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EDITOR’S NOTE: This sponsored content is paid for by the Center for Cultural Innovation (CCI), as part of its AmbitioUS initiative. This series explores how alternative economic models can empower artists and culture bearers, with an eye toward financial freedom and long-term sustainability. You can find other stories in this series here.
Evelyne Kanakis had been working in design innovation in the financial industry for more than a decade when she began to notice that the workforce was rapidly evolving—but banks were not evolving to keep up.
“There was a massive segment called the gig economy that banks and other financial services weren’t catering to,” Kanakis says. “[At my job] I was creating tools like some of the first Venmo-style experiences for banks, but they were not suited for freelancers.”
As she reached out and talked to freelancers, she realized the same pain points were coming up again and again — namely problems around getting paid and managing finances. Many people she spoke to were artists who were frustrated by how their creative time was diminished by navigating taxes and untangling complicated finances.
She developed MOXI in response to those concerns. MOXI is a financial services app that helps freelancers manage their finances and request payments. It’s designed for people who want to focus on their work instead of the drudgery of finances. An early version of MOXI launched last year. In its current phase of equity crowdfunding, freelancers can become an owner in the business with investments starting at $100.
MOXI is one of a number of start-ups to serve the growing field of freelancers. The rise of platforms for freelancers is not a surprise. While freelancing has been on a drastic rise since the turn of the century, the COVID-19 pandemic has only accelerated the trend. A September 2020 survey from Upwork found that 36 percent of Americans freelanced amid the COVID-19 pandemic, which translates to an increase of 2 million freelancers since 2019. Of the 12 percent of the American workforce that began freelancing during the pandemic for the first time, nearly half can see themselves freelancing long-term.
While the survey found that three-fourths of freelancers have the potential to match or increase their earnings from a salaried position, that’s contingent on them being paid in full and on time for their work. In 2017, New York became the first city to pass a law specifically to help freelancers recover stolen wages, but legislation of this kind remains rare. Without an HR department to navigate grievances, or the labor protections that full-time employment can provide, freelancers are typically on their own when chasing down missing or delayed payments.
“Some of the biggest issues freelancers face have to do around their income stability,” says Ajoke Williams, program manager for the U.S. Federation of Worker Cooperatives (USFWC), a worker-owned grassroots membership organization for worker cooperatives. “Freelancers are constantly juggling jobs, usually either W2 or 1099 contracts. Being paid on time can be a big issue, so a lot of people develop coping mechanisms or have a series of contingency plans.”
The USFWC is hoping to address that challenge by partnering with Smart, a 23-year-old cooperation of more than 35,000 freelancers across Europe, to develop a freelance worker cooperative platform in the U.S. that will help workers get paid in full and on time. Smart has nine member countries so far and offers administrative support and worker benefits — including healthcare and access to pension funds — by “converting” freelancers to employees for the duration of their projects. Additional services, such as invoicing tools, legal advice, co-working spaces, professional development and training, and a professional network have emerged as the organization has grown. At the core of their services is guaranteed payment. Once a member signs a contract with a client, the cooperative will ensure that worker gets paid once they complete the work.
The American version, dubbed Guilded, rolled out for artist freelancers in Maryland, Washington, D.C., and Virginia last summer. Freelancers anywhere in the U.S. are welcome to join, but only workers in those three places have access to the full suite of Guilded services. (Invoicing services are available to all members.). So far about 20 members have joined. Guilded receives a small overhead fee from clients for each contract, and in return, members are guaranteed to get payment within a week of completing their services. If the employer pays late, Guilded fronts the money to the worker and, if needed, follows up with the employer to secure the payment. Eventually, USFWC plans to have lawyers on retainer in each state to help with this effort as needed and to ensure contracts members sign with their clients are air-tight.
Ajoke Williams, program manager for the U.S. Federation of Worker Cooperatives
Guilded members also receive healthcare access through direct primary care clinics — a top concern for many American freelancers — and help with tax prep and writing contracts, access to a professional network, and more. While Guilded initially focused its membership recruiting on freelancers who work in the arts — largely because their work cuts across many sectors and they can be particularly vulnerable to economic downturns — Williams says they’re open to all freelancers.
“Freelancers are going to be the new worker segment regardless of what field they’re in,” she says. “But they are left out to dry by both the private and public sectors … the state and federal laws don’t allow them to organize and unionize and a lot of worker protections are specifically just for employees.”
Notably, both MOXI and Guilded cater to a certain type of freelancer—professionals who get paid online. According to the Upwork survey, only about half of freelancers are “high-skilled,” providing services such as computer programing or consulting. Williams acknowledges the need to support gig workers who don’t have the luxury of working under contracts with legal protection; this segment includes many undocumented workers.
“I think the 21st century kind of shifted the meaning of freelancer, and now we very much associate freelance with app-based freelancers [such as those using Uber or UpWork] and ignore that it existed before with seasonal workers, temp workers and more,” Williams said. The main obstacle to Guilded serving that population, Williams says, is that they don’t deal in cash payments. Members must have a gig that is codified in a contract and that will result in a digital or check payment.
Both platforms, however, also give freelancers who do qualify access to some of the things they lack the most—more financial security and community.
“These safety nets should be the norm,” Williams said. “They shouldn’t be exceptional.”
This post was originally published on Next City.
