New Nonprofits Find Success Using Start-Up Mentality

In recent years, new nonprofit groups have been tackling their causes using the mentality and technology know-how typical of for-profit start-ups, says Forbes.

Y Combinator, a business “accelerator” that has provided seed money and advice to start-up companies since 2005, began doing the same for nonprofits last January, starting with the medical charity Watsi. Based in San Francisco, Watsi spent $135,000 to raise $1.2-million in seed money to support its operations and has brought in $2.2-million so far for people who need medical procedures they cannot afford.

Similarly, Pencils of Promise followed a start-up model five years ago when it began working with for-profit companies to open 180 schools in developing countries, with 10 to 20 percent of the funding coming from the communities, which usually provide labor and materials.

“I bootstrapped from $25 into an organization that raises millions of dollars, and that was done through a start-up-based mentality,” said Adam Braun, the group’s founder. “Start-ups test new innovations and are always evolving—I think that that’s really, really important for any organization.”