Hi host buddies, interested to hear your take on the proposed Host Endowment Fund. I've gone through the available info and highlighted a few concerns.
Biggie concern is whether or not the Directed Shares Program Offer being made to "selected US hosts" is one and the same thing as the 9.2 million shares going into Class H stock for the Host Endowment Fund? That is, are hosts actually being expected to fund the 9.2 million shares themselves via the Directed Shares Program or are these shares actually a real and separate donation from the company?
Here's my analysis of the info currently available - I've highlighted the issues in blue, with my questions / thoughts in red footnoted immediately below each point (to save the back and forth to the bottom of the page in standard footnoting and to make for quick reading) - just go to the blue and red bits and please share your thoughts (and any suggestions on how this might work better). Thanks ! 😀
What is the role of the Host Advisory Board? What will they have the ability to influence?
The Advisory Board will be a voice for Airbnb hosts with Airbnb leadership. We expect that Advisory Board members will meet with Airbnb on a monthly basis, and have an official Advisory Board Forum
with executives each year to present proposals gathered from the host community—in addition to sharing regular updates with the community on our progress.
One important part of their role is informing how we choose (1) to invest the Airbnb Host Endowment when funding is available for distribution. This could include policy changes, grant programs, and new product concepts. (2) Before that, the Advisory Board will still have the ability to influence Airbnb’s roadmap and long-term plans.
1. ABNB still has 100% control
2. Policy changes and new product concepts are the responsibility of the company - these costs should be met from existing fee revenue and built into the existing business model. Grant programs are likely to be contentious and PR driven. Funds meant for hosts should not be funding what should be standard responsibilities of the company.
Who will make up the Host Advisory Board and how were they selected?
For 2021, the Advisory Board will be made up of 10 to 15 members of our Host Leaders program—including hosts who are active in our Community Center. (3) Care was taken to ensure diverse representation, inclusive of region, race, gender, socioeconomic background, and host type.
3. Are Host Leaders typically hosts that ABNB have cultivated to run interference for the company? Are these a collection of nodding heads? Unlikely there will be any meaningful engagement from wider host community if the host community itself has not nominated or voted for them as reps. Not democratically elected.
Their initial term will last for one year, and they’ll be responsible for determining the criteria and selection process for future Advisory Board members. You can expect an introduction to them by the end of the year.
How will the Host Advisory Board represent me to Airbnb leadership?
The role of the Advisory Board is to help ensure hosts have a seat at the table.
How can I submit an idea? How will I know if it’s actually considered?
We’ll be working with the inaugural Host Advisory Board to build a formal process for hosts to submit ideas that will be brought to Airbnb leaders in official Advisory Board forums. We plan to share more detail on this when we introduce Advisory Board members.
What is an endowment?
An endowment is a financial entity used to hold funds—in this case stock—intended for specific causes or programs specified by an organization. In many cases, they’re associated with nonprofit organizations or universities.
They allow for long-term support by holding a “principal” (in this case, a goal of $1 billion (4)), and making investments of interest or growth on the principal, when available.
4. Why not start with $100 million? $1 billion is potentially a long way off if shares float around $34.00 - vis 9.2 million shares x $34 = $312,800,00 - only one third of what would be required to activate any disbursements - is this just pie-in-sky dreaming with no real teeth?
Here’s an example. A university might have a $100 million endowment, which grows 5% per year from interest. That gives the university $5 million per year to invest in things like scholarships without depleting the fund.
What is the Airbnb Host Endowment?
If Airbnb is successful, hosts should have a share of that success. The Host Endowment is a fund created by Airbnb that we expect will be initially funded with 9.2 million shares of Airbnb stock. (5) If and when it reaches $1 billion in value, we plan to begin using amounts in excess of $1 billion to fund programs and proposals that support hosts on Airbnb.
5. Big question - are these 9.2 million shares of Class H stock the same shares that will be offered to "selected US" hosts in the Directed Shares Program pre IPO? If so, then the company is not funding this program, but hosts. If that is the case, then the hosts investing in Class H stock in this way should have full voting rights over how this money is managed and spent.
A key piece of feedback we received from hosts as we designed this program was to allow for flexibility. That’s why we’ll solicit new ideas and feedback from the host community on how the endowment can be used—and why the programs we fund year to year may change based on that feedback.
How will the endowment be distributed?
The endowment was created to benefit hosts, and the distribution of funds in a given year will be shaped by host feedback and our Host Advisory Board. It could be focused on a small group of hosts who need support or have reached a certain milestone—or invested in a new product that benefits everyone.(6)
6. This is very open to misuse of funds - who decides who makes it into the "small group of hosts who need support", what milestones, and why should hosts be investing in new products that benefit the company? There certainly won't be authentic local hosts with 1 listing investing their coin in new products, only the bigger property conglomerates could afford to do this.
Examples of potential programs that came up in host workshops include:
7. ABNB setting itself up as arbiter of what constitutes times of crisis and who is eligible.
8. New products to support host success should be part of the company's core business and factored into their existing operating expenses.
9. This is going to be a powder keg of nepotism, favouritism that will off-side many hosts who think they should have been in on the payout. No details of what this payout is (cash or stock?).
10. Another powder keg for the favoured few vs the rest of the host community. Any means testing attached to this? No? Yes? Any scholarship style qualifying provisions? No? Yes?
This program will be flexible, and based on learnings from the 2020 Superhost Relief Fund, hosts will have the ability to influence how it is invested in the community each year there is a distribution.We want the Advisory Board's guidance from the beginning, so we will be meeting with them by the end of the year to consult with them on our approach.
Who will decide how the money is used?
Our intention is to create a lasting endowment that will benefit hosts and be shaped by hosts’ ideas and feedback. While Airbnb will ultimately have sole decision making authority as to how to distribute funds (11) we will do so with advice and feedback from the host community.
11. The trap-door underneath the "seat at the table". ABNB in its "sole discretion" has all authority over how to distribute funds. So regardless of what the Host Advisory Board might recommend, anything could be sidelined because the company reserves all rights to make decisions. No real equity for hosts.
The Host Advisory Board will meet with Airbnb executives on a regular basis to bring ideas forward—including official Advisory Board Forums to surface ideas from the host community.
If the company has final say in where the money goes, is the endowment really shaped by hosts?
This program will only be successful if hosts feel empowered and supported by it, which is why we see it as one part of a larger whole. Our intention is to create a set of programs that give hosts a voice, a formal proposal process, and a meaningful fund to shape how we invest in the host community over time.
While Airbnb will have sole decision making on all investments (12), the proposals we fund will come from or be shaped by our host community.
12. Again the trap door. Easy out to ignore legitimate requests/needs. No voting rights for hosts, no real partnership. Perpetuating the master/servant relationship, patronising to hosts.
Why are you waiting until the endowment reaches $1 billion in value before drawing from the fund?
The endowment is a long-term investment in our hosts, and it’s intended to exist as long as Airbnb does. We want that success to be able to support not just hosts today, but future hosts who join the Airbnb community.
Allowing the endowment to grow to an initial $1 billion will give us more opportunities to draw from it for new proposals and programs in the future, to help ensure funding of hosts’ proposals over an extended period of time.
We’ll keep you regularly informed on what the value of the fund is, and prior to reaching the $1 billion threshold, we’ll continue to gather feedback and proposals from the community and fund them as we would today.
What if the value of the endowment decreases or never reaches $1 billion?
We’re hoping the endowment will reach $1 billion in value, and we may make additional stock contributions, up to a total of 2% of the company’s value, to the endowment over time.
In the meantime, we’ll continue to invest in ideas and proposals that come from the host community as we do today, with the help and influence of our Host Advisory Board.
What are Airbnb’s community grants and how do they work?
In advance of the endowment reaching $1 billion in value, we plan to make $10 million in grants each year, funded directly by Airbnb, to support nonprofit organizations or initiatives in hosts’ local communities. (13) The Host Advisory Board will have the ability to influence who we support based on host feedback.
13. Given the company's track record, these funds will be used primarily for PR exercises in large cities to maximise the spin-off benefit to the company. Tax write-off benefits to the company (charitable expenditure). Nothing to do with hosts.
How did you develop these initiatives?
We developed these initiatives with extensive host feedback. Through a series of workshops and focus groups with a wide range of hosts, we began gathering feedback in 2019 and 2020. The full scope will be designed in partnership with hosts—which is not only true to our vision, but a direct result from our workshops with hosts over the past year.
Good work. I agree with all you've said.
This is a farce. Just another Airbnb PR exercise. If they cared about hosts, there wouldn't be new posts daily from hosts who Airbnb screwed around.
How about not refunding guests in contravention of the host's cancellation policy?
How about having a CS staff that actually knew policy and didn't send canned responses which don't address the issue?
How about removing obvious outlier, lying reviews from guests who got taken to task for violating house rules?
How about not suspending a host's account pending "investigation" while refusing to tell the host why they are being investigated?
If Airbnb gave a FF about hosts, all we'd be discussing on this forum is what kind of cookware to buy for a rental and whether to ask the guests to strip the bed or not.
I hope it isn't a farce @Sarah977 . What I really hope for is that we can have honest discussion with the company so that hosts have genuine equity in that seat at the table. That we become real partners, that the company is well grounded in good business practices, open to constructive critique to enable a more robust and successful operating environment for everyone, guests, hosts and the company itself.
I would especially like to see the threshold for the Host Endowment Fund lowered to $100m as this seems far more realistic and achievable within a much shorter time frame. $5 million a year (assuming 5% interest) is no small potatoes, and something that could go a long way to help struggling hosts in the northern hemisphere through the winter Covid hump.
Do you remember Brian's cosy little chats at the beginning of the pandemic, how when asked by hosts if CS would suffer as a result of the employee cuts and he said absolutely not? But it has deteriorated alas. I'm not sure why the company insists on putting itself in the middle as the "bag man" when so many of these guest/host issues could so easily be resolved.
Excellent observations, @Sharon1014. These are all questions that need to be asked, and while it's highly unlikely we'll ever get straight answers (or any answers at all), it does say a lot about Airbnb's track record - and in particular, about the inherent lack of trust and faith that the host community has in the company as a whole - that their motives should even need to be called into doubt in the first place. Your footnote (13) is a fair and accurate analysis of the whole thing, really.
We're not privy to information on how this fund is structured - whether it's a restricted or term endowment, designed to keep the principal amount intact while using the investment income for charitable efforts, or whether its a quasi-endowment, for example, which are usually started by the institutions that benefit from them via internal transfers or by using unrestricted endowments already given to the institution.
Something that should give pause for thought though, is Airbnb's recent behaviour in relation to the $250M Host Fund, which was allegedly set up (along with major PR campaign) in order to help ease the hardships of hosts whose incomes had been wiped out by the arbitrary Extenuating Circumstances refunds. Yet the public S-1 filings reveal that Airbnb retained almost $50 million of that Host Fund for their own purposes, and have been very vague about exactly how much of the other nearly $200M was actually used to provide relief to hosts.
The Open Homes Fund is another cause for some concern. Airbnb has been resolutely silent about how much in public donations have been collected and disbursed by the (tax-efficient, of course) OHF, and so far, no report has ever been published by the company on how (or even if) this money has been distributed, or to whom
But then, Airbnb is under no obligation whatsoever to publish any such report as its Open Homes Fund is a Donor-Advised Fund (DAF), which are largely unregulated entities, unhindered by pesky disclosure or transparency requirements and frequently the subject of controversy. (The money and assets in donor-advised funds are intended to go to charity some day, but there are no payout requirements, and money can sit in a donor-advised fund for decades - hence DAFs often being referred to as 'Zombie philanthropy'
Interestingly, as part of its ridiculed and ultimately short-lived 'Kindness Cards' debacle, Airbnb initially stated that they would re-route any unwanted 'guest contributions' to their Open Homes Fund instead. Given the company's blind determination to plough ahead with the much-loathed initiative - even in the face of furious opposition from hosts - one would have to wonder now what the company's real motives and intentions beind the Kindness Cards program were?
In the 'Important Announcement from Brian Chesky' global press release of Oct 30th, in which our Dear Leader eulogised about the wonderful Host Endowment Fund and the awesome Host Advisory Board that were coming our way, he gushingly wrote..
"At a time of unprecedented loneliness and disconnection, the role of a host now is more important than ever. Last month, I met with a host named Dorian from Oakland, California. Dorian is a jewelry designer, and she and her husband host guests in the extra bedrooms in their home. Their favorite part of hosting is meeting their guests and discovering the commonalities they share. Dorian told me, “I love the feeling that the world is not that large of a place after all.”
Thank you Dorian, and our 4 million hosts, for making this world feel smaller."
Odd though, that he neglected to mention the Dorian in question had at that point, already been selected as Head of the Host Advisory Board. But that's Airbnb and transparency for ya..
A good short 3 minute video here on Donor Advised Funds, by non-profit expert Alon Cantor. explaining how a lack of transparency and regulation of these funds have led to abuse by individuals and entities who want to park untaxed wealth in funds, for their own intents and purposes
What Are Donor Advised Funds And Why Do They Hurt Charitable Causes?
And a Washington Post article from June 24th, explaining why DAFs are attracting increasing scrutiny and criticism
Zombie Philanthropy: The Rich Have Slashed Billions In Donor Advised Charities - But It's Not Reaching Those In Need
The murky world of 'Charitable Funds', laid bare.
"10 to 15 members of our Host Leaders program—including hosts who are active in our Community Center."
Yet this Dorian has never appeared on this forum as far as any of us are aware, so where would she get her knowledge of what issues are important to a vast cross-section of hosts?
Although I would love it to be otherwise, as I said, I see it as a farce and the fact that the advisory board leader has already been appointed, at least a month ago according to the screenshots above, with no communication to the hosting community about this, would make it appear to be yet another Airbnb non-transparency.
Yes it is very disappointing @Sarah977 but it seems, par for the course with this company, alas. An in-house, nice 'n cosy little group hug with the in crowd over cocktails at Airbnb HQ in SF where everybody speaks the same Silicon Valley language.
I commiserate, would that it were otherwise.
Yeah, I saw that too, did some research on her, which of course was necessary because she has no street cred in the CC community or anywhere else in the Airbnb host community @Michelle53
Lesson for Brian et al, if you're gonna make arbitrary appointments like this to such a key role, you need to make sure that person actually has credibility and a proven track record of advocating for hosts on the issues that matter to hosts.
@Michelle53 The problem is that even if there are other members who have participated in this forum (which supposedly there will be), "the fish rots from the head down".
Strength of leadership doesn't come wrapped up in jewelry design. Everything will be put through the Silicon Valley filter and the reality check connection with hosts living in the real world will likely be meaningless.