Billionaire Todd Wagner is trying to do for charities what Amazon did for retail

Billionaire Todd Wagner explains why philanthropy hasn’t been easy

In 1995, Todd Wagner and his business partner Mark Cuban pioneered streaming audio and then video over the internet.

AudioNet, which they eventually renamed to, went public in 1998 and was sold to Yahoo for $5.7 billion in 1999. It made Wagner and Cuban billionaires.

In the wake of the sale, Wagner was twice offered the role of chief operating officer of Yahoo, which, in the 1990s, had the cachet that Google does today. He passed up the opportunity twice because he wanted to figure out a way to give back.

Wagner is from Gary, IN, a small town a couple dozen miles south of Chicago that was founded in 1906 by The United States Steel Corporation as home for the Gary Works, the manufacturing company's largest plant.

Todd Wagner
David A. Grogan | CNBC

The Midwestern town's seal calls it the "City of the Century," but today blight and poverty have filled in gaps vacated by changing industry. Once called "Magic City" for the hope and opportunity available, the town's own Department of Commerce doesn't deny the city's misfortune. "Gary Department of Commerce will be used as a tool to mount a full assault on record unemployment and a stalled local business environment," the website reads.

Becoming an overnight billionaire compelled Wagner to contribute some of his wealth to those less fortunate. "I had grown up in Gary, Indiana. I'd seen a steel mill, blue-collar kind of town and the decay that that can create," Wagner told CNBC at the Iconic conference in Boston in September.

"I wanted the opportunity for me to try to give back, to try to figure out a way to maybe use some of this treasure, some of, hopefully, my talents and time to figure out how to make a difference," said Wagner. His first efforts were all focused on empowering disadvantaged kids, especially through his namesake foundation. Early on, he would swoop in and write checks.

Then he got to a point where he determined that charity was operating less efficiently than it could or should. If he could use some of his technology background to help charities, they would be able to raise significantly more money.

There's one thing a billion dollars won't change: Todd Wagner

"The entrepreneur rises again," said Wagner. He told himself, "I'm going to put something together that helps transition these companies from a very analog way of doing things to a digital way of doing things. So all of the platforms we've built are to do just that — to take them just like we hopefully did for streaming media, like Amazon did for retail, I'm trying to do the same thing for charities."

And he did just that. Wagner is the founder and CEO of the Charity Network, which is the umbrella for three tech-driven fundraising platforms. Charitybuzz is an online auction for experiences and meetings with celebrities to benefit charity. Prizeo is an online sweepstakes to benefit charity. And Chideo bills itself as YouTube for charity. Online content from celebrities and industry insiders is made available for a fee to benefit charity. Together, the three online charity platforms have raised over $200 million.

Wagner's work giving back validates his claim that while becoming wealthy will change your life, it won't change who you are.

"What wealth does is amplifies what's inside," he said. "So if you're instinctively somebody who's passionate or cares about others, you're going to do that. If you're instinctively someone who maybe doesn't, then you're not going to really take that path."