How do instruments of direct democracy affect the social movement organisations that sponsor them? Drawing on social movement studies and direct democracy research, we argue that direct democracy has a transformative effect on its sponsors because it triggers a triple process of movement building, learning, and bargaining with political elites. This triple process sets in motion enduring trends within the organisation that has undertaken the burden of promoting the initiative. We illustrate this argument with the case of a people's legislative initiative (a non-binding mechanism of direct democracy) organised by a housing rights organisation between 2011 and 2013 to counter the eviction crisis in Spain. This initiative did not result in the reform that activists demanded. Nevertheless, it contributed to consolidating the sponsor organisation, innovating its repertoire of action, and broadening its strategic options.