Silicon Valley Incubator Favors Nonprofits With Sustainable Funding

An article in Financial Times looks at the four nonprofits selected to participate in the next cohort at Y Combinator, the prestigious start-up incubator in Silicon Valley. Though most of the incubator’s participants are for-profit companies, a handful of nonprofits have participated since 2013. One requirement is that they demonstrate a sustainable funding model.

“Most nonprofits would do well to look a little bit more like for-profit companies,” Sam Altman, Y Combinator’s president, says in the article. “They need to have an intense focus on growth, and an intense focus on focus.”

All participants get a chance to present their ideas to venture capitalists, entrepreneurs, and angel investors. But there is one difference: Commercial participants receive $120,000 in seed capital in return for Y Combinator receiving a 7 percent stake in the company. Nonprofits instead receive a charitable donation of $100,000.

One of the four nonprofits participating this summer is 80,000 Hours, a group founded by William MacAskill, associate professor of philosophy at the University of Oxford, whose book Doing Good Better advocates for the effective altruism movement.