

Ask YC:  Nonprofit funding - ssharp

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.<p>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!
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ComputerGuru
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.

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pchivers
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.

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

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oldgregg
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)

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dskhatri
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!

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pchristensen
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.

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dskhatri
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.

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blender
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

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aaronsw
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.

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tt
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.

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chasingsparks
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.

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bmaier
Use <http://ThePoint.com> !

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edw519
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/>

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ideas101
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).

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popat
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.

