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Comment by dmoney | Hacker News Reader

So, the really cool part is this:

"At Watsi, 100% of your donations directly fund medical treatments. Watsi.org is separately funded. They pay all their operational costs from their own funding, and none from your donations. They even eat the credit card processing fees."

It doesn't sound (as) cool me if the founders can only do this until they go broke. It looks like they do accept direct donations to fund their operating costs, but it seems to me that the demand (if that's the right word for the desire to donate) might not increase at the same rate as the demand to fund treatments (and therefore costs for credit card fees, hosting, staff) increases. Better to take a percentage and be transparent about what you use it for.

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Very good point. We certainly don't want to go broke!

However, we feel very strongly that Watsi should be run like a successful startup, and not like a traditional non-profit.

Sustainability is extremely important to us. I'm a terrible fundraiser, and I want nothing more than for us to cover our own overhead.

However, it just doesn't make sense to implement revenue generating features (e.g. take a cut of donations, which to be clear we will never do) until we hit scale. Right now, we're entirely focused on improving our product, speaking with donors, and maximizing our impact.

However, just like any successful startup, there will (hopefully) come a time when the costs associated with scale begin to outstrip the seed-support we've so generously received from people like pg and Jessica. When that happens, we will implement features that generate revenue for our organization, and we'll have a user base large enough to make those features viable.

Without going into too much detail, those features will include things like asking donors for an optional "tip" to Watsi when giving to a patient (expected to net 6-8%), cause marketing products (already a few companies interested), white label, etc.

We will never abandon the 100% model, and I'm completely confident that for as long as there is demand for the service we're offering, we'll find a way to cover our overhead.

Interesting. What Watsi has is beyond what I imagined an ideal online donations would offer.

Kudos for taking the leap Watsi!

I like to poke holes in ideas, so I hope that didn't come across as too negative. I partially funded a patient, and it strikes me as a good sign that I've been refreshing the page to see that she gets the rest of the funding she needs. So I hope you are successful (beyond the people you've already helped, so mad props for that!).

Also, I like the "tip" idea.

HN is bad at subtext, so let me offer you a decoder ring on the subtext of the 'pg story we're commenting on:

YC is working on addressing the problem of funding Watsi's overhead. The point of the service is that end-users don't fund Watsi, they fund patients. In the same sense as you need to take it sort of on faith that Airbnb can bootstrap and maintain a two-sided market for short-term lodging, you should probably take it on faith that Watsi's model is going to work; if you want to make Watsi work well, go fund a patient with it.

There is a real 13 year old girl on Watsi right now who is unable to walk because of a correctible congenital condition. Who cares about the Watsi founders? Go help the girl! :)

Who cares about the Watsi founders? Go help the girl!

I think the point is not that people particularly care about the Watsi founders; but rather, that they care about the hundreds of thousands of other girls whom Watsi won't be able to help if Watsi and/or its founders go bankrupt because they lack a sustainable funding model.

I don't understand the logic there; at least in terms of stopping someone from getting involved: the girls you can help now should be just as, if not more important than the future.

Note, that comes across as snarky via text, but it's not meant to be. I'm just explaining my way of thinking about it. :)

The logic is that it takes time and money to get to where people can be helped. While it is true that Watsi can help people now regardless of whether they will be able to in a year, it's much more effective for Watsi to continue to exist because otherwise another organization will have to pay the startup time and money cost again.

Also, it is entirely possible to donate and also have this discussion, so you may very well be talking to people who both help present needs and express concern for potential unmet future needs.

It's not about whether or not to use Watsi now, but a concern on behalf of Watsi. I'm not going to refrain from donating today because Watsi might go away tomorrow, but I'm certainly concerned about if and how it will still be here tomorrow.

Wow, I'm the embodiment of HN being bad at subtext! :P

On the one hand, I see your point, and I went and helped a little girl (as it happens, a different one). Maybe it doesn't need to be sustainable. It sounds like they've got it covered for now, and if they "only" help a few hundred people before they have to look for other work, that's pretty good.

On the other hand, I don't think it's off-topic to comment on the viability of a business model on a forum about startups. I know it's working in practice, but can it work in theory? :)

Contrary to what you may think, overhead in a non-profit is intrinsically bad. It's a sign of a functional, well-run organization.

Why? Fundraising to cover your overhead costs when you're small is relatively easy but comes increasing harder year after year as you grow.

The reason most non-profits take a portion of donations for overhead costs is so that they can keep the lights on and (hopefully) become better at providing their services more efficiently. Moderate overhead percentages are not a bad thing for non-profits. As a donor you should want the organization that you're supporting to have a way to pay their bills, investing in productivity improvements, and build scale.

I applaud Watsi's commitment to passing 100% of donations onto patients and I'm cheering them on to find a sustainable funding model over the long run.

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