A Famed Business Accelerator Opens the Door to Nonprofit Start-Ups

Tech start-ups are hot these days, and investors are fighting to take risks on them. By contrast, fledgling charities have to spend a lot of time and effort proving themselves to foundations, with no guarantee that they’ll get any money.

Y Combinator, a successful start-up accelerator in Silicon Valley, is working to bridge that divide by applying its model for up-and-coming tech companies to promising nonprofits.

Young people see the lack of support for nonprofits, and it turns them off, says Kate Courteau, director of nonprofits at Y Combinator: “We’re missing out on a lot of really bright young individuals who are not stepping into the nonprofit space, not tackling big world problems.”

Y Combinator has helped businesses like Dropbox, Optimizely, and Reddit get off the ground. It provides advice, technical support, and $120,000 in seed funding in exchange for a share of equity in the companies.

Last year, Y Combinator began working with small nonprofits that are just getting started. Nonprofit start-ups receive a $100,000 donation; half from Y Combinator and the other half from a company that has graduated from the program.

So far, a dozen nonprofits have gone through the intensive three-month boot camp, with four more slated for the next session, which starts in June.

Nonprofits and businesses face many of the same challenges as they get started, like talking to potential clients and figuring out what they need, notes Ms. Courteau. “We basically put everyone into the same group,” she says. “We don’t pull out the nonprofits and teach them something dramatically different.”

One-On-One Coaching

Y Combinator doesn’t have a formal curriculum. Its partners provide one-on-one advice to the start-ups, and the organization hosts weekly dinners that feature talks by prominent tech executives.

“Different teams will have different experiences,” says Edith Elliott, chief executive of Noora Health, one of the nonprofits that has completed Y Combinator. “It’s really what you make of it.” Noora Health uses video lessons and in-person training to teach important health skills to family members of poor hospital patients in India to help them care for their loved ones. And it seems to be working. There’s been a 36-percent reduction in complications among patients whose family members received the training and a 24-percent decrease in hospital readmissions.

Ms. Elliott credits Y Combinator as a major factor in the organization’s growth. When the nonprofit started the program in 2014, it was working in one hospital in India; now it’s in 16.

Being part of Y Combinator allowed the organization to focus intently on improving its program and expansion. It also helped Noora Health’s founders realize the program didn’t have to be perfect before pitching it to additional hospitals, she says.

Says Ms. Elliott, “Y Combinator said just be a little gutsy and get out there and try.”