IPOs for NPOs

By Jay Hirschton, CEO, Full Circle Fund


I'm writing this on the heels of Airbnb's recent historic IPO in which its valuation skyrocketed to the likes of over $100 billion dollars. Airbnb is a great company with an incredible product. Even more, they are an important part of the Bay Area philanthropic ecosystem. They have generously hosted Full Circle Fund events in the past and their employees are valuable Full Circle Fund community members.

I very much appreciate Airbnb, but we are treating Airbnb incorrectly because they have operated more like a nonprofit. While not a registered nonprofit organization, they actually have not made a profit since they were founded in 2008. Prior to Airbnb’s first day on the market, Forbes published the following: “We have incurred net losses in each year since inception, and we may not be able to achieve profitability,” Airbnb disclosed in an SEC filing. Airbnb lost $70 million in 2017, $17 million in 2018, $674 million in 2019 and $697 million in the first nine months of 2020.” How different would their story be if they were funded like a nonprofit?

The even more interesting question is: What would happen if the top local nonprofits working to end homelessness were given the same treatment as venture-funded startups like Airbnb?

Imagine the first-ever IPO for an NPO!

Venture capitalists always have an eye on the big picture of long-term potential profitability to justify capital investments that bring small companies with big ideas to scale. What if local nonprofits focused on the unhoused were given similar capital investments – like Airbnb was for over ten years while operating at a loss– to not only have ample risk capital to maximize impact but also expand back-office operations and invest in the talented employees running their organizations? Safe to say these nonprofits would be in a much stronger position to serve the growing number of people experiencing homelessness and the big-picture potential is to seriously address the quality of life that has historically made the Bay Area an attractive place to businesses and their employees.

Ultimately, we don’t expect Glide Memorial to get a $100 billion dollar investment, even though that would be amazing. Being more realistic, let’s just imagine that funders prioritized building the nonprofit back-office operations and investing in the talented employees that run these organizations rather than just focusing on the funding of direct service outcomes. Very few funders are willing to take the former approach, which is often seen as radical philanthropy in the nonprofit sector, while in almost any other sector one would be considered insane not to fund the back-office and people as this is the commonly accepted formula for success.

At Full Circle Fund, we provide opportunities for funders to invest in nonprofit infrastructure. For example, we recently announced grant recipients for our Accelerate Social Justice in a Post-COVID World initiative made possible by Okta for Good—Okta’s social impact arm—which supports the operations and technology needs of nonprofit organizations. They are supporting the Full Circle Fund initiative with resources including grants and skills-based volunteer hours from Okta team members. Grant recipients, which include Centro Community Partners, SaverLife, and WorkIt (an app by United for Respect), were selected for their work to help disrupted retail and service workers, as well as minority-owned small businesses. The collaboration will help these nonprofits improve and expand their technology capabilities, which will ultimately allow them to serve more people in navigating the impacts of the COVID era and beyond.

If we want to see different results in our communities, we need to take a different approach. We need funders and business leaders to think beyond short-term metrics and measure success by longer-term impacts. We need more funders, like Okta for Good, to understand the value of investing in the capacity building of nonprofit operations.

For more information on FCF’s Accelerate Social Justice in a Post-COVID World initiative, which includes Equitable Education, Economic Security, and Healthy Communities, visit www.fullcirclefund.org.


Companies interested in assisting local nonprofits with grants and volunteers may contact dan@fullcirclefund.org.


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