New Orleans Like many progressives I get frequent solicitations from Change.org about this petition or that petition for this cause or that cause. I’m not a big petition signing guy, just because it’s time I don’t really have and a tool that is not the first to my hand, but I monitor it all to keep up with what’s happening. I started looking more closely when I read The Business column in the Wall Street Journal by John Bussey on June 8th that told me to my surprise that Change.org was a for-profit. I had earlier reservations about Care2.com and Moxy Vote. Why in the world?
Bussey’s piece drifted around with interesting discussions on something called “B Corporations,” which are now allowed in half-dozen or so states and are worth further discussion but essentially are for profit companies that self-declare as social benefit operations that will use more of their profits for internal investment rather than stockholder benefits. There were spinning rationalizations from the CEO of Change.org Ben Rattray, who argued that “the reason we’re making money is that it’s the necessary condition to having impact.” None of these obfuscations seemed willing to address the real points.
A nonprofit can make money. You don’t have to create a for profit structure to make money. All of that is hooey. A tax exempt nonprofit just doesn’t pay taxes to the government on income related to its mission. A plain vanilla nonprofit, which is what ACORN was, can invest all of its excess revenues in building its organization (similar to the B Corporation claim), but if it ever had made big bucks (certainly wasn’t going to happen during the 38 years when I was Chief Organizer) it would have had to pay taxes.
Rattray and the others are trying to hide some simple facts behind the very important altar of self-sufficiency. Inherent in their arguments are, yes, Virginia, it is critical to pay your bills for you to have a business plan and/or organizational model that arcs towards self-sufficiency. I totally endorse that, and it has become an obsession for me after watching ACORN’s attack and demise less than 2 years ago.
But all of this is obfuscation. The only thing you can’t do as a nonprofit is provide distributions to shareholders. The only real reason that Rattray and others would chose any of for profit corporate structural formations is the hope and intention of personally cashing in or selling the business out at some point and making more for themselves (and any other possible stockholders) than were available from salaries and benefits paid or loans and investments returned. Bussey makes the mistake abetted by Rattray and others who know better of assuming wrongly that nonprofits cannot make money, which of course they can, and confusing sustainability, taxes, and other issues, with the simplest truth that this is all about self-interest and stockholders.
It turns out that the Change.org business model is selling the aggregated email lists. I didn’t know that either, which makes two strikes against transparency. Sure a for-profit corporation can buy a .org website, since they are for sale, but to be so committed to not being transparent is a problem for me despite all of the good they are claiming to do.
All of this makes a mockery of progressive movements, progressive causes, and the base of regular people of good faith who are joining these efforts without realization and therefore knowingly being fleeced like so many sheep to the slaughter. There is role for Change.org in this movement without a doubt, but we’re I’m at two strikes (for profit, list selling) and the third for me is wanting a true explanation from Rattray about his real intentions for Change.org which means a real story about why it is not constituted as a nonprofit?
