Nonprofit Watsi raises $3.5m “philanthropic growth round” by applying tech start up principles

Watsi, a nonprofit crowdsourcing site that allows individual donors to fund medical treatments for people around the world, is getting attention for applying tech startup principles and tactics to run its philanthropic organization.

“It's crazy that there are huge engineering teams figuring out how we can add a different filter to our photos, but there are so few people using the Internet and technology to bring education or health care to the world," Chase Adam, who founded the San Francisco-based nonprofit in 2012, told Entrepreneur.

Adam was inspired to start the social venture while he was serving in the Peace Corps in Central America. According to the Watsi website, a woman boarded a bus he was on and asked for donations to pay for her child’s healthcare. The organization gets its name from the town he was traveling through at the time.

Instead of following the typical nonprofit model of constant fundraising, the organization has operated more like a start-up by raising a large amount of money upfront. This approach has enabled the group to raise a $3.5 million growth round of donations from foundations and philanthropists, which will support the Watsi’s operations and improvements to technology. While the organization’s overhead costs are covered by these funds, all crowdfunded donations go entirely to patients.

Watsi has recruited top engineers to improve its platform and is looking to hire more. Visitors to the website can view patients’ profiles and donate to fund individual people and procedures. Donors receive an update after the patient receives treatment. To date, more than 14,200 people have funded healthcare for more than 5,600 patients in 20 developing countries.

On the backend, reports, Watsi’s next step is building a platform that will provide an electronic medical record where care providers can upload and manage patient data. The group is also working to create a streamlined system and time line to measure healthcare procedures and results and to help the organization to perform “ongoing due diligence.”

In 2013, Watsi became the first nonprofit accepted by Y Combinator, the elite Bay Area seed accelerator, which provides support to early stage startup businesses. Former graduates of Y Combinator’s competitive three-months program include Reddit and Dropbox.

Adam told Entrepreneur magazine that he would like the nonprofit sector to take technology more seriously.

The Internet, he says, "is the best tool we've ever developed as humans," and while the majority of for-profit startups understand this, "the nonprofits that are solving some of the most important problems in the world – that are trying to save lives and provide education – are not adopting it fast enough. It's insane to me."

He says he does not necessarily blame traditional nonprofits. "If you've been operating non-technically for 20 years, how do you incorporate technology in an effective way? You can't just sprinkle it on top," he says. "You have to change how you think about problems and how you solve them."