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Facebook Causes Does Pretty Well for Itself

BY Nancy Scola | Monday, October 18 2010

Justin Timberlake's -- ehem, excuse me, Sean Parker's Facebook Causes start-up, co-founded with partner Joe Green, has just wrapped a $9 million round of funding, reports Bloomberg News:

Investors in the latest round include venture capital firms New Enterprise Associates and Founders Fund Management LLC, Silicon Valley startup backer Ron Conway and Inc. Chief Executive Officer Marc Benioff.

"I view these guys as the modern social revolutionaries," Benioff said. "If they were born in the '60s, they would be protesting the war. Instead, they're trying to change the world through the Internet."

Parker, of course, is Facebook's former president who also was a driving force behind Napster and Plaxo. And if "The Social Network" is any indication, he's pretty good at getting venture capitalists to open you their wallets for his next great idea. In this cases, it's to use the Facebook platform that Parker helped nurture to "democratiz[e] activism by empowering activists with an arsenal of tools for users of Facebook who want to leverage their network on Facebook to effect positive change." At this point, that means collecting money from Facebook users for various charities and other social organizations. By the company's self-reporting, that tally has reached $27 million for some 27,000 non-profit groups.

I should have more on this in a bit, but the bounty of VC riches enjoyed by Facebook Causes is causing some grumbling. Brian Reich, a well-known progressive digital media guy who has a new book coming out on this stuff, tweeted some negative thoughts about the it. "It annoyed the crap out of me," said the New York-based Reich when I reached him by phone earlier today. The Washington Post caused a stir last April by reporting that the payoff from Causes was minimal-to-nothing for most users of the Facebook widget. There's also the aspect of the cozy relationship between Facebook and Causes; Parker, of course, was instrumental in the Facebook's early years, and Green was Mark Zuckerberg's college roommate. There's also some east coast-west coast tension at play. But Reich takes different issue with Causes. In short, it's too easy. Building a sustainable base for an organization's on-going fundraising and support efforts take time, effort, and nuance, and, argues Reich, Facebook Causes can, when it doesn't pay off for an organization, turn them off from putting in the necessary investment into online organizing. "It's a silver bullet approach," says Reich, "in a world where we know that silver bullets don't work."

The big news here is the level of funding that Causes was able to pull in, but it's worth noting that the plan for Causes has never been simply to treat Facebook as an ATM, even if that's how critics see it at this point in its evolution. The intention is to use fundraising as a gateway drug to deeper, more human activism, said Joe Green when I interviewed him right as Causes was getting off the ground. After the jump, what Green had to say back then about Causes' origin tale.

I pressed Green on whether Facebook Causes wasn't just "hands-off activism -- fundraising and recruiting warm bodies":

This is only the first step. We started with money for a few reasons. First it is real and everyone understands it. For most people 200 letters to Congress or a petition don't really mean anything. But money does. It can make organizations compete among young people, which suddenly gives us power in the process. Suddenly non-profits and campaigns will be able to efficiently raise money from young people. It shifts their attention.

In fact, Green saw the decline in the active-member model of modern non-profits as a shutting out of hard-to-reach supporters. Small dollar donations, then, are a way in the door for those folks:

We both [Green and Parker] have been influenced by the book Bowling Alone by Robert Putnam, a Harvard professor. It documents the decline in social capital of the last half century. During and after World War II the U.S. was rich with voluntary organizations. Non-profits had local chapters and membership meant actual meetings. People were very involved. That has declined. Now non-profits are "check and envelope" organizations. Being a member is sending a check in.

So what happens is that it is very expensive to raise money. They pay about 30% of what they raise to raise more. Direct mail and phone is expensive. And because there is high upfront cost it hampers small organizations. It makes it not worth it to reach out to younger people, so young people are not reached out to because we do not have land lines or stable addresses and we won't give enough to make it worth it when it is so expensive to reach us. On Facebook Causes there is no upfront cost because people spread the message to their friends.

Again, more on this in a bit. This sort of debate fits in under the rubric of the question Malcolm Gladwell now-famously raised recently about whether all of our online activism is meaningless, at the end of the day. One instinct in responding to Gladwell is to say, who cares?, and celebrate the ecosystem of abundance where lots of different people are trying lots of different things. But we know enough about the development of practices and tools to now that, at some point, those things get baked into how we do things. At some point, it becomes the new normal, much like the way that there's a standard now for how you run a non-profit, with only slight variations on the same few models. We're in the formative phase for online organizing, right? So it seems to make sense to pay close attention to what sort of models are going to get a chance to thrive, and which might die off -- not because they're not good ideas, but because they benefit from timing, or high profile, or a wealth of VC funding.