Can the real Airbnb please stand up?
It has long seemed to me there are two Airbnbs. On one hand, it’s the online marketplace that created millions of places to stay for millions of guests. On the other, there is the “move fast, break things” disruptor that has been criticized for exacerbating housing crises from Barcelona to the Bay Area.
Inside the company, it turns out, Airbnb is also two different things. It started as a for-profit company, brokering the market for short- and long-term stays around the world, taking a commission on every booking made through its platform. Then, after Hurricane Sandy hit New York in 2012, Airbnb gained a second identity: as a nonprofit helping refugees and evacuees find temporary housing.
Of course, a company doing nonprofit activities adjacent to its core business model is nothing new. Just about every business today has a philanthropy or corporate social responsibility arm. But as social impact has become central to corporate identities, it surprised me that Airbnb went the opposite way, proudly separating its dotcom activities from those of Airbnb.org.
Why is that, and is it a model for others to follow?
Catherine Powell, the executive in charge of hosting at the for-profit Airbnb, said that after initially running the nonprofit initiatives in-house, they “wanted to scale,” but couldn’t. “We wanted to have…a nonprofit where we had clear and discrete relations with NGOs and governments, [and were] able to fundraise.”
That became much easier, she said, when Airbnb became both a dot-org and a dotcom. And some people who were hesitant to become hosts for Airbnb.com, the company found, were willing to open their doors for a nonprofit housing refugees. So the company set up its nonprofit as a separate legal entity.
Since Airbnb.org’s legal creation, its director Katherine Woo told me, the nonprofit has helped temporarily house over 300,000 people, including 200,000 refugees from countries like Ukraine, Afghanistan, and Venezuela. On the flip side, 91,000 hosts from just about every country in the world have signed up to welcome those who have been displaced from their own homes.
To generate this kind of impact, Woo said, Airbnb.org can lean on its for-profit parent in a variety of ways, including funding, brand recognition, access to the .com platform for its search and booking features, as well as shared office space, back-office functions, and employees.
The dot-org’s activities also flow back to the dotcom. One way the nonprofit’s donations are used, Woo said, is to provide “travel credits directly to refugees,” who can then use them to “book any stay on Airbnb.com” or elsewhere. (Airbnb, to be clear, does not collect fees on any Airbnb.org stays, regardless of how they are booked.)
It’s a reminder of the power technology can have when deployed for good and a testament to the goodwill and commitment of Airbnb’s founders.
But I’d hesitate to call it a model to follow.
For one thing, the “independent” nonprofit isn’t that independent. Its employee base, IP, offices, and support functions exist in the good graces of Airbnb. Its board counts several members with Airbnb ties, including Powell. (Its initial three board members were selected by Airbnb company founders and executives and included Joe Gebbia, Airbnb co-founder and dot-org founder, who still serves on the board. Currently, a majority of its seven-member board is independent, as a PR rep for Airbnb.com and Airbnb.org pointed out to me after publication.) That kind of dependence could pose problems and could blur the lines between the two brands, I’d say.
Perhaps the bigger issue, though, is that by separating “doing well” from “doing good,” Airbnb.com may lose sight of its full societal impact.
Airbnb was a great business idea, and its founders’ idealism still trickles down. But whether its overall impact on society has been a net positive or negative remains, as I see it, debatable. The evidence I have read suggests Airbnb has almost certainly played a role in making certain housing markets unaffordable for residents. This week, the Financial Times was the latest to report on that topic, though Airbnb contested its analysis. Some also question the structure and transparency of the fees it charges.
But beyond the dispute on Airbnb’s role in specific housing markets, the deeper issue I see with the model of spinning off a nonprofit is that it could curtail efforts to make the pursuit of social good part and parcel of the core business model of a for-profit entity. (Academics like French business school professor Isaac Getz see this “altruistic enterprise” model as an ideal way for companies to create social impact.)
When I brought up the topic of Airbnb’s net social impact, Powell said they “don’t calculate” social impact in the way that I saw it. “It’s so integrated in the way we operate, we don’t break it out,” she said. If that were unequivocally the case, I’d argue, perhaps we’d see less debate about the nature of Airbnb’s role in societal domains core to its business, such as housing and tourism, and more consensus around its net positive effects.
Still, “We want to behave like a 21st-century company,” she insisted. “We take the needs of all of our stakeholders very seriously.” Airbnb teams regularly interact with governments about their concerns, she said, and the company’s revamped platform is explicitly redesigned to help travelers explore new destinations, rather than contributing to over-tourism.
Is it enough? Do you consider the dotcom-plus-dot-org structure to be a model? I’d be interested in hearing your thoughts.
Clarification, Aug. 24, 2023: This story was updated to make clearer that Airbnb does not charge any fees on any of its dot-org stays on any platform and to specify the current makeup of the Airbnb.org board.
Clarification, Aug. 25, 2023: This story was updated to make clearer the basis for the interpretation and assessment expressed in this edition of Impact Report, and to add source attribution.
Clarification, Aug. 29, 2023: This story was updated to clarify the section about the independence and makeup of the Airbnb.org board.
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We’ll be welcoming Google chief sustainability officer Kate Brandt next Monday, Aug. 28, at 12 p.m. Eastern for our last “Sustainability 101” webinar. If you’d like to attend, you can sign up here. We’ll also discuss sustainability and social impact at our Impact Initiative conference, which takes place in Atlanta, Sept. 12-13. Sign up here.
Peter Vanham
Executive Editor, Fortune
peter.vanham@fortune.com
This edition of Impact Report was edited by Holly Ojalvo.
ON OUR RADAR
ESG Backlash Is Real and Growing. What to Know. (Barron’s)
As we’ve reported before, the ESG backlash is real and growing. But according to two researchers at the ESG center at The Conference Board, “Companies should view ESG backlash as an opportunity to clarify their strategy and communications.” Of the authors' five suggestions, these three stood out to me:
—Don’t just make a materiality analysis or sustainability report—integrate ESG into your overall corporate strategy.
—If “ESG” doesn’t resonate with your customers and employees, use terms like “sustainability” and “corporate responsibility.” But don’t let anti-ESG groups control the narrative.
—Where ESG criticism is constructive, do “not react emotionally to backlash but take this as an opportunity to have a candid, fact-based discussion about ESG.”
Have a full read of the piece here.
