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Y Combinator to Fund Nonprofits

Starting today, you can apply for a spot in Paul Graham's prestigious program.
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What do multi-million-dollar start-ups like Reddit, Omnisio, and OMGPOP have in common? They all launched at Paul Graham's start-up incubator, Y Combinator.

In 2013, a new kind of start-up emerged: a nonprofit called Watsi that directly funds medical treatments worldwide. Today Graham announced he'll be funding others like it, starting next winter (applications are due Oct. 21). 

Rather than invest in these start-ups and take a 3 to 10 percent stake, Graham said the funding will be a "charitable donation." "We had a hypothesis that many newly founded non-profits could benefit from the same techniques we use to help start-ups," he wrote on Y Combinator's site. "We tested this with Watsi in the Winter 2013 batch and it worked wonderfully."

The program kicks off in Mountain View, California and lasts from January through March. Once a start-up is accepted, Y Combinator will donate $11,000, plus $3,000 times the number of founders. Non-profits will go through the motions like any other for-profit and be required to present during Demo Day 2014. Of course, investors will be in attendance, but it remains to be seen whether they'll donate or invest in a start-up. 

However, judging by Watsi's success as a crowdfunded platform--it went from funding four medical clinics in Nepal to launching 13 clinics in around the world--the association with Y Combinator should at least pique their interest. 

"Fundamentally this is an experiment, just like YC itself was at first," said Graham. 

IMAGE: Robert Scoble/Flickr
Last updated: Sep 6, 2013

WILL YAKOWICZ | Staff Writer | Reporter, Inc.com

Will Yakowicz is a reporter at Inc. magazine. He has covered business, crime, and politics at Patch.com, and his work has been published in Tablet Magazine and The Brooklyn Paper. He lives in Brooklyn, New York.




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