This is really cool, but I'm curious how an investment in this is different than a charitable contribution. The contribution is awesome for the network it introduces Watsi to, but I can't imagine there will ever be a return on this kind of investment.
(This is not meant to sound negative. I am truly excited to see it, interested to see what the YC network can bring to it, and very curious about the investment thinking behind it.)
Will they also be going through dinners, office-hours and the like?
I could see this being a good way to help new non-profits get over the initial hump of raising awareness, getting administrative issues sorted out and so on. Certainly a service worth more than just the money provided.
If it takes off and is successful on a massive scale, I'm sure they will find a method to monetize it other than transaction fees on donations. One example that I can think of off the top of my head is to charge medical device manufacturers or pharmaceutical companies a fee to market their products the recently funded with direct messages or traditional advertising.
I don't think this ("monetization", for profit) is planned -- and if it were I and many others would have a big problem with it. See pg's comment above.
> The contribution is awesome for the network it introduces Watsi to, but I can't imagine there will ever be a return on this kind of investment.
The model of charityfund-operationsfunding separation is quite enticing. This kind of transparency fosters trust. If they ask for donations on the side to keep their operations running, by golly they've got access to my wallet alright.
Exactly what I was thinking. It says on Wikipedia that YC takes about 6% of the company's equity. But I suppose a nonprofit doesn't have equity. So what's the benefit to YC? Simply some good PR?
"At Watsi, 100% of your donations directly fund medical treatments. Watsi.org is separately funded. They pay all their operational costs from their own funding, and none from your donations. They even eat the credit card processing fees."
This works great with Watsi's crowdfunding-style model. It probably wouldn't help with things which need legs on the ground full-time, but it would be interesting to see more nonprofits looking at an "out of channel" donor model.
P.S. If you haven't clicked through to read PG's announcement and check out Watsi, go do so. Really. This is something YC is going to look back on and be proud of being part of 20 years from now.
"At Watsi, 100% of your donations directly fund medical treatments. Watsi.org is separately funded. They pay all their operational costs from their own funding, and none from your donations. They even eat the credit card processing fees."
It doesn't sound (as) cool me if the founders can only do this until they go broke. It looks like they do accept direct donations to fund their operating costs, but it seems to me that the demand (if that's the right word for the desire to donate) might not increase at the same rate as the demand to fund treatments (and therefore costs for credit card fees, hosting, staff) increases. Better to take a percentage and be transparent about what you use it for.
HN is bad at subtext, so let me offer you a decoder ring on the subtext of the 'pg story we're commenting on:
YC is working on addressing the problem of funding Watsi's overhead. The point of the service is that end-users don't fund Watsi, they fund patients. In the same sense as you need to take it sort of on faith that Airbnb can bootstrap and maintain a two-sided market for short-term lodging, you should probably take it on faith that Watsi's model is going to work; if you want to make Watsi work well, go fund a patient with it.
There is a real 13 year old girl on Watsi right now who is unable to walk because of a correctible congenital condition. Who cares about the Watsi founders? Go help the girl! :)
Who cares about the Watsi founders? Go help the girl!
I think the point is not that people particularly care about the Watsi founders; but rather, that they care about the hundreds of thousands of other girls whom Watsi won't be able to help if Watsi and/or its founders go bankrupt because they lack a sustainable funding model.
I don't understand the logic there; at least in terms of stopping someone from getting involved: the girls you can help now should be just as, if not more important than the future.
Note, that comes across as snarky via text, but it's not meant to be. I'm just explaining my way of thinking about it. :)
The logic is that it takes time and money to get to where people can be helped. While it is true that Watsi can help people now regardless of whether they will be able to in a year, it's much more effective for Watsi to continue to exist because otherwise another organization will have to pay the startup time and money cost again.
Also, it is entirely possible to donate and also have this discussion, so you may very well be talking to people who both help present needs and express concern for potential unmet future needs.
It's not about whether or not to use Watsi now, but a concern on behalf of Watsi. I'm not going to refrain from donating today because Watsi might go away tomorrow, but I'm certainly concerned about if and how it will still be here tomorrow.
Wow, I'm the embodiment of HN being bad at subtext! :P
On the one hand, I see your point, and I went and helped a little girl (as it happens, a different one). Maybe it doesn't need to be sustainable. It sounds like they've got it covered for now, and if they "only" help a few hundred people before they have to look for other work, that's pretty good.
On the other hand, I don't think it's off-topic to comment on the viability of a business model on a forum about startups. I know it's working in practice, but can it work in theory? :)
Very good point. We certainly don't want to go broke!
However, we feel very strongly that Watsi should be run like a successful startup, and not like a traditional non-profit.
Sustainability is extremely important to us. I'm a terrible fundraiser, and I want nothing more than for us to cover our own overhead.
However, it just doesn't make sense to implement revenue generating features (e.g. take a cut of donations, which to be clear we will never do) until we hit scale. Right now, we're entirely focused on improving our product, speaking with donors, and maximizing our impact.
However, just like any successful startup, there will (hopefully) come a time when the costs associated with scale begin to outstrip the seed-support we've so generously received from people like pg and Jessica. When that happens, we will implement features that generate revenue for our organization, and we'll have a user base large enough to make those features viable.
Without going into too much detail, those features will include things like asking donors for an optional "tip" to Watsi when giving to a patient (expected to net 6-8%), cause marketing products (already a few companies interested), white label, etc.
We will never abandon the 100% model, and I'm completely confident that for as long as there is demand for the service we're offering, we'll find a way to cover our overhead.
I like to poke holes in ideas, so I hope that didn't come across as too negative. I partially funded a patient, and it strikes me as a good sign that I've been refreshing the page to see that she gets the rest of the funding she needs. So I hope you are successful (beyond the people you've already helped, so mad props for that!).
Contrary to what you may think, overhead in a non-profit is intrinsically bad. It's a sign of a functional, well-run organization.
Why? Fundraising to cover your overhead costs when you're small is relatively easy but comes increasing harder year after year as you grow.
The reason most non-profits take a portion of donations for overhead costs is so that they can keep the lights on and (hopefully) become better at providing their services more efficiently. Moderate overhead percentages are not a bad thing for non-profits. As a donor you should want the organization that you're supporting to have a way to pay their bills, investing in productivity improvements, and build scale.
I applaud Watsi's commitment to passing 100% of donations onto patients and I'm cheering them on to find a sustainable funding model over the long run.
Although it is a good sign, it's not that cool. The operating overhead of a charity should be largely irrelevant to working out if it is a good charity.
For example, given charities X and Y both distributing anti-malaria pills (or something). X and Y are identical except X has operating overheads of 80%, and distributes 50 pills per dollar donated and Y has no operating overhead, but only manage 20 pills per dollar donated.
Clearly X is the better charity, since it moves more pills, even though only 20% of the donations it receives get through.
What I'm trying to say is: operating overhead is a poor metric for comparing charities, since the thing that matters is the final outcome given a certain donation amount.
(That said having a high overhead is probably a sign that a charity could improve, and so do more good per dollar.)
Very happy to see this. At the very least, it's great news for the nonprofit world, which needs desperately to learn some of the basic the lessons of the startup world: fail fast, iterate, focus on your users, and more.
Would be interesting to observe how the established nonprofits react to this. Many of them do the following: Make their target audience (who they claim to care for) more dependent (i.e., don't solve the problem, just give some temporal ease) and take money from third parties (state, private donors) that don't control them.
My guess is that they would come up with many arguments against this startup-ish approach and would lobby for legal barriers.
Watsi is already working with huge names in this space. PIH, one of the best known, funds on-the-ground medical care in places like Haiti and Subsaharan Africa. I don't think anyone in these places cares how "dependent" they are on PIH; their kids are living with broken femurs, infected bones, cataracts, and hernias.
Thanks for the info. I didn't intend to imply that they (or other nonprofit startups) would face opposition by all established players. It's just that I found many "nonprofits" showing questionable behaviours: The people working in the field are often very interested in helping, (some but important) people in the administration became cynics or bigots and working for a nonprofit became less of a mission and more of a job option and power play and protecting their org's income streams and spheres of influence is more important than helping.
This is a POV from Germany where you have a wealthy population willing to donate and many sharks eager to catch the fish. Add to this that some legal circumstances make it possible for the established players to keep fresh competition out of public money streams or eat plenty of the private donor money (e.g., up to 49% for admin costs).
I'm sure this is true of a lot of charitable endeavors, but the health care charities are generally about getting medical teams on the ground and deploying desperately needed care.
It makes sense to route contributions to reputable charities. In the medical space, you have not only PIH but also organizations like Médecins Sans Frontières/DWB-USA. One of the very cool things about what Watsi is doing is that they provide a front end that routes contributions to multiple reputable on-the-ground health care providers, like PIH clinics.
As a member of the non-profit community (I help run GlobalGiving.org, one of the first non-profit crowdfunding platforms), we're actually doing the exact opposite. My first response to reading this? Sending Watsi an email letting them know that I've got 10 years of hard data on what works and what doesn't for motivating donors to give to specific projects and a standing invitation for me to share this knowledge with them.
At least within the tech non-profit world (GlobalGiving, Kiva, DonorsChoose.org, charity:water, etc) we're all very friendly and supportive of each other. We're so strapped for resources that it only makes sense for us to help each other out.
After all, we're all in this to make the world a better place and know that we can't do it alone.
We (masporloschicos.com) have been doing roughly the same since 2005. (instead of health we focus on malnutrition)
Note- site is in spanish - targeted to the Argentine audience
We are a bit less granular though - instead of matching against an individual, we match a specific soup kitchen. But we keep donors updated with newsletters, pictures, letters from the kids and so on.
edit: this level of udpates keeps donors engaged. we dont allow one time donations - instead we require you to subscribe.
When we built masporloschicos.com I wanted to do it more granular (individual level), but we ended up doing it a bit more aggregate because it was really hard / expensive to get to that granular level.
I wonder how is watsi tackling this problem - because ultimately you don't want to spend a lot of funds (regardless of where they come from) on the administration/bureaucracy required to provide quality 1:1 matching.
The issue of administration and bureaucracy is definitely one the best questions and hardest challenges for new startups trying to tackle these kinds of peer-connected problems. There are entire systems of middle-men built up over long periods of time that up until the internet have been how systems like medical treatment, education, and research funding operate. The biggest factor of inertia in these systems is the system itself.
Sites like Watsi are now making people realize two things: which inefficiencies we can cut away, and that simple experiences like funding medical treatment can be enhanced. Those are two very big revelations that will fuel so much of peer-to-peer funding.
Hablamos español and we tried to check out your site but it appears to be down (maybe because of HN traffic?). Two quick answers to your question about how we operate efficiently at a granular level:
1) We may have a slight advantage working in healthcare. Our partners already collect patient info (and sometimes even photos) for patient medical records, so requesting they send us that info isn't a big ask.
2) We leverage technology to ensure we can efficiently process and allocate donations. Look at kiva.org - they've leveraged their platform to fund individual microloans for nearly a million people, and that's a much more complex process (because of repayments, interest, currency conversion, etc.) than a one-way donation for a medical treatment.
Happy to talk more offline if there's any way I could be helpful: chase at watsi dot org.
Probably some of the US regulations would be relevant for US-based startups trying to develop and test the technology locally, even if it is to be used in 3rd world countries later.
I think this model of achieving more direct distribution through technology could profitably be applied to a number of for-profit and non-profit endeavors.
This seems like it could also be a better way of addressing hunger, contributing food to individuals but using a managed distribution system.
Watsi is awesome. Kiva and donorschoose made "direct" p2p lending/giving popular long ago, but Watsi is the first that feels like, well, a YC startup (just from the site-- product, team, mentality).
Also be sure to check out givewell.org for very HN-friendly (rational/research-driven) tips on how you might think about giving in general.
Really great project. Some thoughts:
1. In the interest of 100% transparency, what do you think about being 100% transparent with your tech? Would it make sense to open-source your technology stack?
2. I really wish you had the ability to donate on behalf of someone else, either to fund Watsi or to fund medical treatment. On Amazon I set up a wishlist that people can easily access for ideas of what to buy me on Christmas or my birthday. If I could set up something like that on Watsi instead, I probably would. And if your tech was open source, I might even implement the feature myself!
This is great. I did what you asked and used the site and it is indeed extraordinarily compelling. I might suggest a move away from Paypal (only because the Paypal checkout experience is more intrusive and annoying than the state of the art).
Our annual all-hands summit is next week, and we'll look for ways to work this into our charity match programs. Many people on HN have companies with employees; we were told about running charity matches by other friends who have companies and let me pass the message along: they work really well. Match programs have generated more goodwill for us than bonus programs. Start a match program!
I have a question:
The big charity in this space is Partners In Health, which has an extremely positive reputation (their cofounder is also now the President of the World Bank), spends 94% of their funding on program expenses, and has a CEO who makes less than 6 figures. (PIH is apparently a medical partner for Watsi).
Is the advantage of Watsi over PIH that 100% of funds go to program expenses, rather than 94%? Or is it that fine-grained funding is more compelling and will thus elicit more donations?
All of the treatments funded on Watsi are provided by our partner organizations (names listed on the patient profiles) and our first partner, Nyaya Health, is a Partners in Health clinic in Nepal.
So in short, the benefit of Watsi is both of those you described. 1) 100% of funds directly fund treatments and 2) those treatments are performed by great organizations like Nyaya.
Is there a kind of care I'd be funding using Watsi that I wouldn't be funding as effectively if I routed contributions directly to PIH?
Or is the big advantage to Watsi (from a 1000ft view) that it creates an especially compelling way to get people to contribute on-the-ground operating funds to places like PIH?
The latter is certainly a huge big deal, in case I sound skeptical. I'm just trying to refine my understanding of how all this stuff works.
You also have to take into account the amount of time it would take for PIH to deal with direct contributions. It's a non-trivial problem for these organizations to focus on that aspect when their core competency is to focus on the medical work they do. We've seen this a lot at Kiva where our partners are able to do things they could not have done otherwise because we are providing a source of funds that they don't have to devote resources towards, allowing for reaching new regions, providing different loan terms (for instance "bullet" loans for agriculture that pay off at the end and can be difficult for a small MFI to deal with), and for reach new groups of people with services, such as the completely unbanked.
That said Partners in Health seems to be a fairly robust organization and seems to have the donation handling and web presence problem solved, but Watsi is still providing a place to evangelize them to people who would otherwise never come across them.
Speaking of Kiva, is Watsi going to need volunteer translators? Kiva has a great program where people volunteer to translate loan applications into English, and excellent infrastructure to support it. (My wife has been a Kiva translator for a long time, and might be interested in translating for Watsi, since she specializes in Spanish to English medical documents.)
Well, it's funny, Viva is predominantly built on Drupal (which is open-source), though running D5. Then there is a heavy amount of customization on top of it, including hacking core. I inherited it 2 years ago when I came to work for Kiva and had to do a lot to get it to just stop breaking all the time. That said, actually two non-profits have asked to use it or have a similar functionality built for them, and I'm interested in doing something like that, but we'd have to de-couple all the Kiva specific stuff.
Really insightful question. With Nyaya Health (the PIH org) we're funding treatments they don't normally provide their patients (specialty referral care, think heart surgery and the like), so yes, there's a big difference between funding organizations directly and funding via Watsi.
Here's a link to the first patient we funded via Nyaya (http://www.flickr.com/photos/nyayahealth/8405959818/in/photo...). She had to take a 72-hour trip from Far Western Nepal to Kathmandu to receive life-saving heart surgery. This is a pretty expensive endeavor by Nepali standards ($1,125 USD), and without funding from an organization like Watsi, specialty care for individual patients like Bageshwori is out of the question.
If you're willing to fund overhead and give up the direct-to-recipient portion, you "should" contribute to PIH because nonprofits have a much easier time covering their program costs compared to overhead costs. Nobody wants to contribute to office supplies or fundraising costs, they're not sexy, even if necessary.
Of course, you should also support Watsi because as they succeed and drive a ton of extra contributions toward program-costs-only, even if there isn't enough existing overhead covered, there "should" be strategic donors who see this happening and decide to fund it.
This is all assuming Watsi's average partner is interchangeable with PIH, along with the treatments you'd be funding, which of course they aren't. Based on Chase's comment on Bageshwori, it may be very different-- it sounds like by directly funding PIH you'd be contributing to basic (though still potentially lifesaving) care through PIH, whereas with Watsi-via-PIH you have the option of (and often are?) contributing to more difficult, expensive, and perhaps otherwise-even-more-unavailable care.
One could think of this non-profit funding as YC's own charity donation. I like this type of donation much more than just hard cash. YC is committing what it does best, building great organizations around amazing teams. I wish more people, companies and orgs took this approach to donations.
Aside from the human connection mentioned in the post, by far the most compelling aspect to me is the "fixed" attribute. There's something so satisfying about isolating a problem, then fixing it.
Many charities feel like an investment. This feels like a transaction.
Edit: Here by transaction, I mean it's something that has a very high chance that it's working out. When I order a shirt online, there's a high probability it will get to me. When I fund a new t-shirt company on Kickstarter, it's less certain.
I agree on the point of transaction vs investment part of non-profit. CRY (http://america.cry.org/site/index.html) has been doing it for years for educating children and they are quite successful (what I've heard).
Overall our customer research has found that people find it a lot more compelling to give money to the individual than to hand money to an anonymous institution, even though on the backend it may be treated exactly the same.
Go and fund someone, and observe how a couple of minutes later you get the notification email that the funding is complete. This is a very powerful new thing.
I have an unimportant question. PG's post says "They even eat the credit card processing fees", but Watsi's FAQ says, "As part of the cost of the treatment, we have included PayPal credit card processing fees (2.9% + $0.30 per transaction). These PayPal fees are unavoidable, and no portion of the fees go to Watsi."
Good question. Also, PayPal fees are only unavoidable at PayPal. Would it be a conflict of interest, on pg's part, to include donations via bitcoins using Coinbase? If so, what if a competitor, such as BitPay, was used?
We're switching over to Stripe and they've been kind enough to hook us up with a better deal than PayPal (we'll be paying cost which is something like 2.4% flat, inclusive of Amex and international transactions, which constitute more than 30% of our total donations).
Was just about to ask about Stripe helping out a charity and fellow YCer. Awesome to here that they are hooking you guys up. Even with Paypal I already went through 4 donations or so, but Stripe would make the process even more addicting.
If you guys remember my credit card between donations and give me an account that will notify once a month (or so) of new patients, it'll actually become a problem for my bank account.
Sorry! This is our (Watsi's) fault. Everything pg said is entirely true.
When we first launched Watsi we had absolutely no operating budget and because of that we had to include credit card processing fees in the cost of treatment. We are now paying the credit card processing fees out of our own operating budget (see our Transparency Document for more info: https://docs.google.com/spreadsheet/pub?key=0Ah3wJ9CRQzyHdDZ...).
Thanks for catching this. We've updated our FAQ to reflect this change.
This is amazing. I love how they are moving so fast they simply publish results to a Google Doc spreadsheet.
This foreshadows an era where non-profits must aggressively publish their spending and compete on how lean they become. My guess is there are going to be a lot of niche sites that perform exactly like Watsi.
I really like the transparency - with a lot of nonprofits, I feel like I need to look into their expenditures to see where my donation is really going and to figure out if it's worthwhile. Watsi feels a lot more like kickstarter but directly targeted at helping individual people. Very cool idea.
How do they pay for operations costs - is there a separate donations channel?
The only suggestion I have is that it would be nice to see the patient's profiles get updated after being funded and treatment was given. We all like to see how our donations are making noticeable difference in people's lives.
I really like what Watsi is doing. They even "eat the credit card processing fees"
This is really great to see. I am just curious, how do they ensure that the funds are actually used for the intended person's health issues? How do you prevent scammers and posers who just want to get money? I have a bit of experience here and would say it is a non trivial problem if you do not have an operation on the ground. You could donate to organizations that you trust but then you get back to the same old problem: Distance from the human face and actual life you are impacting.
For those of you who want to donate to non health related issues there is also SeeYourImpact.org founded by Scott Oki, one of Microsoft's early execs. They also ensure 100% of the donation goes to the person and absorb all the overhead expenses.
Shameless plug: For our Hacker News Clone for African startus, business and technology we will be running ads for SeeYourImpact.org but strictly for educational needs. Check out the site here: http://AfriTech.org/about.htm
Actual news stories on front page: http://AfriTech.org
We prevent scammers by going through trusted organizations. The funds go directly to the organization that is providing treatment (i.e. the hospital or clinic), and never into the hands of the patient.
As well, patients aren't able to solicit Watsi funding. In fact, they don't even know we exist until a doctor at one of our partner organizations has identified them as a candidate and presents them with the opportunity to have their care funded by Watsi. You can think of us as an "Emergency Fund" for on-the-ground healthcare providers.
Is there any chance of expanding this to include Americans? Or even better - people that live near me, such as my zip code + the surrounding zip codes.
That way, there's at least a chance that I'd see the person that I helped someday.
Worth mentioning that patients in the US, and particularly children, are guaranteed medical care regardless of ability to pay. Medical care funding can bankrupt you in the US, but it cannot prevent you from having a broken femur fixed. States also run "CHIP" programs to provide health insurance coverage to children.
The same is not true in Haiti or Malawi. Without the funds to pay for care, a child can live for years --- their entire life, even --- with easily correctible medical conditions.
"guaranteed medical care" - of what quality, with what results? And the value of medical care being covered is that it doesn't destroy the rest of your life. It's actually kind of pointless to help someone just get to the point of surviving, and then leave them to fend for themself.
I just don't know how to respond to the idea that there's minimal value in removing infected bone fragments from a child's femur, and so I'm not going to pretend that there's a useful discussion you and I can have about this.
Not the situation I was insinuating. That child will not be left on their own, presumably they have a family who will care for them and help them get past it. In a situation where the person is just left to basic care, and has no other future care options is what I was referring to. I should have been more clear.
To me, it's plainly obvious that people in those other countries need our help more than people in the United States. What other concern is there? "I'd like to help people in MY country" is just a vaguely nationalistic bigotry.
It is not so obvious. There's a lot of suffering going on in your country too.
Charity comes from the heart, and where you should direct your love is your own choice. If you feel the people in your country are closer to you, there's no shame in helping them before others. We are human after all.
> If you feel the people in your country are closer to you
That's the nationalistic bigotry I was talking about. That's like saying if there was a charity that only helped white people, maybe I should contribute to that because I feel that people of European descent are "closer to me".
It is not bigotry, you are misinformed. Black people contributing to http://blackcharities.net/ are not bigots, they merely support those whose fate they identify with.
Sure, people are more likely to help those they identify with. That means they're more likely to ignore the plight of people they don't identify with. And that is bigotry. And criticizing a charity for not enabling that is also bigotry.
If you did that it could mean you're racist, the act of donating to such a cause doesn't make the act itself bigotry though IMHO. The intent behind a charity is what would be a determining factor for me - not in the end who it ends up helping, though that likely plays a role in most people's decisions.
There are some ways that I preferentially give to local people because it's easier. I've helped more street beggars in my neighborhood than in Port au Prince because I don't walk down the streets of Port au Prince.
But when it comes to paying for perfect strangers to receive medical treatment, and I'm choosing between someone in the US, whose medical treatment costs more, and who will receive the medical treatment anyway at the risk of personal bankruptcy, vs. someone who wouldn't receive the treatment at all in Port au Prince, you can't make an argument that I should give to the American. The American will get the treatment with or without my help. He might just end up bankrupt, but being bankrupt in America is not that bad. In fact, there's a good chance there will be no bankruptcy and the American will just have to go on a payment plan for the next few years. The Haitian won't receive the treatment at all. In fact, even after the treatment, the Haitian will still have to live in Haiti, which is probably a materially poorer existence than being bankrupt or having to make a payment plan in America.
Providing less help to someone who is in lesser need of it at greater expense, just because you share a nationality with them, is bigotry, and you've said nothing to refute that.
The question is does giving your money directly to a street person help them more than giving it to a shelter so there are more places for people to sleep at night, and healthy food for them - or is it just faster and stronger gratification / reward for you? Not saying this as a put-down.
Well you can downvote me all you like, but it's just not bigotry. Merriam-Webster defines bigotry as the state of mind of "one who regards or treats the members of a group (as a racial or ethnic group) with hatred and intolerance".
This is just not the case, so first of all you are wrong.
And second of all, that you think one should spend his charity with maximum (perceived) efficiency is just _your_ ethical view.
I give charity to the Dutch cancer battle fund. I don't do this to save anyone I love, they are either already dying of cancer and won't be helped because of my donation or have already died.
A majority of people will never live to die of cancer. It is a disease that kills rich healthy people. Yet I give as much to them as I give to unicef. It is because the disease hits close to home.
Anyway, that might make me an egoist. But not a nationalist bigot. And frankly I think it was hateful of you to introduce those slurs into this conversation.
What's hateful is criticizing Watsi for not letting you donate money to people who don't need the money as badly on the basis that you'd rather help people in your own country.
I agree with all you said, but here is one additional point: per dollar, you can fund a lot more outside of the US than you can inside. Those $1000 surgeries in Cambodia would cost far more here. You have to decide if you want to use your $5000 to help 5 people in poorer nations or 1/2 of a person in the US.
There are millions and millions of people, tens of millions in North America, that aren't taken care of well or properly. Fixing people when they're bad enough to absolutely need help or they'll die, otherwise letting them suffer, isn't a great attitude to have; Not saying that is your attitude, though it's what our culture currently has in place.
Except it isn't. That's the whole problem--people have natural ingroup/outgroup biases where the suffering and death of people in groups they identify with is given more weight. Wars are criticized, not on the basis of the hundreds or thousands of foreign civilian casualties, but on the basis of thousands of military casualties suffered by our own side. National law is reevaluated on the basis of American children dying in a shooting, but Middle Eastern children dying in a drone strike go ignored. People would rather donate money to save an American from financial hardship than to save a Haitian from death or lifelong crippling, implicitly leaving the Haitian to suffer and die.
To some extent this is just human nature. But it's a problem that people think this way, and I would prefer to solve this problem than exacerbate it.
I'm personally not a fan of the concept of donating to help a specific person, rather than a cause, but am unsure whether I'm a rare exception or whether many people have the same view as me - hopefully a few replies could help answer this?
When I say not a fan of the concept, I absolutely don't mean I disapprove. I don't have any problem with organisations raising money this way, nor with people choosing to donate money this way - I simply don't like donating myself.
Trying to chose between fighting HIV or starvation, cancer or... etc. etc. is hard enough. Looking at Watsi's homepage, does Chimwemwe from Malawi deserve my money more than Kirshan from Nepal? What about Lidiya from Malawi? I can see the point of view that it's nice to know your money has definitely made an impact on somebody's life, but personally I don't enjoy the burden of making that decision. I'd far rather be 0.0000000001% of a big solution than 100% of a small one when it comes to charitable donations.
All that said, the fact that I dislike it doesn't take anything away from my thinking that Watsi looks like a great site, my opinion doesn't change the fact that anyone raising money for good causes is great and if the method used here helps that then no complaints from me.
Great point. It's all about personal opinion. There are currently tons of organizations that enable people to fund a cause, but nearly none that let you fund something as specific as an individual treatment. We're providing a new, more direct and transparent, alternative.
Oftentimes there is institutional support for specific "mainstream" conditions (e.g. HIV, TB, etc.) and as a result, some patients who are in unique situations (e.g. have a rare condition, need a slightly expensive treatment, need referral care, etc.) often fall through the cracks. Watsi provides an opportunity to those patients by enabling them to tap into the crowd.
While there are pros and cons to each approach, it's important to note that they are complementary. Charitable giving is not a zero sum game, and we're working hard to expand the pie, not take a piece of it.
I wonder if everyone who has come across both options (broad vs. specific) choses one and sticks with that, or whether some people like both and split their donations?
While you'd obviously always prefer to expand the pie rather than just take a piece, there's nothing wrong with the latter - like you said, your approach can help people who slip through the gaps, so even if the pie doesn't expand, your taking a piece of it can still be a good thing.
Great insight. We're in the process of creating a "General Fund" on Watsi to help us answer that very question.
Donors that are interested in maximizing impact, and not necessarily interested in helping a specific person, can give to that fund. We'll then use those donations to support organizational projects (e.g. $1 vaccinations and the like).
We're considering leveraging an organization like GiveWell to help us identify organizations and projects that will be beneficiaries of the general fund.
I'm the exact opposite, which is why I love Watsi and have donated even though I've never been a donating kind of person. I don't like giving money to something that feels abstract, where I don't really know how the money is being used for. I think what makes Watsi compelling is that we are supporting individual, specific people; solving a concrete, easily solvable problem (as opposed to, say, hunger, which requires more long term support); and lastly, the solution is low-cost, as opposed to hundreds of thousands or millions of dollars. The combination of these three factors is what I think makes Watsi a winning recipe that will entice people like myself who have always wanted to give but never felt comfortable with the current options of donation.
If you use the logic that it doesn't matter because other people will donate, that leaves me clear of ever donating to charity, safe in the knowledge that other people have got it covered. What a relief!
In Slovakia (a small EU country) we have a non-profit called "Dobry anjel" (Good angel) which helps families of children sick with cancer and other serious diseases. It is also collects donations, is separately funded and distributes all the donations "up to the last cent". Two possibly interesting tidbits: 1) The organization has re-distributed almost 17 million euros since its inception in 2006 (this is 23 mil. USD, over half a million USD in the last month alone -- our population is about the same as Minnesota), 2) Its co-founder Andrej Kiska is planning to run for president of Slovakia next year.
EDIT: Note on transparency: all the donors have their own website login information ("angel ID") to track every donation and see exactly how much was sent to whom. The stories of recipient families are provided, along with their address + telephone number. The donors have an option to remain anonymous or reveal their contact information. I never contacted any recipients or revealed my name to them but I have heard stories where the donors and families in distress got in touch and supported each other with prayers, encouragements, etc.. "Good angel" also makes it possible to keep sending donations to the same families if you choose to (otherwise the families will be chosen at random, which is the default choice -- or at least was the default for me when I signed up in 2007).
On one hand, I love it that I was able to donate to a person, and Watsi didn't require a login, email etc. (though I guess they have my email from the Paypal payment).
But this is one of the sites where a login would probably be a good idea, so that I can keep track of my donations and particularly the status/health updates of those whom I am helping, and also potentially for tax purposes.
Another site on these lines which I like a lot is Kiva.org (no affiliation, just a user). It's micro-finance, not donations, but all 3 people whom I lent to on Kiva, have paid me back so their enterprise has presumably succeeded. It feels great to be able to help some poor villager in Africa buy some fertilizers or a cow, and I like how Kiva makes it easy to keep track of them :)
Update: Watsi just emailed me a receipt that I can use for tax purposes, and promised to send me a email when the person I donated to receives treatment. So I take back my minor complaint above!
This is a great suggestion. We do send updates to all donors, but as soon as we integrate Stripe we're going to enable optional user accounts. These accounts will enable us to create new features like one-click donation checkout, recurring donations, and a donation history so you can easily view all the patients you've helped support. If you have any other ideas, please let us know!
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[ 2.5 ms ] story [ 165 ms ] thread(This is not meant to sound negative. I am truly excited to see it, interested to see what the YC network can bring to it, and very curious about the investment thinking behind it.)
Hopefully it'll quickly join the ranks of the larger crowdfunding non-for-profits like Kiva.org, Donorschoose, etc...
I could see this being a good way to help new non-profits get over the initial hump of raising awareness, getting administrative issues sorted out and so on. Certainly a service worth more than just the money provided.
The model of charityfund-operationsfunding separation is quite enticing. This kind of transparency fosters trust. If they ask for donations on the side to keep their operations running, by golly they've got access to my wallet alright.
"At Watsi, 100% of your donations directly fund medical treatments. Watsi.org is separately funded. They pay all their operational costs from their own funding, and none from your donations. They even eat the credit card processing fees."
This works great with Watsi's crowdfunding-style model. It probably wouldn't help with things which need legs on the ground full-time, but it would be interesting to see more nonprofits looking at an "out of channel" donor model.
P.S. If you haven't clicked through to read PG's announcement and check out Watsi, go do so. Really. This is something YC is going to look back on and be proud of being part of 20 years from now.
https://watsi.org/faq
"At Watsi, 100% of your donations directly fund medical treatments. Watsi.org is separately funded. They pay all their operational costs from their own funding, and none from your donations. They even eat the credit card processing fees."
It doesn't sound (as) cool me if the founders can only do this until they go broke. It looks like they do accept direct donations to fund their operating costs, but it seems to me that the demand (if that's the right word for the desire to donate) might not increase at the same rate as the demand to fund treatments (and therefore costs for credit card fees, hosting, staff) increases. Better to take a percentage and be transparent about what you use it for.
YC is working on addressing the problem of funding Watsi's overhead. The point of the service is that end-users don't fund Watsi, they fund patients. In the same sense as you need to take it sort of on faith that Airbnb can bootstrap and maintain a two-sided market for short-term lodging, you should probably take it on faith that Watsi's model is going to work; if you want to make Watsi work well, go fund a patient with it.
There is a real 13 year old girl on Watsi right now who is unable to walk because of a correctible congenital condition. Who cares about the Watsi founders? Go help the girl! :)
I think the point is not that people particularly care about the Watsi founders; but rather, that they care about the hundreds of thousands of other girls whom Watsi won't be able to help if Watsi and/or its founders go bankrupt because they lack a sustainable funding model.
Note, that comes across as snarky via text, but it's not meant to be. I'm just explaining my way of thinking about it. :)
Also, it is entirely possible to donate and also have this discussion, so you may very well be talking to people who both help present needs and express concern for potential unmet future needs.
On the one hand, I see your point, and I went and helped a little girl (as it happens, a different one). Maybe it doesn't need to be sustainable. It sounds like they've got it covered for now, and if they "only" help a few hundred people before they have to look for other work, that's pretty good.
On the other hand, I don't think it's off-topic to comment on the viability of a business model on a forum about startups. I know it's working in practice, but can it work in theory? :)
However, we feel very strongly that Watsi should be run like a successful startup, and not like a traditional non-profit.
Sustainability is extremely important to us. I'm a terrible fundraiser, and I want nothing more than for us to cover our own overhead.
However, it just doesn't make sense to implement revenue generating features (e.g. take a cut of donations, which to be clear we will never do) until we hit scale. Right now, we're entirely focused on improving our product, speaking with donors, and maximizing our impact.
However, just like any successful startup, there will (hopefully) come a time when the costs associated with scale begin to outstrip the seed-support we've so generously received from people like pg and Jessica. When that happens, we will implement features that generate revenue for our organization, and we'll have a user base large enough to make those features viable.
Without going into too much detail, those features will include things like asking donors for an optional "tip" to Watsi when giving to a patient (expected to net 6-8%), cause marketing products (already a few companies interested), white label, etc.
We will never abandon the 100% model, and I'm completely confident that for as long as there is demand for the service we're offering, we'll find a way to cover our overhead.
Kudos for taking the leap Watsi!
Also, I like the "tip" idea.
Why? Fundraising to cover your overhead costs when you're small is relatively easy but comes increasing harder year after year as you grow.
The reason most non-profits take a portion of donations for overhead costs is so that they can keep the lights on and (hopefully) become better at providing their services more efficiently. Moderate overhead percentages are not a bad thing for non-profits. As a donor you should want the organization that you're supporting to have a way to pay their bills, investing in productivity improvements, and build scale.
I applaud Watsi's commitment to passing 100% of donations onto patients and I'm cheering them on to find a sustainable funding model over the long run.
For example, given charities X and Y both distributing anti-malaria pills (or something). X and Y are identical except X has operating overheads of 80%, and distributes 50 pills per dollar donated and Y has no operating overhead, but only manage 20 pills per dollar donated.
Clearly X is the better charity, since it moves more pills, even though only 20% of the donations it receives get through.
What I'm trying to say is: operating overhead is a poor metric for comparing charities, since the thing that matters is the final outcome given a certain donation amount.
(That said having a high overhead is probably a sign that a charity could improve, and so do more good per dollar.)
My guess is that they would come up with many arguments against this startup-ish approach and would lobby for legal barriers.
Charities are not going to lobby against Watsi.
This is a POV from Germany where you have a wealthy population willing to donate and many sharks eager to catch the fish. Add to this that some legal circumstances make it possible for the established players to keep fresh competition out of public money streams or eat plenty of the private donor money (e.g., up to 49% for admin costs).
It makes sense to route contributions to reputable charities. In the medical space, you have not only PIH but also organizations like Médecins Sans Frontières/DWB-USA. One of the very cool things about what Watsi is doing is that they provide a front end that routes contributions to multiple reputable on-the-ground health care providers, like PIH clinics.
At least within the tech non-profit world (GlobalGiving, Kiva, DonorsChoose.org, charity:water, etc) we're all very friendly and supportive of each other. We're so strapped for resources that it only makes sense for us to help each other out.
After all, we're all in this to make the world a better place and know that we can't do it alone.
So good luck Watsi and you've got my email. :)
Note- site is in spanish - targeted to the Argentine audience
We are a bit less granular though - instead of matching against an individual, we match a specific soup kitchen. But we keep donors updated with newsletters, pictures, letters from the kids and so on.
edit: this level of udpates keeps donors engaged. we dont allow one time donations - instead we require you to subscribe.
When we built masporloschicos.com I wanted to do it more granular (individual level), but we ended up doing it a bit more aggregate because it was really hard / expensive to get to that granular level.
I wonder how is watsi tackling this problem - because ultimately you don't want to spend a lot of funds (regardless of where they come from) on the administration/bureaucracy required to provide quality 1:1 matching.
So I just wonder how are they doing it?
Sites like Watsi are now making people realize two things: which inefficiencies we can cut away, and that simple experiences like funding medical treatment can be enhanced. Those are two very big revelations that will fuel so much of peer-to-peer funding.
1) We may have a slight advantage working in healthcare. Our partners already collect patient info (and sometimes even photos) for patient medical records, so requesting they send us that info isn't a big ask.
2) We leverage technology to ensure we can efficiently process and allocate donations. Look at kiva.org - they've leveraged their platform to fund individual microloans for nearly a million people, and that's a much more complex process (because of repayments, interest, currency conversion, etc.) than a one-way donation for a medical treatment.
Happy to talk more offline if there's any way I could be helpful: chase at watsi dot org.
"Thank You HN: From 30 people whose lives you saved" http://news.ycombinator.com/item?id=4815006
"Show HN - We just built a site that saves lives" http://news.ycombinator.com/item?id=4424081
I think this model of achieving more direct distribution through technology could profitably be applied to a number of for-profit and non-profit endeavors.
This seems like it could also be a better way of addressing hunger, contributing food to individuals but using a managed distribution system.
What a cool idea :).
Also be sure to check out givewell.org for very HN-friendly (rational/research-driven) tips on how you might think about giving in general.
2. I really wish you had the ability to donate on behalf of someone else, either to fund Watsi or to fund medical treatment. On Amazon I set up a wishlist that people can easily access for ideas of what to buy me on Christmas or my birthday. If I could set up something like that on Watsi instead, I probably would. And if your tech was open source, I might even implement the feature myself!
Our annual all-hands summit is next week, and we'll look for ways to work this into our charity match programs. Many people on HN have companies with employees; we were told about running charity matches by other friends who have companies and let me pass the message along: they work really well. Match programs have generated more goodwill for us than bonus programs. Start a match program!
I have a question:
The big charity in this space is Partners In Health, which has an extremely positive reputation (their cofounder is also now the President of the World Bank), spends 94% of their funding on program expenses, and has a CEO who makes less than 6 figures. (PIH is apparently a medical partner for Watsi).
Is the advantage of Watsi over PIH that 100% of funds go to program expenses, rather than 94%? Or is it that fine-grained funding is more compelling and will thus elicit more donations?
So in short, the benefit of Watsi is both of those you described. 1) 100% of funds directly fund treatments and 2) those treatments are performed by great organizations like Nyaya.
Or is the big advantage to Watsi (from a 1000ft view) that it creates an especially compelling way to get people to contribute on-the-ground operating funds to places like PIH?
The latter is certainly a huge big deal, in case I sound skeptical. I'm just trying to refine my understanding of how all this stuff works.
Congratulations on all of this.
That said Partners in Health seems to be a fairly robust organization and seems to have the donation handling and web presence problem solved, but Watsi is still providing a place to evangelize them to people who would otherwise never come across them.
Here's a link to the first patient we funded via Nyaya (http://www.flickr.com/photos/nyayahealth/8405959818/in/photo...). She had to take a 72-hour trip from Far Western Nepal to Kathmandu to receive life-saving heart surgery. This is a pretty expensive endeavor by Nepali standards ($1,125 USD), and without funding from an organization like Watsi, specialty care for individual patients like Bageshwori is out of the question.
Of course, you should also support Watsi because as they succeed and drive a ton of extra contributions toward program-costs-only, even if there isn't enough existing overhead covered, there "should" be strategic donors who see this happening and decide to fund it.
This is all assuming Watsi's average partner is interchangeable with PIH, along with the treatments you'd be funding, which of course they aren't. Based on Chase's comment on Bageshwori, it may be very different-- it sounds like by directly funding PIH you'd be contributing to basic (though still potentially lifesaving) care through PIH, whereas with Watsi-via-PIH you have the option of (and often are?) contributing to more difficult, expensive, and perhaps otherwise-even-more-unavailable care.
If you're feeling generous, support both :)
(PIH spends a remarkably high 94% of its donations on program expenses, fyi: http://www.charitynavigator.org/index.cfm?bay=search.summary..., though there's long been a philanthropy-wide consensus that over-focusing on overhead is common and unhelpful: http://blog.givewell.org/2009/12/01/the-worst-way-to-pick-a-...)
Many charities feel like an investment. This feels like a transaction.
Edit: Here by transaction, I mean it's something that has a very high chance that it's working out. When I order a shirt online, there's a high probability it will get to me. When I fund a new t-shirt company on Kickstarter, it's less certain.
Overall our customer research has found that people find it a lot more compelling to give money to the individual than to hand money to an anonymous institution, even though on the backend it may be treated exactly the same.
I have an unimportant question. PG's post says "They even eat the credit card processing fees", but Watsi's FAQ says, "As part of the cost of the treatment, we have included PayPal credit card processing fees (2.9% + $0.30 per transaction). These PayPal fees are unavoidable, and no portion of the fees go to Watsi."
Who is right?
When we first launched Watsi we had absolutely no operating budget and because of that we had to include credit card processing fees in the cost of treatment. We are now paying the credit card processing fees out of our own operating budget (see our Transparency Document for more info: https://docs.google.com/spreadsheet/pub?key=0Ah3wJ9CRQzyHdDZ...).
Thanks for catching this. We've updated our FAQ to reflect this change.
This foreshadows an era where non-profits must aggressively publish their spending and compete on how lean they become. My guess is there are going to be a lot of niche sites that perform exactly like Watsi.
How do they pay for operations costs - is there a separate donations channel?
I really like what Watsi is doing. They even "eat the credit card processing fees"
For those of you who want to donate to non health related issues there is also SeeYourImpact.org founded by Scott Oki, one of Microsoft's early execs. They also ensure 100% of the donation goes to the person and absorb all the overhead expenses.
Shameless plug: For our Hacker News Clone for African startus, business and technology we will be running ads for SeeYourImpact.org but strictly for educational needs. Check out the site here: http://AfriTech.org/about.htm Actual news stories on front page: http://AfriTech.org
As well, patients aren't able to solicit Watsi funding. In fact, they don't even know we exist until a doctor at one of our partner organizations has identified them as a candidate and presents them with the opportunity to have their care funded by Watsi. You can think of us as an "Emergency Fund" for on-the-ground healthcare providers.
That way, there's at least a chance that I'd see the person that I helped someday.
The same is not true in Haiti or Malawi. Without the funds to pay for care, a child can live for years --- their entire life, even --- with easily correctible medical conditions.
Charity comes from the heart, and where you should direct your love is your own choice. If you feel the people in your country are closer to you, there's no shame in helping them before others. We are human after all.
That's the nationalistic bigotry I was talking about. That's like saying if there was a charity that only helped white people, maybe I should contribute to that because I feel that people of European descent are "closer to me".
But when it comes to paying for perfect strangers to receive medical treatment, and I'm choosing between someone in the US, whose medical treatment costs more, and who will receive the medical treatment anyway at the risk of personal bankruptcy, vs. someone who wouldn't receive the treatment at all in Port au Prince, you can't make an argument that I should give to the American. The American will get the treatment with or without my help. He might just end up bankrupt, but being bankrupt in America is not that bad. In fact, there's a good chance there will be no bankruptcy and the American will just have to go on a payment plan for the next few years. The Haitian won't receive the treatment at all. In fact, even after the treatment, the Haitian will still have to live in Haiti, which is probably a materially poorer existence than being bankrupt or having to make a payment plan in America.
Providing less help to someone who is in lesser need of it at greater expense, just because you share a nationality with them, is bigotry, and you've said nothing to refute that.
This is just not the case, so first of all you are wrong.
And second of all, that you think one should spend his charity with maximum (perceived) efficiency is just _your_ ethical view.
I give charity to the Dutch cancer battle fund. I don't do this to save anyone I love, they are either already dying of cancer and won't be helped because of my donation or have already died.
A majority of people will never live to die of cancer. It is a disease that kills rich healthy people. Yet I give as much to them as I give to unicef. It is because the disease hits close to home.
Anyway, that might make me an egoist. But not a nationalist bigot. And frankly I think it was hateful of you to introduce those slurs into this conversation.
To some extent this is just human nature. But it's a problem that people think this way, and I would prefer to solve this problem than exacerbate it.
When I say not a fan of the concept, I absolutely don't mean I disapprove. I don't have any problem with organisations raising money this way, nor with people choosing to donate money this way - I simply don't like donating myself.
Trying to chose between fighting HIV or starvation, cancer or... etc. etc. is hard enough. Looking at Watsi's homepage, does Chimwemwe from Malawi deserve my money more than Kirshan from Nepal? What about Lidiya from Malawi? I can see the point of view that it's nice to know your money has definitely made an impact on somebody's life, but personally I don't enjoy the burden of making that decision. I'd far rather be 0.0000000001% of a big solution than 100% of a small one when it comes to charitable donations.
All that said, the fact that I dislike it doesn't take anything away from my thinking that Watsi looks like a great site, my opinion doesn't change the fact that anyone raising money for good causes is great and if the method used here helps that then no complaints from me.
Oftentimes there is institutional support for specific "mainstream" conditions (e.g. HIV, TB, etc.) and as a result, some patients who are in unique situations (e.g. have a rare condition, need a slightly expensive treatment, need referral care, etc.) often fall through the cracks. Watsi provides an opportunity to those patients by enabling them to tap into the crowd.
While there are pros and cons to each approach, it's important to note that they are complementary. Charitable giving is not a zero sum game, and we're working hard to expand the pie, not take a piece of it.
While you'd obviously always prefer to expand the pie rather than just take a piece, there's nothing wrong with the latter - like you said, your approach can help people who slip through the gaps, so even if the pie doesn't expand, your taking a piece of it can still be a good thing.
Keep up the good work.
Donors that are interested in maximizing impact, and not necessarily interested in helping a specific person, can give to that fund. We'll then use those donations to support organizational projects (e.g. $1 vaccinations and the like).
We're considering leveraging an organization like GiveWell to help us identify organizations and projects that will be beneficiaries of the general fund.
EDIT: Note on transparency: all the donors have their own website login information ("angel ID") to track every donation and see exactly how much was sent to whom. The stories of recipient families are provided, along with their address + telephone number. The donors have an option to remain anonymous or reveal their contact information. I never contacted any recipients or revealed my name to them but I have heard stories where the donors and families in distress got in touch and supported each other with prayers, encouragements, etc.. "Good angel" also makes it possible to keep sending donations to the same families if you choose to (otherwise the families will be chosen at random, which is the default choice -- or at least was the default for me when I signed up in 2007).
But this is one of the sites where a login would probably be a good idea, so that I can keep track of my donations and particularly the status/health updates of those whom I am helping, and also potentially for tax purposes.
Another site on these lines which I like a lot is Kiva.org (no affiliation, just a user). It's micro-finance, not donations, but all 3 people whom I lent to on Kiva, have paid me back so their enterprise has presumably succeeded. It feels great to be able to help some poor villager in Africa buy some fertilizers or a cow, and I like how Kiva makes it easy to keep track of them :)
Update: Watsi just emailed me a receipt that I can use for tax purposes, and promised to send me a email when the person I donated to receives treatment. So I take back my minor complaint above!