Y Combinator's first graduating nonprofit is about to get an impressive donation round. Watsi is a crowdfunding site for surgical procedures in the third world whose founder, Chase Adam, promises radical transparency and low overhead for medical donations. The site, which launched nine months ago, has already solicited 6,000 donations from 3,200 different users. Adam's organization has now received $1.1 million in donations in what it calls a "philanthropic seed round."
In a telephone conversation, Adam told Fast Company Watsi transfers 100% of the money from donations to medical care for its selected patients, and even covers credit card processing costs. Watsi also puts details of all its financial disbursements on Google docs. At press time, their site is accepting donations for seven patients; in the past, Watsi collected funds for more than 50 others. Patients are selected through the nonprofit's partner organizations, which actually conduct the surgery in the field. The organizations operate in multiple continents around the world.
Even though it is a nonprofit, Watsi pitches itself to donors as an organization run by startup principles. Donors in the $1.1 million seed round include both Y Combinator and Y Combinator founder Paul Graham, super-VCs Vinod Khosla and Ron Conway, and the Draper Richards Kaplan Foundation. The round of funding is meant to subsidize Watsi over the next 18 months.
In the future, the big challenge for Watsi will be scaling out its operations to a larger scale. The concept of running a nonprofit organization along startup lines is revolutionary, but it also lacks precedent or roadmaps—the only organizations to walk that line before have been Kiva and a handful of others. But if Watsi succeeds in making the model viable, stay tuned for many more.
Will Watsi be on the next list of the World's Most Innovative Companies?