Until recently, Ginger Thomson was head of a four-person staff running a website with more than 100,000 registered users.
That was before her nonprofit completed a round of funding that brought $1.5 million to the table.
Thomson is CEO of YouthNoise, an online social network that connects young adults with causes they are passionate about.
In early June, YouthNoise announced the creation of a “funding blueprint,” based on a for-profit model, that provides funding in stages to allow the group to focus on its mission rather than on fundraising.
YouthNoise content is entirely user-generated, from news to blogs to surveys.
The site features sections organized by issues like poverty or the environment, and allows users to find volunteer opportunities in their zip codes.
“In the early years of YouthNoise, we were a very small, undercapitalized organization that was actually doing some really good things,” Thomson says. “Now that we have some funding, we can actually begin to spread the word about who we are.”
YouthNoise boasts 113,000 registered users from more than 170 countries.
The lead investor in YouthNoise’s first, $1.5 million round of financing is the Omidyar Network, an investment group created by eBay founder Pierre Omidyar and his wife, Pam.
The group invests in nonprofit and for-profit ventures with a mission of fostering self-empowerment.
Other first-round investors include the Surdna Foundation, Rappaport Family Foundation and Virgin Mobile USA.
Omidyar Investment Manager Dena Jones Trujillo, who serves on the YouthNoise advisory board, says the blueprint was created because her group saw traditional fundraising as a huge hurdle for YouthNoise.
With incremental funding, she says, YouthNoise “would spend significant portions of their time and our investment fundraising, rather than focusing on building the business and achieving the mission.”
Her team prefers funding in rounds, she says.
When the Omidyar Network believes in a team or product, she says, it usually makes an upfront investment, a model she says can be applied just as easily to a nonprofit.
With the first stage of fundraising out of the way, YouthNoise stands poised to begin its next $3 million investment round.
YouthNoise CEO Ginger Thomson says the organization will focus first on vigorous advertising to increase its audience, which tends to find the site through word of mouth or search engines.
“YouthNoise does in fact bring a young person along a continuum from just an initial passion toward deep civic engagement,” Thomson says. The next step will be renovating some areas of the website to deepen that level of engagement.
Along with the two groups’ shared mission of empowerment, YouthNoise’s third goal, to become self-sustaining, is the one that Jones says makes the two groups a good match.
“For us, the mission fit is so critical,” she says. “We think they have the team and the board and the proven product. It’s not just an idea. They have proven that it works.”
The website’s audience of 16-to-22-year-olds is a desirable one for other organizations, Jones says.
“Think about the possibility of other organizations tapping into the platform to connect with young people and share their knowledge and resources,” she says.
The Omidyar Network is also considering applying the funding blueprint to a national expansion of DonorsChoose, a nonprofit that connects donors with public school teachers’ funding needs through the Internet.