assembly, organizing meeting, and in nearly every conversation I had on the picket line, especially when people were feeling vulnerable in committing to actions. It indexed to me just how difficult it was for most workers to take collective action without also calculating it through personal considerations of risk.
We also had plenty of internal conflict about who had control over the fund and how it was being spent, particularly at the height of our picket line when thousands of undergraduate students and allies from the surrounding community were joining us every day. There was considerable frustration about how quickly we could move money, and to whom. As the fund grew and as new groups of students and workers organized themselves at our picket line with related but unique agendas, different demands on the fund and conflicting priorities for it often sparked larger conflicts about what the money should do for students and workers, and what it could mean for our movement. From my view, we never really resolved those conflicts, because as much as people expressed legitimate frustration about the strike fund, very few people (there were a few, and I continue to be very grateful to them) were interested in being on a committee that would devise spending plans, let alone in researching the details of a viable accounting system.
The problem of a general unwillingness to become involved in the minutia of accounting among organizers of a militant labor movement is related to a larger problem to do with funding and wildcat strikes. The problem is essentially the one I sketched out in parts 4 and 5 of this guide: grassroots labor movements that receive and redistribute more than roughly $20,000 in a calendar year are pressed into one of two structures. These are non-profits (501c3) and labor organizations (501c5), which are both structures ill suited to the ad hoc, fluid nature of wildcat and other militant, spontaneous labor movements. And the fact that these structures are so difficult for wildcat strikers to navigate is by design. There is considerable literature on the repressive function of non-profit organizations, which have grown exponentially in number since the 1960s. Dylan Rodriguez and Ruth Wilson Gilmore both point out how the “non-profit industrial complex” is a soft power twin of the prison industrial complex. Rodriguez places “restrictive tax laws on community-based organizations” on a spectrum with “arbitrary enforcement of repressive laws banning certain forms of public congregation” to emphasize the link between the increasing bureaucratization and professionalization of political movements and more spectacular forms of repression and state violence.3 Gilmore points out that the enormous transfer of wealth to the baby boomer generation has allowed for new fundraising schemes, such as crowdfunding platforms like Gofundme, and that these have
Encouraged grassroots social justice organizations that otherwise might have continued their work below the Internal Revenue Service and formal-funding radar to incorporate as non-profits to make what they have consistently hoped to be great leaps forward in social justice. In other cases, unincorporated grassroots groups receiving money under the shelter of existing non-profits have been compelled to formalize their status because auditors have decided that the non-profits who sponsor them have strayed outside the limits defined by their mission statements.4
This is almost a perfect description of the problem for the administration of our crowdsourced wildcat strike fund: in order to continue to collect the money we came quickly to need, we had to establish an organization where we never intended or wanted to have one, especially when it became clear that working with a fiscal sponsor to avoid those circumstances would be financially and legally untenable for both parties. But in the case of a Gofundme strike fund, we have two further considerations: first, the practical and political difference between a non-profit and a labor organization, and second, the understudied but rapidly emerging prevalence of Gofundme fundraisers for labor movements and workers at large.
Erica Kohl-Arenas’ analysis of the changes in the United Farm Workers’ position on outside funding is enlightening. Kohl-Arenas describes how in its early iterations, the National Farm Workers Association drew on Mexican traditions of mutualistas, not unlike the mutual-aid networks and organizations that have bloomed across the United States during the COVID-19 pandemic and the George Floyd rebellions. Even after embracing a labor union structure and forming the United Farm Workers alongside the Delano Manongs in 1965, Cesar Chavez, Dolores Huerta, and other organizers maintained a heterogeneous set of means by which they fought for self-determination for their communities, including considerable “self-help” operations. Nonetheless, Kohl-Arenas charts a pivot from a refusal to accept outside funding and a commitment to a member-funded organization to the incorporation of non-profit organizations to carry out the movement’s service work – organizations that could capture the philanthropic dollars of the Ford Foundation and other formidable funders who eagerly sought to exert influence in civil rights movements and other militant political organizations of the day. In conclusion, Kohl-Arenas writes:
Working under a professionalized and privately-funded model, the staff of the new non-profits became preoccupied with fund development and administration. Originally inspired by the alignment between civil rights and the struggle for farmworker justice but unwilling to address change in the economic sphere, funders set up untenable institutional structures. Consumed with developing his new organizations, Chavez ultimately accepted a translation of farmworker institutions that required philanthropic charity – but not a movement in struggle for self-determination and collective ownership among workers.5
The inability for a robust movement-oriented union like the UFW to maintain a multiplicity of organizing structures, strategies, and principles in the face of taxation and funding related pressures continues to be an issue for militant political movements today. But, contemporary labor movements are not necessarily contending with the restrictive reporting requirements of the Ford Foundation. Instead, they are navigating the vagaries of crowdfunding and the proliferation of fundraisers hosted on Gofundme.
The use of Gofundme to raise funds to support labor movements is not entirely new – much like for the West Virginia Teachers’ Strike, the 2019 LA Teachers’ Strike was supported by fundraisers to feed them at labor actions, and the platform has seen traffic from labor organizers and unions as well as non-profits since it launched in 2010. However, in contrast to other crowdfunding platforms like Indiegogo and Kickstarter, which are targeted at entrepreneurs and consumers of their prospective products, a full third of fundraisers on the platform are for individual medical expenses, while others raise funds for suffering animals, churches, honeymoons, voluntourism travel, and so on. What is new is the proliferation of fundraisers initiated for and by workers, unionized, self-organized, or otherwise, with the onset of the COVID-19 pandemic. The boom in these fundraisers (with 22,000 of them already drawing in $40 million by March 20, 2020), has spurred Gofundme to introduce a new category of fundraisers (“Fundraising for Coronavirus Relief”) which it promoted heavily on its home page in 2020. Aside from these fundraisers, often launched by the bosses of laid-off workers, being radically insufficient stopgaps for social and economic crises, their proliferation makes them increasingly competitive, pulling in smaller and smaller amounts for only the wealthiest and most well-connected. And, if a few lucky groups of workers do rake in much-needed funds on Gofundme, how to handle them is preeminently confusing. What should be non-taxable, personal gifts from some workers to others quickly forces a host of questions about organizational structure that make a profound difference not only for how much of these gifts the workers get to keep for themselves, but also for if and how their militant actions might be reshaped and disciplined by the organizational structures that they are forced into.
Some weeks after our strike concluded, I realized that the total amount that our fundraiser pulled in ($291,900, or $281,614.80 after WePay fees) was just a few thousand dollars shy of the monumental $300,000 that UCSC’s administration spent per day to police our picket line. While the UC’s $300,000 budget bussed in police from UC San Francisco, Berkeley, and Irvine, as well as California Highway Patrol and the National Guard, equipped them with military surveillance equipment, sheltered them in local hotels, fed them, and paid their overtime wages for a single day, our $281,614.80 fed thousands of picketers several meals a day for four weeks, and housed, fed, and often paid some tuition for, roughly forty strikers for about six months. The comparison of these numbers has had, of course, a special resonance since the George Floyd rebellions.
All of these considerations have caused me to reflect on what we might have done differently with our fund, not only in terms of the practicalities of its administration, but in terms of how we spent and shared it. It is a meager sum when held up against the UC Police Department budget, but still an amount that you can do a lot with. It has also pushed many of us at UCSC to think differently and more creatively about funding moving forward. Some workers created a system to redistribute the ten percent raise that we did win during our strike so that those who are benefitting now from the strike can share it. By directly exchanging funds between ourselves, we might also dodge the constrictions of the IRS this time around. And, by continuing to take account of the COLA movement, we might figure out how to keep fighting, with or without funding.
|↑1||For just a few central resources on these extensive efforts, see sites and newsletters like The Payday Report, Strikewave, and Labor Notes.|
|↑2||Since drafting this article, Michael Haber has published a useful document, “Legal Issues in Mutual Aid Operations: A Preliminary Guide,” which covers financial issues and considerations for mutual aid funds and funds raised through crowdfunding platforms. For those administering mutual aid funds, Haber’s guide might be more useful than this one, and is a useful resource for anyone receiving any funds from Gofundme.|
|↑3||Dylan Rodriguez, “The Political Logic of the Non-Profit Industrial Complex,” in The Revolution Will Not Be Funded: Beyond the Non-Profit Industrial Complex, ed. INCITE! Women of Color Against Violence (Durham: Duke University Press, 2017), 26.|
|↑4||Ruth Wilson Gilmore, “In the Shadow of the Shadow State,” in The Revolution Will Not Be Funded: Beyond the Non-Profit Industrial Complex, 46-47.|
|↑5||See Erica Kohl-Arenas, “Can Social Movements Tackle Inequality With Foundation Funding? The Case of the Farmworkers’ Movement,” Histphil, August 28, 2015.|