NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, April 11, 2016

Last June, a brand-new nonprofit set a giant goal: Over the summer, they would crowdfund enough money to build an entire neighborhood—100 homes—for earthquake victims in Haiti. They raised the money in 90 days, and by this March ended up building 151 homes, where more than 1,200 people now live.

Bigger, more experienced organizations haven’t always been able to manage the same feat and speed. The Red Cross, which initially planned to build three permanent communities in Haiti—and raised half a billion dollars—changed course after building only six houses. More than six years after the earthquake in Haiti, nearly 60,000 people are still living in tents or other disaster housing that was supposed to be temporary.

The new nonprofit, a Y Combinator-backed startup called New Story, takes an unusually transparent approach to handling money from donors. After watching a video of a specific family, you give money to help build that family a home; 100% of the donation goes solely to that house, while a separate stream of donations funds any operating costs for the nonprofit. (This model, where wealthy donors fund the overhead, so all of your donations can go to people in need, is the same as other new nonprofits, like CharityWater.) As the home is built, you get updates on the progress. When the house is complete, New Story sends another video showing the family moving in. 

Keeping the process visible also helped keep it on track. “What we found was by trying to provide the most transparent experience to the donors, that also helped us provide it to our partner and our builders,” says Brett Hagler, CEO and cofounder of New Story.