Over the weekend, a San Francisco-based nonprofit, Watsi, gained a lot of media attention—but not for its noble, charitable cause: serving as a gateway for crowdfunding medical procedures for those in need abroad. Instead, the nonprofit is raising eyebrows because of the way it’s gone about fundraising.
Straight out of the for-profit startup playbook, Watsi sought out angel investors and just finished its first round of seed funding through Ycombinator, a high-profile startup incubator. The nonprofit announced that it had raised $1.2 million in July, and to date, Watsi has donated more than $2.2 million to helping people around the world. All this in just over a year’s time.
Aside from the obvious positives of not having to send canvassers door to door to raise money for the nonprofit, Watsi has been able to send 100 percent of its donations to those in need. And the seed money will be used to cover its operational costs for the next 18 months. The nonprofit hopes to go through a second round of funding and then become sustainable through operational donations from contributors or through corporate partnerships.
Is this the look of the future for nonprofits? For some, I think, definitely. There is certainly a lot of money moving around the San Francisco startup scene, and it really does sound like a perfect match for a nonprofit with a tech-based platform. There seems to be a socially-conscious center at the core of many of these new startups, with profits almost becoming an aside to many of these young entrepreneurs’ goals. But all nonprofits certainly can’t rely solely on tech entrepreneurs to help fund their missions. Hopefully, though, this new model will help others starting nonprofits to find and think about new ways to build their organizations and help those in need.
What do you think about this new funding model? Leave your comments and questions below.
Thanks for reading,
Drake Forester