The Business of Change: Omidyar’s $15 Million Investment

Change.org is in the business of distributed citizen politics, and business is good.

News broke today that Change.org has raised $15 million in outside funding, mostly from Pierre Omidyar.   From Liz Gannes, who broke the news:

Omidyar Network is taking a minority and non-controlling stake with the explicit disavowal of a future payday from a sale or IPO, two things Change.org has promised it will never do. […]

Though Change.org may sound like a nonprofit, it is actually a for-profit, mission-driven company that is certified as a B corporation.

Omidyar’s investment here isn’t a normal form of venture capital.  It is premised on the explicit promise that there will be no big payday.  But it also isn’t quite philanthropy, like Omidyar conducts through the Omidyar Network.  It’s a low payoff investment, but an investment nonetheless.

That’s part of what makes Change.org such a fascinating model.  It’s nonprofit-like, but avoids some of the harsh limitations facing nonprofits*.  Big donations to nonprofits are “major gifts.”  Donations to Change.org are “investments.”

I’ve offered my share of criticisms of Change.org’s model in the past.  The organization decided last October to adopt an ideologically neutral advertising policy, extending its business to some sketchy characters.  I think that choice carries more risk than reward.  The organization’s core model also is better-equipped for leveraging a thousand small-scale victories than creating a thousand points of pressure for a single large-scale victory.  And the issues I care most about need large-scale victories (congressional legislation, international treaties, etc).

That said, it’s really easy for me to get excited about this news.  The single issue that concerns me most in the field of political advocacy is “how do we pay for movement infrastructure in a time of declining beneficial inefficiencies” (for those reading along at home, this is a theme in chapter 7 of my book).  Change.org employs a ton of talented organizers.  Omidyar’s investment will allow them to hire more, and put better tools in their hands.   The investment will fund tactical experimentation, technological innovation, and the spread of social change infrastructure. And it’s an investment that wouldn’t have otherwise gone to some scrappy nonprofit.  Rather than fighting with nonprofit allies for a bigger slice of the philanthropic pie, Change.org is building new revenue streams that otherwise simply would not exist. That cannot help but be a good thing.

Congratulations to Ben Rattray and his team.  I’m looking forward to seeing where this leads.

 

 

*And no, the horrors of filling out extended IRS questionnaires when applying for C4 status doesn’t count as a harsh limitation.

One thought on “The Business of Change: Omidyar’s $15 Million Investment

  1. Rapid growth poses its own challenges, and we’ll see how Change deals with that. Training a lot of new organizers quickly is a daunting task and one that might lead to loss of quality in campaigns. This is as much a business question as an advocacy one: how do you make sure most clients are working with someone in their 3rd month on the job? But if they overcome these challenges, and turn out trained online organizers, I think progressives will be much the better for it.

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