In the world of so-called civic tech -- the field based on the idea that networked technologies, especially the Internet, can help engage people in positive social change -- there has long been a debate over exactly what business model is the most sustainable. Nonprofit? For-profit? Something else? Or more simply put: If the Internet is going to save the world, who's going to pay for it?
The idea that the for-profit company is the way to go has just gotten the backing of an eye-catching group of investors, many from the tech world. Change.org, a petition site that has acted as an online rallying point around the public's ideas for how the world could work a lot better, has just raised $25 million in its latest, Series C, round of fundraising. And that cash is coming out of the pockets of everyone from Virgin's Richard Branson to actor-investor Ashton Kutcher and Guy Oseary's A-Grade Investments, from Arianna Huffington to tech incubator Y Combinator president Sam Altman, from Twitter co-founder Ev Williams to LinkedIn co-founder Reid Hoffman.
Not to mention LinkedIn chief executive Jeff Weiner, Twitter executive and former State Department official Katie Stanton, Yahoo co-founder Jerry Yang, the Omidyar Network led by the founder of eBay and his wife, and Code.org co-founders Ali and Hadi Partovi. Oh yeah, and Bill Gates.
"This investment is a recognition that there's an opportunity to democratize democracy," says Change.org founder and chief executive Ben Rattray, "in the same way that we've democratized everything from media and communications to commerce to, increasingly, transportation," with everything from blogging to Uber. "It's about lowering the barriers to entry in industries that traditionally are difficult to participate in, and the opportunity" in the civic space, that is, "is larger than any of us thought."
Indeed, that investor list is a collection unique in shape and scale in the civic tech realm. Brigade, the still-in-the-works civic-centered social network launched by former Facebook president Sean Parker in August, opened with a funding round of $9 million, with contributions from Parker, noted venture capitalist Ron Conway, Salesforce chief executive Marc Benioff and others.
Launching in 2007, Change.org has run through several business models on its way to stability. For a time, it tried out life as a issues-driven blogging platform where readers were encouraged to make online donations to aligned advocacy groups. It swapped that plan in 2010 for something close to its current model. The site today has more than 83 million users in just about every country, the company says. Many of the petitions started on the site are small-bore -- a bid to create a local park or tweak a package's branding. But others have gotten enough attention to shift a major news story: a petition by the family of Michael Brown, the 18-year-old shot to death by a police officer in Missouri, calls for Congress to approve funding for equipping cops with body cameras. In about a week, that petition has racked up more than 63,000 signatures.
Change.org counts among its successes petitions for getting humanitarian relief for the family of a U.S. military interpreter in Afghanistan, convincing Old Navy to fairly price its plus-sized pants, and triggering an investigation into the death of a boy with special needs in Oklahoma.
This latest round of funding, says Jake Brewer, Change.org's managing director of external affairs, is part of a bid to make the company truly global. To that end, the company was eager to tap the expertise of funders who have grown companies with massive reach, rather than oft-plodding donors from the philanthropic world. "We want to empower billions of people," says Brewer, "and the nonprofit model isn't the way to have global impact on the scale and speed of Twitter and Facebook."
Change.org says that it hand-picked would-be funders who would support the company's unique way of doing business. Change.org is a certified B Corporation, which carries with it self-imposed requirements for social accountability and transparency. (The craft marketplace Etsy and the crowd-funding platform Kickstarter are also B Corps.) More than that, while fundraising for a seven-year-old successful tech company would often focus on exploding its growth in the hopes of turning it public, Rattray has sworn off the idea of an IPO.
Says Brewer: "Our mission isn't to create more revenue. That's not why we're in business. We're a business so that we can create impact." Headquartered in San Francisco, Change.org has about 22o employees distributed across offices in Washington, New York, London, Madrid, Berlin, Rome, Paris, New Delhi, Tokyo and elsewhere. "But in order to hire engineers to create a platform in 12 languages that can support 83 million people," says Brewer, "we have to have a sustainable income for that."
Change.org -- despite, or perhaps because of, its success -- has come in for criticism, especially by those who work in the field of politically progressive online technology, where the company has found many of its employees over the years. Some object to what appears on the site -- lately, for example, the company was slammed for hosting a petition called "Keep the Redskins' Name." More than that, however, Change.org has drawn ire for the way it profits from the collection of e-mail addresses, helping to land it the epithet of "Change.biz" among some.
Brewer rejects both arguments. "If you want to be a platform that empowers people to create change, you have to give them power. And that includes power to create change to do things you might not always want," he says. And, "we never give your e-mail to anybody unless you tell us to."
According to the company, the vast majority of its revenue comes from what Brewer calls "an action-based advertising model based on click-per-action." Or, in plainer speak: Sign an animal rights petition on Change.org, and the site suggests you might like to sign a sponsored petition put out by the World Wildlife Federation. Change.org gets paid if you click a box saying that you'd also like to join WWF.
Change.org's funding round isn't particularly striking in the broader tech world. Consider that what the company just raised is about one-50th what the ride-on-demand company Uber expects to raise in its latest funding round. But it does signal new heights in the civic tech space. The Govtech Fund, for example, made news earlier this fall when it launched with the focus of backing companies aimed at improving government IT. The full scope of that fund was $21 million, or about $4 million less than what Change.org alone has just put in its own coffers.
And much of that value comes, no doubt, from the fact that Change.org sees itself as a different kind of civic tech outfit and that some high-profile investors have signed off on the concept. Says Brewer, "The self-righteousness of saying that there's no choice but for civic tech to be either nonprofit or just for-profit" -- that is, one centered on generating profits, not social change -- "is, to me, disrespectful to democracy."