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YC Will Now Fund Nonprofits Too (ycombinator.com)
454 points by pg on Sept 6, 2013 | hide | past | web | favorite | 109 comments

It's interesting to compare the differences between the two applications-

For Profit - https://gist.github.com/e1ven/6467215

Non Profit- https://gist.github.com/e1ven/6467309

Overall, it seems like they've replaced 'company' with 'organization', and dropped a number of questions relating to making money.

Interestingly, many of the questions have been dropped without replacement, even when I would imagine the answer would be very interesting to YC!

For instance, 'Who are your competitors' has been dropped entirely. Nonprofit companies can certainly compete with one another.. But they also often compete with for-profit companies.

Take for example Wikipedia - They're a 501(c)(3) but they've certainly competed with Encyclopedia Britannica, Grolier, Encarta, etc. It might be helpful to keep the questions, but to ask them in a modified way. For instance, "Who is this going to disrupt?"

Similarly they dropped "How do or will you make money?", without replacing it with "How do you plan to you raise money?"

"How will you get users", and "Was any of your code written by someone who is not one of your founders?" were also dropped.

They also haven't (yet) added questions relating to non-profits, such as "Why do you think you will be able to get a 501c(3) classification?"

It's a really interesting idea, and it'll be interesting to see where they grow with it.

It really reminds me of the first few years of YC where they were making it up as they went along, before they started the current cycle of continuous improvements through validated learning.

Watsi was the MVP, now they're ready for Beta ;)

I'd love to see a question that addresses the nonprofit's goals from an Effective Altruism perspective. Maybe something like: "who are your competitors, and what is their average cost-effectiveness in DALYs[1]? If they aren't very cost-effective, what makes you think your process will be better?"

[1] http://www.givewell.org/international/technical/additional/D...

I second this question. There are good nonprofits which will find it difficult to answer precisely, e.g. one which focuses on basic science research (which has, over the course of human history, contributed rather a lot to human welfare). But it is certainly a question that nonprofit founders should be thinking about right from the start, and producing vague estimates accordingly, just to get into a quantitative frame of mind; otherwise it is a very bad sign.

I don't like this question. It's akin to asking a startup, "What is your revenue model, and how will you be cash-flow positive?" Eventually every startup will need to answer that question, but asking it too early is more likely to stunt important and creative ideas that don't come with cookie-cutter business models than it is to reveal a winner. Much better to ask open-ended questions that get at the same thing: What's the potential impact of your idea? Why are you going to succeed where others failed? And if the answer is "We're smart and we have these advantages and everyone seems to like what we do" then it may be OK not to have the cost-effectiveness worked out in detail yet.

There's a nuance to asking about cost-effectiveness for nonprofits that doesn't exist for for-profit corporations -- and that is that a nonprofit can be wildly successful by every metric except helping people.

There are charities who take in millions of dollars, keep some, and spend the rest to send bibles to Africa. By every measure, they're "killing it": they have a well-paid staff, a happy donation base, and they send out a heckuva lot of bibles. It's an easy business model to copy, and an almost-guaranteed smash-hit in terms of getting returns on investment. But, here's the rub--do you think there's any evidence that sending people bibles increases their quality-of-life?

Basically, I'm hoping here that PG is getting into the nonprofit sector because he wants to help people--not just to become (more) rich by looking like he's helping people.

We don't know yet what will turn out to be the most important questions for nonprofits, so we just kept the subset of questions that seemed to apply to any project whether for profit or not.

I would suggest that this would be an excellent time for Y Combinator to consult with Holden Karnofsky of Givewell, which has done a large amount of smart investigation into nonprofits. Karnofsky is local to the Bay Area.

Caveat: Givewell tends to focus attention on nonprofits with well-validated, very-high-probability, easily-quantifiable effects which is not where one would expect the greatest expected value from daring new attempts to be located. Nonetheless I would expect that talking to Givewell would be very epistemically profitable if you are just venturing out into the nonprofit space.

We don't know yet what will turn out to be the most important questions for nonprofits

Evergreen funding source/s is (arguably) the definition of success, for any organization, profit or otherwhise, at least empirically. Competition for scarce resources is thus a key part of the game.

The CEO of MOMA (non-profit) has a salary approaching $2MM/yr. This is rationally viewed as a sales comission ($2mm/ on $XXmm in fundraising prowess) by the trustees. There is no other measure of 'productivity' at that order of magnitude for a "non-profit" organization (10x the statuatory salary of POTUS). Similarly, at non-profit universities. Both in the administration and elsewhere (multi-million dollar salaries for NCAA D1 sports linked with television contracts). Comparably, also the Clinton Foundation, per this recent note from the NY Times:

Worried that the foundation’s operating revenues depend too heavily on Mr. Clinton’s nonstop fund-raising, the three Clintons are embarking on a drive to raise an endowment of as much as $250 million, with events already scheduled in the Hamptons and London.

You accurately describe the trends, but I'm not sure those are positive trends. If these CEOs of nonprofits were indeed purely sales agents receiving commissions, fine, it's a rational ROI to employ them in a role like Vice President of Donor Relations.

But they happen to also be the CEO, formally in charge of the whole operation, and further tend to set the tone for that operation. Then you have the fundraising tail wagging the mission dog. As a result, some nonprofits (and universities) start to look more like weird corporations that exist to perpetuate themselves and their top staff, with some kind of mumbo jumbo relating to public service being an official goal but nowhere near the top of the priority list. An organization that exists primarily to perpetuate itself and pay its staff well is perfectly fine, but then it doesn't really have any business claiming to be a charity...

Its worth taking a look at samples of the data.

Education: http://www.dartblog.com/images/CHE%20Salaries%20Ivies%20Comp...

ART/culture: http://www.nytimes.com/interactive/2010/04/26/arts/salaries....

Sports/NCAA: http://www.philsteele.com/blogs/2012/Mar12/DBMar15.html

Charities/Misc: http://www.charitywatch.org/hottopics/Top25.html


sample: Robert J. Mazzuca, Past Chief Scout Executive Boy Scouts of America - N.O. $987,412

Similarly they dropped "How do or will you make money?", without replacing it with "How do you plan to you raise money?"

This is a bit naive. As someone who has worked a bit with non-profits, neglecting sales (and the whole "how do we get money in the door" part) of nonprofits is often what causes them to fail.

PG, assuming that you're as connected in the business world as I assume you are, I would recommend reaching out to John Wood, author of "Leaving Microsoft to Change the World" - http://www.leavingmicrosoftbook.com/ His book fundamentally changed my view on how successful nonprofits are built.

Awesome move! But from a data-gathering point of view, why not leave all the questions in. More questions more data!

Also, I find the "how do you make money" question still the most important. Sure a non-profit shouldn't focus on making money, but the more money it can pull in, the bigger its impact is and the higher the likelihood for success.

Going by http://www.paulgraham.com/good.html, I wonder if the forprofits will become more like the nonprofits rather than vice versa

Should definitely leave the "competitors" question. There are way too many non profits as it is. There are 1.5 million non profits and many go after the same causes, and the same donors, preventing any from reaching critical mass.

I think you're over analyzing. PG probably hacked that in 5 minutes, and then got to more important matters.

Good catch. Its a shame, still great news overall tho. Looks like they are being more lenient with non profits, maybe?

I am very excited for this initiative. However, I think there is a mismatch between venture-funding models and non-profit funding models.

Venture capital economics is premised on founders accepting low initial salaries based on the hope for long-term big payoffs. Which makes it OK for seed funding to be very small (on the order of tens of thousands).

However, non-profits have no hope for long-term big pay offs and therefore have no financial incentive to seek small amounts of seed funding.

In other words, it is sensible for a for-profit startup founder to accept zero salary (or close to it). However, it is nonsensical for a non-profit startup founder to accept close-to-zero salary.

I believe the YC non-profit initiative could still be beneficial to non-profits for the sake of mentorship, networking, etc. But I don't think many non-profit founders will drop their day-job salaries to launch YC non-profit startups.

Edit: s/sensical/sensible/g

> However, it is nonsensical for a non-profit startup founder to accept close-to-zero salary.

And yet we do, often for years at a stretch.

One reason we didn't worry about this was that Watsi showed us that there is at least a subset of nonprofits whose founders are willing to work for very little early on. Maybe this will even turn out to be a good filter. But whether it does or not, I'm pretty sure there are other Watsis out there.

I've being working in the non-profit sector for a time and I do think salary is an issue for non-profit leaders. But I don't think this will filter out good candidates for YC.

As for-profit founders want to go to YC to earn a lot of money later, non-profit founders will want to go to YC to earn a sufficient amount of money later. Both will be motivated by creating impact.

But I don't think you should take for granted this and an important step in any non-profit validation is if the non-profit will have enough money to pay its leaders and employees. In regular for-profits it's just assumed that, if you raise enoughs funds or sell enough product, the founders will have their share. With non-profits that can be tricky.

Finally, congratulations, I think this is a great decision. I have being noticing the similarities between startups and non-profit challenges and they are pretty much the same. I applied a lot of "customer development" concepts at my last job on a non-profit, and now I am applying a lot of non-profit concepts on my for-profit startups.

Having launched a non-profit and accepted close-to-zero salary for well over a year, I can confirm that it is nonsensical.

Your argument seems to be based on the premise that the only sensible purpose that a non-profit founder can be pursuing is personal financial reward; if we assume that a founder can have an interest in the mission of the non-profit, then it makes perfect sense to sacrifice salary (providing that the founder has resources that they can afford to live on during the period when they are sacrificing salary) for a period to advance that interest.

You shouldn't think of YC as an alternative to work. It's an accelerator, it should just accelerate what you're already doing. It's not the endpoint for a startup or non-profit. If you've already started a non-profit and would continue to either way then this could add a lot of value.

I agree it could add a lot of value. I am skeptical that the financial contribution will be significant.

It seems like you're implying that these non-profit founders put a lot of weight in salary as a consideration to whether or not they pursue their vision. That's something I'd disagree with (though admittedly my opinion off is based off the folks behind Watsi).

The non-profit startups that are going to fit YC are going to be the ones that aren't in dire need of a market salary, who don't need the potential of a huge cash windfall to keep on grinding.

The sacrifices here will be made in the pursuit of 'success' (however you define that), and the pursuit of watching your organization be large enough to make a difference (these are also primary motivators of for-profit startups in my experience).

> It seems like you're implying that these non-profit founders put a lot of weight in salary as a consideration to whether or not they pursue their vision.

I was implicitly assuming founders of non-profits care about salary. I think it's very admirable that there are people willing to forsake salary for a greater social good. It sounds like this might describe the Watsi crowd.

I am only intimately familiar with one non-profit, whose founder spent years launching her non-profit --- with the financial support of her spouse's salary. I have heard anecdotally of other non-profits whose launch was only possible because the founder was financially supported outside of the non-profit.

But it doesn't have to be this way. I don't think it's intrinsic that potential founders must choose between salary and launching a non-profit. For example, founders could make a salary working part-time for for-profit companies and spend the rest of their time running their non-profits.

Maybe YC could help facilitate such work relationships. I think it would grow the pool of people willing to pursue non-profit endeavors.

Did you just take 200 words to say "Only wealthy individuals who don't need money can do this?"

Also in tech, its almost impossible to sell workers on the idea of a options-based windfall in favor of lower pay -- let alone the vague promise of 'success'.

You don't have to be wealthy (of course, that helps). Sometimes, people are willing to forsake money to start a non-profit.


Samasource's founder was sleeping at a friend's couch for a while, while being a SAT tutor.

Note: I'm an ex-Samasource employee

I would say a large percentage of people who work in the non-profit space are already paid very, very low salaries and have accepted that as the reality of working for a non-profit. There are surely a lot of people who would choose to start their own non-profit and receive the same low-salary in exchange for the added benefit of having ownership over their work.

I think a lot of people join startups for the same reason, just with the added benefit that they could end up cashing in.

Non-profit does not have to be equated with near-zero-salary for employees. The cash in flow (the revenue part) for non-profit comes from patrons who are well-off and have desired to give away part of their surplus wealth. As the non-profit startup grows and shows results they can do rounds of funding from other patrons, institutions and government just like for-profit startups will do roadshows. The return of the investment is the positive impact they created on lives of disadvantaged people or future generation. The important thing to realize here is that for-profit and non-profit are not that different. Both have revenues, expenses, profits, return on investment, competitors, deadlines, talent acquisition, business plan, products, metrics, investor objectives and so on. The only thing changes is definition of profits and return on investment. There is a huge benefit in running non-profit just like for-profit organization.

I would highly recommend reading chapter on "Performance Philantrophy" from the book Richistan: http://www.amazon.com/Richistan-Journey-Through-American-Wea...

I think you misunderstood my point. I agree with you that a "non-profit does not have to be equated with near-zero-salary for employees."

My only point is that while there is a __financial__ incentive for for-profit founders to eschew short-term salary, there is no __financial__ incentive for non-profit founders eschew short-term salary.

Despite my financial analysis, I still think this initiative could great for non-profits. I am really excited and optimistic to see what comes out of it.

> My only point is that while there is a __financial__ incentive for for-profit founders to eschew short-term salary, there is no __financial__ incentive for non-profit founders eschew short-term salary.

Even that's not necessarily true; sacrificing short-term salary to stablish an organization where you could have a long-term, modest salary doing something you care about (and therefore can stay with over the long term) is a financial incentive. It may not appeal to the same people that a big cash-out payday from a for-profit startup appeals to, but its still a financial incentive.

You are right; I should have said "there is less __financial__ incentive"

Even then I think you are chasing the wrong horse. My wife has worked in non-profits and social good startups for several years now and getting to know her friends it's obvious that sometimes they may make decisions based around finances, but frequently and I would say usually their decisions are based around impact of the organization. YC stands the chance to greatly increase the organizational effectiveness of these organizations, which is an issue that many non-profits struggle with and could help them leap forward tremendously in their early days.

"But I don't think many non-profit founders will drop their day-job salaries to launch YC non-profit startups."

I'm quitting my day job in January to launch a non-profit startup. The timeframe is more or less the same as YC, so I'm considering applying.

> However, it is nonsensical for a non-profit startup founder to accept close-to-zero salary.

I've volunteered for a non-profit organisation where even full-timers didn't have a salary, including the founders, though their most direct expenses were taken care of by the organisation. These people didn't want money from the organisation because they didn't need it to stay alive and they knew it would be better spent directly on achieving their goals. It makes sense to me; you don't (and perhaps shouldn't) work full-time for a charity you're not passionate about.

> In other words, it is sensical for a for-profit startup founder to accept zero salary…



So proud of YC for doing this. There are so many lessons the nonprofit world can learn from the world of startups. If YC can help great causes scale faster, the world will be better for it.

In fact, I'm sure there are many things both worlds can learn from each other. More diversity within the groups will be a good thing by itself, even if just for the for-profit's sake.

That said I'm also excited about it being non-profits particularly - this way YC can help solve problems in which there's no money to be made.

YC is doing a great job. Helping people who'll help others is an awesome way to change the world to make it a better space.

This is a great move for YC. They've never been about making ludicrous amounts of money which is one reason they've been able to be so successful. I loved that they funded Watsi and agree wholeheartedly that non-profits can benefit from YC/startup advice in general.

As a side note, I think that we've as a culture have been approaching non-profits entirely wrong [0]. Instead of letting them build structure to actually maximise the help they can give, we require them to be stripped-down organizations so their metrics can show they're giving as much money away as possible. This is why we've seen such a surge in for-profit-but-that's-not-the-main-point companies like Tom's Shoes lately. It's simply the best way to do the most good.

[0] http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

With donor funded nonprofits the "product" is fulfilling the donors' wish to see money spent on X, so the litmus test for spending the money for donor-funded organizations should be if donors knew we were spending on this, would they change their mind about the donation. Rational, reasonable people won't mind some of their donation being spent soliciting further donations, but they will mind nearly all the money being spent on fundraising activity, to the point where it's essentially a marketing matrix giving little more than an "image rights" fee to the good causes.

Profit making companies like Tom's Shoes that see philanthropy as a core brand value, are a different matter. There's room for more of them irrespective of how the charitable sector organizes itself.

> With donor funded nonprofits the "product" is fulfilling the donors' wish to see money spent on X

I disagree. With donor funded nonprofits, the product can be to fulfill the donors wish to see their money achieving outcome X, not seeing their money spent on outcome X (it can also be as you present; different donors have different motives.)

I don't think that necessary challenges your conclusions, but I think it is an important distinction.

He was also in an hour-long episode of Econtalk: http://www.econtalk.org/archives/2013/06/pallotta_on_cha.htm...

I really love the concept of an early stage investor formalizing their commitment to improving the world by explicitly creating room for non-profits. Now all we need is a later stage fund to structurally commit follow on investment to these non-profit start-ups. YC deserves big props for this and for not just chasing the buck, if not with all their investments at least with these the mission really is to change the world and for the better at that.

Watsi was an experiment waiting to be repeated, looking forward to see which non-profits will make it through here.

The Shuttleworth Foundation does this. They provide fellowships that are the size of an angel or seed round. Primarily for non-profit projects but they do for-profit as well (in my case).

An amazing group/experience is a big understatement.


Disclaimer: I'm a 2nd year fellow.

Maybe you could drop them a hint about partnering with YC for this? That would be something to watch.

I've chatted with Chase from Watsi. I'd love to get something more fomalized...

hey, thanks for this. I didn't know about it, but I think I should apply. I would be super appreciative if you could contact me (info under my heading) if you would be able to provide advice or insight into whether or not this is a good idea.

YC is really demonstrating thought leadership here.

It would be super exciting if we started to see overlap between Y Combinator and the effective altruism movement (http://en.wikipedia.org/wiki/Effective_altruism), which is people who are trying to make the world a better place in the most effective way.

(I do for-profit startups but am also involved in the EA movement. Please contact me if this is interesting to you.)

I'd love to apply to this, but most people around me are off having stable jobs, wives, mortgages, children and other such craziness. Is there much hope for accepting a solo founder with a non-profit idea?

We'll probably treat single founders the same as we usually do. We don't automatically reject single founders, but we have a higher threshold for them.

Hey pg, the date on the apply page (https://news.ycombinator.com/apply) is still from the summer term. Cheers.

Oops, fixed.

They need to ask:

1. At what percentage will your entity spend on administration costs?

2. Will you agree to keep it to less than 10%, if we give you funds?"

3. Flat out ask the future non-profit, "How much money do you feel you will need to run the non-profit. Would you agree to take only what the standard cost of living in the county you reside--if it succeeds?"

4. Will your BOD contain any family, friends, or relatives?

5.(Sorry if I sound callous; I live in a county where starting a non-profit is a career move. Some of the salaries are mind boggling.)

6. (Note to any future non-profit. I applaud your efforts if they are honest. Just a reminder--if you ever close down the 501(c)3 you can't keep any assets--not even a paper clip. Nothing belongs to you. )

Though it is tempting to try to capture the entirety of the "efficiency" of a non-profit with a single number, it isn't really helpful.

In particular, it turns out that "administration" doesn't scale linearly. A 4 person nonprofit still needs their ED to spend ~50% of time fundraising; there's likely >15% of your salary right there.

Information from folks that have done this for a while: http://philanthropy.com/article/3-Major-Charity-Groups-Ask/1...

Data, if you want: http://nonprofitquarterly.org/management/22239-new-study-low...

> Though it is tempting to try to capture the entirety of the "efficiency" of a non-profit with a single number, it isn't really helpful.

Even when it would be, "ratio of total spending to administration spending" probably is almost never the right single number.

Yes--there's no real number on administration costs. Maybe that's the problem? Just keep giving--we're complicated! I guess I keep giving to the nonprofits that sound good? The one's that advertise on T.V.?

Any nonprofit founder, should be able to answer a few questions; "How much do you, the founder expect in salary-- present and future. If we decide to fund your initial nonprofit, would you agree to work for these amounts?

If you want to make a large salary--start a for-profit business. There's nothing wrong with wanting to make a good living, but don't hide behind a nonprofit entity.

Oh yea, Obama is hip the nonprofit dance, but hasn't done anything. A few years ago, he wanted to separate legitimate nonprofits from just money making businesses. As far as I know, nothing has been done?

I was using Unicode "scare-quotes". They may not have rendered accurately.


The idea that "low percentage of admin costs" = "high efficiency" in a non-profit is, well, naive. The resources you devote to making sure the other money you spend is effectively serving your objectives and researching more effective ways to meet your objectives is admin costs -- its trivial to minimize admin costs, but its foolish to mistake minimizing admin costs with increasing efficiency.

Certainly, having an objective measure of value produced and maximizing the ratio of that measure to total dollars spent is a good thing, but "dollars spent less admin costs" is not a good objective measure of value produced for most non-profits.

Hiring well is the most important thing any organization can do.

Guess what accounting bucket that goes into?

"1. At what percentage will your entity spend on administration costs? 2. Will you agree to keep it to less than 10%, if we give you funds?"

Sometimes (important word, sometimes) admin costs need to go above 10%. You have to spend money to make money.

If a business had an opportunity to spend 1 million dollars to make 2 million dollars, they would do it all day. (Taking into account their rate of return etc.) If a nonprofit had the opportunity to spend 1 million dollars to make 2 million, they might not, because they don't want their admin costs getting "too high".

Remember, in addition to what everyone else said, working for or founding a non-profit should not and is not a death sentence to a comfortable life. If the officers are making a salary that is appropriately valued (which WILL be audited by any reasonable board of directors) things are correct.

This is a wonderful initiative.

I'm someone who's generally very skeptical about the VC ways of doing things (difficult to really describe my feelings here, let's just say some just seem a bit too unapologetically mercenary in my eyes), so this move really sets apart YC from all the other startup-incubators/VCs.

Watsi is fantastic in every way I can think of. I hope more people are encouraged to create nonprofit companies to solve some real problems (read: non-first-world-problems) in a true hackerly fashion.

As someone working for a nonprofit this makes me very happy. The world of a starting non-profit is surprisingly similar to that of a startup. :)

The only true difference between a for-profit and a non-profit is the tax status.

Cosmic level blessings on Paul Graham for doing this. Badly needed. The entire sector needs catalytic infusions of entrepreneurial energy and expertise.

Only 150 non-profits have grown past $10M in revenue since 1970. North Korea has better business acumen. Love to see efforts like this.

Thank you Y Combinator!

Hmm, $10M/year seems a bit off. This (http://www.ssireview.org/articles/entry/how_nonprofits_get_r...) says the figure is $50M/year in revenue.

Thanks for the correction on that.

Does anyone know what the financial motivation of YC to do this is? Is it to diversify the types of companies they invest in? As much as I love to think that venture capitalists give money to nonprofits out of the goodness of their hearts...

There is no financial benefit to us. And incidentally a lot of venture capitalists do give a lot of money to nonprofits. E.g. http://finance.fortune.cnn.com/2012/04/25/andreessen-horowit...

because they like to help nonprofits out of the goodness of their hearts, but sometimes what a nonprofit needs is not just money, but infrastructure and connections - and here the ycombinator folks have the opportunity to provide access to those less tangible resources using an organization that doesn't have to be built from scratch.

When I said "like to help nonprofits out of the goodness of their hearts" I was being sarcastic. I'm skeptical that this is just a charitable action. I was wondering if anyone has any ideas how this might benefit them financially.

I don't want to seem like I think this can only have bad intentions, but finance people and investors aren't typically known to be charitable.

> I don't want to seem like I think this can only have bad intentions, but finance people and investors aren't typically known to be charitable.

That's incredibly false.

I think you're projecting.

finding more talent and keeping them in the YC family

Really awesome to see this.

pg - Can you explain your reasoning on a charitable donation to the "startup"? It seems that if these .orgs are successful one great way to literally pay it forward is into a separate fund that could grow more .org's.

Program-related investments (http://www.irs.gov/Charities-&-Non-Profits/Private-Foundatio...) from a ycombinator.org would seem to fulfill both investments in .orgs and investments in for-profits with a mission.

Although there's no financial incentive for YC here, the financial cost for the few non-profits they decide to fund is nominal as well.

YC has the money to fund many more companies than they do. But not the bandwidth.

Y Combinator is not selling their capital, they're selling their time, expertise, and network. A separate fund would defeat that purpose.

Aaaaaand now we'll start to see a lot of accelerators throwing non-profits in with their other companies, because YC did.

I don't think that--in the vast majority of cases--this will be particularly helpful.

To be fair, most companies accelerators invest in never turn a profit, so they're already living the dream.

Non-profit management consultant, foundation CEO here. Could not disagree (respectfully) more. The social sector badly needs business culture and acumen wherever it can get it. Lack thereof is the #1 choke point on tens of thousands of great ideas.

I wouldn't be quite so skeptical. For accelerators with a particular focus, their expertise and organization could be just as helpful to nonprofit organizations as to for-profit companies.

hi pg, Any update on when you will update your 'startup ideas we'd like to fund'?


That would be a good idea for an android app. I thorough list of hundreds or thousands of ideas we'd like to fund. Aspiring startups can go through the list, select which ones they like, max of 5, and submit an application to YC right then and there. I wonder if PG's thought of doing that.

edit: what's with the downvotes? that's puzzling

Maybe this is oversimplifying things, but I think a startup/prospective founder for which the current YC application is too time-consuming/difficult is probably not an ideal one; the application process is a filtering mechanism, after all.

There might be a lot of capable founders, such as older people with a lot of experience in other industries, who are filtered out by that. You might be a 50 year old guy who doesn't get computers but are a killer sales guy, making it easier to select an idea and proceed might be a good bet for YC. Maybe even match up that killer sales guy with a young programmer type.

If YC is in the business of matching cofounders, I am unaware of it.

Without that, you're still suggesting that they fund a team that is so uninspired that they can't spend a little time on the application. YC does not have unlimited resources with which to filter applicants, so increasing the number of applicants and decreasing their average quality (an argument that this wouldn't happen would be interesting if you have one) seems like a lose-lose situation.

PG has stated multiple times that they key to success is being relentlessly resourceful and pivoting. There are a lot of people with that mindset, most of whom are not Stanford/MIT graduates. Encouraging more applicants from a wider selection pool might increase the quality of YC batches.

PG is always innovating, I'm sure the current process he's created is not the global maximum. He might be interested in matching founders, giving initial ideas, codifying more of his process into apps - anything that might increase ROI he will try as a rational businessman.

According to Eric Ries, "a startup is a human institution designed to create a new product or service under conditions of extreme uncertainty". "Institution" is broad enough to include nonprofits, which are explicitly mentioned in the Lean Startup book. After all, they do face similar challenges to those that companies face, as they also try to discover new sources of value and to grow... Looking forward to seeing the future YC nonprofits!

Great idea! I'd love to see more data-centric nonprofits. The recent This American Life episode "I was just trying to help" discusses this with GiveDirectly. GiveDirectly points out that many many nonprofits are soliciting donations based on anecdotes and are reluctant to produce more data on their impact. I can only imagine that YC-selected nonprofits (and NGOs? Could this go global?) will be more data centric than the rest. Good luck!

I've been helping a family friend bootstrap her nonprofit, and let me say that it is darn near the purest form of bootstrapping to start a nonprofit. Not only did she have no income to start, but she has no expectations of personal financial gain. She bootstrapped for pure love of her cause.

Funnily enough, in her struggle to get her nonprofit off the ground, I got my idea for my "startup". Bravo to YC for taking an unorthodox step here.

Great idea. Non-profits frequently run into two challenges: financing and scaling. This helps on both fronts. Providing initial seed capital, mentorship on growth and an audience of rich people (many of whom have committed to giving part of their legacy towards non-profits) will increasing the likelihood of their success. If YC takes on 5 non-profits and even 1 scales, this will be a venture worth doing.

Nonprofits are notoriously non-technical; run by people who just aren't able to use tech to advance their cause. So I think this makes sense.

I am interested to see how this turns out. The amount of money a person donates each year is roughly fixed. Each non-profit is competing for a splice of that donation. So in some ways having multiple non-profits in the same batch is like funding multiple companies which are direct competitors with each other.

Great idea. Think it's a phenomenal idea to apply some of the same mechanisms for building high growth engines to the charitable space. It's a space that needs that type of growth.

This is a game-changing equalizer for non-profits! Thanks YC.

This is awesome and encouraging. I hope it sets a trend.

this is absolutely awesome to hear and can not wait to see how things progress. a truly great initiative!

can you apply to both the categories..?

Not with the same HN account, but if you have two founders you could submit separate applications under each account.

Support for L3Cs or B-Companies would be great...but investors don't like them too much.


Interesting move by YC as a way of paying less taxes and helping nonprofits at the same time!

Um. "Paying less taxes" is unlikely to be a motivator here, because you still end up with more money if you don't give it away at all :)

I'm not sure I understand your argument. I never said that the motivator was ending up with more money.

But yes, they will pay less taxes.

So, if their tax rate is 35%, every donated dollar costs them only 65 cents.

That's a really undeveloped idea of "nonprofits" — "rich people" and "charities."

You could turn that comment into something constructive by proposing some particular kinds of nonprofits you think we should fund but might not have thought of.

You could contact people like these (and many others), and beg them to advise you, or recommend advisors:

* http://www.zcommunications.org/zcontacts.htm

* chomsky@mit.edu

* http://www.iww.org/contact

Have you considered looking at groups who've really "disrupted markets" (in the most literal sense, like sex slave and child labor markets, even markets in general); break unjust things, and are real risk-takers who risked poverty/jail/beatings? You know, serious hackers.

They need to ask:

1. At what percentage will your entity spend on administration costs?

2. Will you agree to keep it to less than 10%, if we give you funds?"

3. Flat out ask the future non-profit, "How much money do you feel

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