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In Running Like A Startup, Nonprofits Find Success

When in its 2013 batch of startups, it was a first for the accelerator. The hypothesis was that many newly funded nonprofits could benefit from the same techniques it used to help startups.

Since then, Mountain View, Calif.-based Y-Combinator 25 nonprofit startups in diverse spaces including global health, poverty alleviation, democracy, and philanthropy itself. Nonprofits get $100,000 of no-equity funding (in the form of a grant) and go through the standard YC program, participating side by side with for-profits. The accelerator helps founders focus on growing a key metric 鈥渁nd on making something people want.鈥

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The program has even attracted nonprofits that have been around for decades. In 2017, the 聽97-year-old American Civil Liberties Union (ACLU) when it participated in Y-Combinator鈥檚 program in an effort to more efficiently handle its recent quadrupling of members.

In general, as more investment firms look toward impact investing, we thought it would be interesting to hear directly from some of the nonprofit organizations that have participated in Y-Combinator鈥檚 program. All would recommend it to other nonprofits, and each got something unique yet similar from the experience.

Here鈥檚 what they had to say.

80,000 HOURS

The most effective way to grow is to improve the product

provides career advice for young people who want to have a social impact.

Co-founders and founded 80,000 Hours in 2011 while students at Oxford University. MacAskill鈥攏ow a professor at Oxford鈥攈ad co-founded, a charity evaluator that has raised over $400 million in pledged donations to effective charities.

The nonprofit, which ultimately moved its headquarters to Berkeley, Calif., has developed an online career guide, as well as supporting tools and advice. It also offers workshops and links to a global community of others also seeking high-impact careers.

80,000 Hours went through the YC program in the summer of 2015. It had applied once before but was rejected because its 鈥渋dea wasn鈥檛 clear enough,鈥 according to Todd.

For Todd, the experience of going through the program and getting feedback from partners was far different from reading advice online.

鈥淚t really helped us start applying ideas to our own organization,鈥 he said.

For one, it took to heart YC鈥檚 notion of not hiring too much early on.

鈥淚 think many people find that, contrary to other advice they鈥檝e heard, hiring should be one of the first priorities,鈥 Todd said. 鈥淏ut they pointed out the most effective way to grow is to improve the product and answer the big questions of how your organization works. The premise is that hiring slows you down because you鈥檙e focusing more on managing people than answering key questions.鈥

YC also encourages its cohorts to focus on one key metric and growing it every week. At first, 80,000 Hours was focused on growing its newsletter subscribers with the goal of surveying them later. But it ended up focusing on what Todd describes as measuring significant plan change 鈥攐r someone switching from one career path to another because of the nonprofit.

鈥淲e鈥檝e probably grown ten-fold since then,鈥 Todd said. 鈥淲e鈥檝e seen 1400 plan changes over the last 12 months and 3,000 over our whole history. Back in 2014, before we participated in the YC program, we had just 75.鈥

80,000 Hours biggest donor thus far has been the, but it hasn鈥檛 really attracted donors as a result of its YC connection. However, the name has helped when hiring.

In general, Todd believes the YC program is less useful for a nonprofit who does advocacy or research.

鈥淚t鈥檚 better for an organization with some kind of a product or user,鈥 he said. 鈥淎 bunch of the advice and general mindset is really useful. And I鈥檝e heard of their help on the tech side of things really helping other groups cut their costs quite dramatically.鈥

New Story Charity

We believe how nonprofits think, their culture, and how they solve problems and use technology shouldn鈥檛 be different because you鈥檙e a nonprofit

builds homes and communities of homes in the developing world, specifically in Haiti and El Salvador. The San Francisco-based nonprofit will build a 300-home community and charge $6,000 per home. Families pay a no-interest mortgage that goes into a community fund to pay for other initiatives in the community, such as another home for another family.

鈥淚t鈥檚 a kind of pay-it-forward program,鈥 said CEO.

The nonprofit has built an online crowdfunding site so donors could see families, their pictures, and read their story. All the money provided by donors goes directly to the family toward building a new home (which is built by local workers). A small group of private donors cover all the organization鈥檚 overhead costs. Currently, there are about 30 donors that make up the organization called The Builders. Each donor commits to donating a minimum of $25,000 a year for three years. YC鈥檚 grant also went toward hiring and overhead.

鈥淲e were able to hire excellent team members to build out new software programs,鈥 Hagler said.

Hagler once ran a for-profit company, so he was familiar with Y Combinator.

鈥淥ur narrative is not only to help families in extreme poverty with their basic needs and shelter,鈥 he told 附近上门 News. 鈥淲e also had the goal of trying to freshen up and modernize how to use technology and innovation as a nonprofit, and that鈥檚 what attracted us to Y Combinator.鈥

New Story wasn鈥檛 treated at all differently from the for-profits in the accelerator鈥檚 program, according to Hagler.

鈥淭hat was the best part of it,鈥 he said. 鈥淲e went through the same programming as and. We believe how nonprofits think, their culture, and how they solve problems and use technology shouldn鈥檛 be different because you鈥檙e a nonprofit. That was part of their ethos as well.鈥

When New Story went through the YC program during the summer of 2015, it built 100 houses in just 91 days. Since then it has constructed 1400 homes in 11 different villages.

Hagler believes that participating in the YC program opened up avenues of capital for the nonprofit.

鈥淲e鈥檝e since received funding from the venture capital community or tech executives,鈥 he said. 鈥淚t certainly opened doors for us although it was up to us how we made the most of initial opportunities.鈥

New Incentives

The recommendations of the YC partners were incredibly helpful

encourages poor mothers in Northern Nigeria to vaccinate their infants against deadly diseases. The San Francisco-based organization gives women small incentives that cover their transportation to the clinic and any loss of income resulting from the visit.

It participated in the YC program in the summer of 2016.

Co-founder said his nonprofit considered the YC program 鈥渢he best program鈥 to help startups scale and it lived up to New Incentives鈥 expectations.

鈥淭he recommendations of the YC partners were incredibly helpful,鈥 he wrote via email. 鈥淭hese are experienced and smart advisors that immediately get to the core of your organization’s challenges. They also teach you how to relentlessly focus on one key progress metric and ignore the many distractions a startup faces.鈥

Overall, he said the lessons of scaling a company are very similar to those of scaling a nonprofit.

鈥淲e benefited a lot from the business advice,鈥 Stadler said. 鈥淚n addition, we enjoyed exchanging lessons learned with our fellow few nonprofits.鈥

Specifically, he added, the YC partners encouraged the group to focus on growing its program鈥攁llowing it to scale from a few to a dozens of clinics throughout Nigeria.

鈥淭he number of clinics and beneficiaries served became our razor sharp focus and all our activities were going towards that goal,鈥 Stadler said.

Participating in the program, Stadler believes, also helped open doors to raising additional capital. The organization has received 鈥渟ubstantial鈥 donations from YC, Twitter co-founder, and VC.

But its main supporter continues to be the charity evaluator. That relationship started before New Incentives participated in the YC program.

Stadler would recommend the program to all charities but especially encourages those with evidence-based and cost-effective programs in developing countries 鈥渢hat save the most lives at the lowest cost鈥 to apply.

Moving forward, as more investors look toward putting money into organizations and companies that make a social impact, nonprofits are in a better position than ever to scale and grow in a way similar to for-profit companies. And Y-Combinator has helped pave the way for nonprofits who want to operate like startups.

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