Two recent – and seemingly connected events – may lead to large increases in the most unlikely of overhead costs: your nonprofit’s domain name. The back-to-back actions of the removal of caps on pricing of .org domains and the subsequent sale of the .org registry to a private equity firm will likely lead to significant price hikes for the .org domains held by nonprofits.
Earlier this year, the governing body overseeing .org domain rights, the Internet Corporation for Assigned Names and Numbers (ICANN), unilaterally removed the price-hike cap of no more than 10 percent annual increase for a .org domain. A very large share of the more than 10 million registered .org domains are owned and operated by registered charitable nonprofits. The removal of the cap leaves charitable nonprofits vulnerable to abrupt, unanticipated, and significant cost increases at a moment’s notice.
ICANN made the change by ignoring one of, if not the largest, number of public comments that ICANN ever received for a proposed change.
The National Council of Nonprofits submitted comments for the charitable community articulating strong opposition to the lifting of the price-hike cap: the “proposal would subject nonprofits to unpredictable and unrestricted price hikes,” explaining that unlike “for-profit businesses, nonprofits typically do not have revenue flexibility to absorb new and unexpected costs or to raise prices on consumers to overcome the hit to their bottom lines.” Further, the comments stressed the economic realities of the affected organizations: “most charitable nonprofits are relatively small: 97 percent have budgets of less than $5 million annually, 92 percent operate with less than $1 million per year, and 88 percent spend less than $500,000 annually for their work.”
Similarly, nonprofits including the YMCA of the USA, National Geographic Society, and AARP wrote in opposition to a proposal to remove the cap on price hikes for .org domain names. They stated: “The reasonable expectation of .org registrants was, and continues to be, that prices would remain capped to ensure stable and reasonable domain name pricing for the millions of nonprofit organizations that have invested in a .org web presence.” Their concerns were both pragmatic and mission-focused: “Every additional dollar earmarked for domain name registrations is a dollar that is not available to advance the public interest purpose of nonprofit registrants that use the .org name space.”
Then, this month the Internet Society, a 501(c)(3) nonprofit organization which owns the .org registry, announced that it sold those rights to a new for-profit company called Ethos Capital. Once the sale is completed, it would put the rights to more than 10 million domains in the hands of venture capitalists while simultaneously removing regulatory cost controls to protect nonprofits from for-profit interests. It may not be charitable to write this, but venture capitalists don’t get involved out of the goodness of their hearts; they get involved to make money.
The removal of the pricing cap makes .org domains a new pot of gold for these investors. This sale puts the work of charitable nonprofits at risk in at least two major ways. First, it diverts dollars away from programming to protect our identities on the web. Even if the increases aren’t as drastic as many fear, a lot of damage would be done.
With more than 10 million .org domains registered, even a $1 increase in the price means $10 million taken away from serving our communities and put in the pockets of private investors. By anyone’s estimate, this money would be better spent delivering an additional 1.6 million meals by Meals on Wheels to seniors to help maintain their health, independence and quality of life. Or $10 million could enable nonprofits to provide vision screenings for every two- and three-year-old child in California. Second, as damaging to mission dollars would be loss of nonprofits’ credibility if some of these increases make it so a nonprofit can no longer afford to keep their domain.
What happens when/if the domain falls into the wrong hands? All charities, foundations, and the general public will suffer from the damage to the trust that donors could place in a .org. Nonprofits should not need to choose between paying for a domain name and helping people. In short, food, shelter, religious faith, education, culture, and the arts are being replaced with short-sightedness, corporations, and the bottom line. Charitable nonprofits and the communities they serve are the only antidote to greed. The sale of the Public Interest Registry to Ethos Capital must be stopped and price caps restored.
Rick Cohen is Chief Communications Officer/Chief Operating Officer of the National Council of Nonprofits, the nation’s largest network of charitable nonprofits, based in Washington, D.C.