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Comment by mikegagnon | Hacker News Reader

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

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> 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).

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.

http://www.coca-colascholarsfoundation.org/quest/relentlessl...

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

> 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.

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…

*sensible

thanks

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