A former Facebook president’s pet project for philanthropy, Causes, is coming into its own, announcing today it has closed a $9 million round of mezzanine funding.
The for-profit Causes bills itself as “tactical philanthropy,” leveraging Facebook and other social networking sites as a way to raise money for fighting everything from cancer to genocide. The notion of online activism has recently faced criticism from New Yorker writer Malcolm Gladwell, prompting a passionate response from a Causes employee, Susan Gordon, the company’s nonprofit coordinator.
Causes asks users to join a cause and donate directly, or by other channels such as asking you to “donate” your birthday to a specific topic for the day, so that friends can give funding as a virtual birthday present. Gladwell derided such actions as “low-risk” compared to, say, joining a street protest.
On average, the company says it raises $20,000 a day from Facebook alone, and $40,000 total daily from all the other social channels it uses. It earns its revenue by asking for 10 percent to 20 percent “tips” on all donations made.
The philanthropy was created by former Facebook president Sean Parker and current Causes CEO Joe Green in May 2007 and now includes a network of 140 million people, with $27 million donated.
Thus far, the three-year-old Causes has raised $16 million from two rounds of financing, the first led by $5 million from the MCJ Foundation and the Case Foundation in the spring of 2008, and the second from today’s fresh $9 million shot-in-the-arm.
This round of funding was shepherded by startup funding firm NEA in partnership with a consortium of investors including Dustin Moskovitz, Karl Jacob, Marc Benioff, Ron Conway, Keith Rabois and Founders Fund.
Green said it will use the new funds to expand its 17-member team and look at new ways to drive donors to its standalone website Causes.com, lessening its reliance on its Facebook application. It will also move its headquarters from Berkeley, Calif., to San Francisco.
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