Photo: Dan Holm/shutterstock
Photo: Dan Holm/shutterstock

When the Omidyar Network laid out its revised strategy in 2018, it included something very unconventional for the giving vehicle of a living tech tycoon. Through the lens of “reimagining capitalism,” Omidyar wants to empower workers. “Productivity has gone way up in recent decades, but workers haven’t shared in that,” Omidyar’s CEO Mike Kubzansky told Inside Philanthropy back then. “There needs to be some way in the modern era that workers can organize and collectively advance their interests.”

In the midst of a pandemic, and with the fortunes of low-wage workers thrown even further into disarray, it’s now becoming a lot clearer how the Omidyar Network (ON) plans to pursue that agenda. Last week, it announced a three-year, $35 million investment in its Reimagining Capitalism focus area, with an emphasis on building worker power.

It’s one of philanthropy’s strongest recent overtures toward labor advocacy. The investment comes alongside full-throated support for mainstays of the new labor movement like the National Domestic Workers Alliance and Jobs With Justice, as well as a strikingly frank acknowledgment that vast change is necessary to the systems enriching the few and impoverishing the many.

This is largely untrodden ground. Here, we have part of a living tech entrepreneur’s $15 billion fortune channeled not into workforce development or “upskilling,” but toward a movement that directly challenges the power of today’s corporate titans. And yet, ON says it maintains a fundamental belief in markets and capitalism. What gives?

Capitalism in Balance

It’s worth taking a look at how the Omidyar Network got here. Even back when Pierre and Pam Omidyar formed the so-called philanthropic investment firm as an LLC in 2004, it was clear that the eBay founder’s giving would take a maverick turn. One line of thinking at that time was that ON’s early adoption of market-based strategies like impact investing and micro-finance marked the Omidyars out as “philanthrocapitalists,” eager to apply quick neoliberal fixes to social challenges.

In the intervening years, the philanthrosphere has, in a sense, caught up to where the Omidyar Network began. Some of the wealthiest donors out there—think CZI—use hybrid giving vehicles to back political nonprofits and private enterprises; funders that could hardly be described as ideologically capitalist—think Ford—have leaned into mission-related investing.

Meanwhile, as many tech funders touted the world-saving power of new markets and inventions, ON ironed out a more balanced view. It remains convinced that markets can be a force for good, but only if they’re situated in a broader economic and political context that reins in their destructive tendencies.

On the political side, that means a pluralistic and democratic society with a healthier attitude toward the promise and perils of tech. ON committed to addressing those issues in 2018, complementing the ongoing work of other Omidyar-funded entities like the Democracy Fund and First Look Media. Reimagining capitalism and empowering workers is a newer component of the Omidyar agenda. It reflects ON’s desire, as Kubzansky articulated last year, to focus “upstream on the rules of the game” and tackle broader power structures.

“Blindingly Obvious”

COVID-19 didn’t prompt Omidyar’s new $35 million investment, but it did increase ON’s sense of urgency. “We believe fundamentally in markets and capitalism, but they need to be completely reimagined to meet today’s challenges,” Kubzansky said. “These failures were readily apparent when we set this course for ourselves in 2018, and the COVID-19 crisis makes this blindingly obvious for everybody.”

Building worker power lies at the core of the new commitment. In a white paper released alongside the announcement, ON doesn’t beat around the bush about why workers lost so much power, and what it’ll take for them to regain it. “When you systematically roll back labor law and strip workers and their organizations of power, this is what you get,” Kubzansky said, referring to deliberate, long-term efforts by policymakers and free-market advocates to undercut unions and make it next to impossible for new worker coalitions to organize.

Omidyar intends to fund in five areas. On the ground, ON wants to expand labor organizing in partnership with unions, find ways to help workers collectively bargain, and develop innovative solutions for advocacy organizations. That includes the revenue models that 501(c)(3) and 501(c)(4) labor organizations desperately need in lieu of union dues. In addition to the organizing component, Omidyar will fund policy work—Harvard’s Clean Slate for Worker Power program is one example—as well as research efforts to better document working people’s experiences.

According to Kubzansky, this is the Omidyar Network’s first big announcement concerning its commitment to reimagining capitalism. But ON already started making worker power grants last year. One of the efforts it’s supporting is the LIFT Fund, a grantmaking vehicle for labor movement innovations backed by Solidago, Ford and the AFL-CIO. Another grantee is the National Domestic Workers Alliance (NDWA), a leading workers’ rights nonprofit and a frequent recipient of grants from the short list of funders that actually support worker organizing. Rounding out the list of current grantees are the Center for American Progress, United for Respect, the Workers Lab Innovation Fund and Coworker.org.

If ON had announced this investment three months ago, Kubzansky said, the total may have been slightly lower. Following the outbreak of COVID-19, ON dedicated an additional $1 million from its contingency budget to support this work. It also set up a $1.5 million COVID-19 Economic Response Advocacy Fund designed to inject 501(c)(4) funding into advocacy campaigns for worker-oriented economic stimulus. The wider investment in Reimagining Capitalism will likely employ c3 and c4 funding, and might encompass other options available to ON, like impact investments.

Expanding the Field 

The Omidyar Network has made no secret of the fact that it wants to attract more funders to labor advocacy—funding which, by the way, is in short supply. With some exceptions, philanthropy has a poor track record when it comes to support for workers’ rights, and its reticence has arguably contributed to funders’ overall lack of progress against inequality.

The funders that do support the labor movement are mostly legacy foundations like Ford, Kellogg, Surdna and Irvine. The biggest living donors tend to steer clear, funding less edgy strategies like workforce skills development. Some, like Gates, Bloomberg and Ballmer, fund poverty research, but tend to draw the line at actual organizing.

While it’s tempting and usually simplistic to cast billionaires as heroes or villains, it does make a difference that at least one tech billionaire actually backs the labor movement. The Omidyar Network “is in quite a unique position, I’d say, and [is] perhaps even an unlikely voice to help us and the world understand why worker power is so key to change,” said NDWA’s Executive Director Ai-jen Poo.

Poo was referring to Omidyar’s Silicon Valley roots, a pedigree that might seem at odds with NDWA’s mission to organize what Poo calls “a workforce that has never had collective power.” But NDWA and Omidyar seem eager to make common cause, including around innovations that draw on the strengths of both organizations. One example is Alia, an online tool that enables domestic workers to receive benefits.

Of course, Omidyar isn’t the only living donor who has gone to bat for the labor movement. Other notables include investor and Fight for Fifteen backer Nick Hanauer, not to mention a little funder called the Open Society Foundations. But George Soros is so associated with the progressive left that it can be hard to see OSF’s grantmaking bringing other billionaires closer to workers’ rights. Meanwhile, Omidyar has charted courses that other big donors have followed.

Unlikely as it may seem, Silicon Valley may be where broader interest in workers’ rights takes off among the ultra-rich, if it ever does (and that’s a big if). Consider the Hewlett Foundation’s efforts to see beyond neoliberalism, for example, or the Economic Security Project, an initiative seeking to promote basic income and rein in corporate monopolies. Its living donors include Facebook co-founder Chris Hughes, Mike and Kaitlyn Krieger, and, you guessed it, Omidyar.

Shifting Money, Shifting Power

For the nonprofit advocacy groups that make up the core of the new labor movement, the COVID-19 downturn is a cause for great concern. Movement organizations like NDWA aren’t unions and do not collect dues, leaving them reliant on philanthropic funders to a large degree. A decline in funding will leave them less able to empower low-wage workers and shift a policy environment long weighted to favor the “job creators.”

That is a vulnerability, and it’s heartening to see the Omidyar Network point to the need for new revenue models among its labor movement grantees. When worker advocacy organizations can sustain themselves, they benefit from the same sure footing that philanthropies enjoy from the start.

If it’s successful, ON’s worker advocacy funding may move beyond shifting money and actually shift power, which is perhaps a better criterion for philanthropic effectiveness. As Kubzansky put it, “Our fundamental goal here is simple. We want to see working people given the same priority as shareholders, where power is better balanced across the economy.”

Share with cohorts