Ask YC: Nonprofit funding

https://news.ycombinator.com/item?id=197228

by ssharp • 18 years ago

19 18 18 years ago

news.ycombinator.com

I work for a non-profit and we are always wanting to extend ourselves and offer more innovative and useful services online. However, we run into funding a lot of our current income is just covering current expense and we have to rely on grants or making free time for most new web related initiatives. We do have campaigns to reach out to high-income supporters but a lot of them don't really understand web projects.

I was wondering if anyone had experience in raising money from technology investors or others who do understand technology and might be interested in donating to non-profit web projects. I'm just looking for any basic information or experience this community might have!

ideas101• 18 years ago

from what i know VCs are investors and not donors - they want something in return (always) ... nevertheless you may find few VCs who may want to donate on personal basis. OR you may want to tweak your business/charity model where investors get something, like (90:10 charity:business) model. Also big VCs might have some % of profit spent on charity just to give back to the society, for that you need to contact all big players. The best idea is to get couple of VCs/angels on your management team (or board) - they will raise more funds (just by making couple of phone calls) than you can ever get it by knocking doors for the whole year.

EDIT: the another idea is to put "Donate" button (asking users to donate by credit card) on almost all the web pages - more the people use your service the more the donation coming in. you may also raise some money by putting ads (text and display, related to your service) on the web pages, for example if you're providing online service related to health care then you can get advertisers from health industry (or if u want to keep it simple then use Google's and Yahoo's ad services).

popat• 18 years ago

i like the idea of having wealthy people on board - i have personally experienced that this helps a lot ... also this will create awareness amongst the hi-society people, who sometime just for the sake of status give donations to the same cause/organization.

bmaier• 18 years ago

Use http://ThePoint.com !

blender• 18 years ago

Maybe you can crowdsource your web-related initiatives.

I believe the christmasfuture.org site was a community effort - they have open sourced their technology:

http://donortrust.rubyforge.org/

Depends what your initiatives are I guess but maybe think outside of the box in terms of how to resource the projects.

Cheers

dskhatri2• 18 years ago

In Founders at Work, Craig Newmark mentioned there were a lot of downsides in running Craigslist as a non-profit. I haven't done much research on why this is but was wondering if you could elaborate on whether the search for funding is limited by your non-profit status? Would it be easier to run your organization as a for-profit group like Google.org?

On another note, it would be helpful if you described your organization's purpose/ mission. Some friends and I are in the very early stages of starting a social venture that would help non-profits, not with financial funding, but with access to smart people to help out in various tasks at the organizations. You can write to me at dskhatri =shift-2= google's email. Good luck!

aaronsw2• 18 years ago

Craiglist isn't a nonprofit and never really has been to my knowledge, so I don't know what you're talking about.

natrius• 18 years ago

Founders at Work, page 250:

In the end of '97, I was approached by some volunteers, and they said, "Hey, let's run craigslist and see if we can run a nonprofit." To make a long, painful story short, that effort failed. I kind of knew it was failing, probably midway through 1998, but I was in denial. A couple of our biggest job posters took me out for lunch and said, "Hey, this isn't working. Get real and make this more serious." It took me a couple months, but I got out of denial, made craigslist into a real company--got off to an OK start. But again, it wasn't until Jim became management that we got good.

pchristensen• 18 years ago

Craigslist isn't non-profit, it's a for profit business whose goal is user satisfaction, not revenue maximization. For instance, apartment listings are free everywhere except NYC. NYC landlords and brokers asked Craigslist to charge for listings, because it reduced the amount of spam and fake listings. Since users were asking to be charged, they started charging. The money from these few exceptions (like jobs in SV and a couple other markets) makes more than enough money to pay for everything else. They make something like 600-800K per employee, hardly non-profit.

dskhatri2• 18 years ago

Well, yes, they are not a non-profit but actually tried running the organization as a non-profit at one point. Craig Newmark mentioned that it was a bad idea but didn't explicitly give the reasons why. That's what I was alluding to. I should have been clearer, but thanks for your comment.

oldgregg• 18 years ago

Non-profits to me are a lot like businesses, you have to find the point of leverage that you can exploit. I've worked with a couple non-profits to develop for-profit web apps that plays to their strengths and dovetails with their mission statement. It seems like google.org is trying to do this in an even bigger way by working to create self-sustaining non-profits. It's hard work obviously... But a lot of these business people, if you say hey this project has a plan for profitability, then donors will often invest in a project with a higher degree of risk tolerance just because you have a higher mission and its something they can feel good about.

My parents have worked in non-profits for a long time and I know how hard it often is-- props for working on something that isn't totally narcissistic! :o)

ComputerGuru• 18 years ago

It's not easy. As the founder of a 4-year-old non-profit tech company, I can tell you that it's not easy and your best bet is to make it your number 1 short-term goal to become self-sustaining. By borrowing money, asking the right people, getting donations, etc. you can get off the ground and get started. Form there, focus on finding steady income source (ads are a good way) even if it's not a lot of money.

Finally, don't underestimate end-users willingness to donate. Paypal buttons don't work because everyone assumes everyone else has donated money. We started using "donation trackers" by ChipIn (chipin.com) and they've been quite effective. Make sure you set a "goal" because people love to feel they're helping you work towards a particular amount. (For instance, we always get our most donations at the beginning and end of each month, when people send the donations percentage to 5% and to 100%).

Best money-saving tip: find a webhost to donate a dedicated server; it's the most important way to save money and keep afloat.

breck• 18 years ago

> Paypal buttons don't work because everyone assumes everyone else has donated money. We started using "donation trackers" by ChipIn (chipin.com) and they've been quite effective.

Thanks for this tip. I helped a non-prof with their website but they get very few donations through their PayPal link. I'll suggest this change. It's always the little things that can drastically increase conversion rates.

pchivers• 18 years ago

I just used ChipIn for the first time last week. A friend was sick and a bunch of us chipped in to help cover medical bills.

It's really a great service. I'm surprised that they've been around for over two years without getting more attention.

ckinnan• 18 years ago

But their site says they are trying to patent their widgets.

tt• 18 years ago

Depending on exactly what your non-profit does, but another thing you most likely would run into: most funders/donors, especially the up-and-coming, really want to know your non-profit's effectiveness before sending you any money.

Most non-profits have no resources to do this well and/or they simply don't think this way.

Here's my benevolent startup: http://www.goalshift.com .

We offer an online tool to help non-profits measure their client goal progress and correlating with the programs/activities they serve. Visual charts clearly show progress.

It's entirely free for small organizations or small programs.

chasingsparks• 18 years ago

The entry I submitted to the last YC round is related to non-profit fundraising. Still looking for an Angel, but that should be resolved soon.

aaronsw2• 18 years ago

Do something big. My experience has been that funders are pretty persuaded by the impressive cost-to-impact ratio. But the trick is to go after funders for the particular field you're in, not general technology funding. So for a book-related project I did, we went after funding from library groups. They're much more excited by the power of tech than tech groups.

edw519• 18 years ago

Some providers use non-profits as loss leaders.

Iceberg is one:

"Free for 5 business users and unlimited Non-Profit use"

http://www.geticeberg.com/

Ask YC: Nonprofit funding

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