First Time Founders with Ed Elson – This Nonprofit Raised $1B to Bring Clean Water to the World

Ed speaks with Scott Harrison, the founder and CEO of Charity: Water. They discuss his journey from nightclub promoter to non-profit founder, how his organization leverages technology to enhance its transparency, and the key strategies behind his fundraising success. Learn more about Charity: Water Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 1:29Ed Elson?

  Scott, we talk a lot about how to make money on this podcast. We talk less about how to give money away. What are your thoughts on philanthropy? And how do you decide where to donate your money?

• 1:41Scott Galloway?

  So just to be clear, I've been extraordinarily unphilanthropic the majority of my life. And the only time I ever gave money before the age of 40 was so I could go to some cool party and hang out with cool people and pretend I was being philanthropic. So I wouldn't describe myself as... Philanthropic, I'm trying to catch up and invest in nonprofits that are really well-run, where I believe that I'll get a great return on investment, and that is they'll have a big impact. And the two areas I'm focused on are mostly our teen suicide prevention and vocational programming for young men.

• 2:14Ed Elson?

  You actually donated to our next founder's nonprofit. What made you want to get involved with this charity?

• 2:20Scott Galloway?

  Simply put, Scott is just an inspiration. I've said that in 100 years, there's a few people I know that I think will be remembered, but I think Scott is right up there. He's brought incredible vision, innovation, design, technology to the world of nonprofit. And I'm not, I want to be clear, I'm not passionate about potable water in Sub-Saharan Africa, but Scott is just such a visionary that you know he'll be a great fiduciary for your money. And just personally, I just think a great deal of him and the transformation he's gone through. So it's, I mean, I just think about it. It really is an inspiring story.

• 3:04Ed Elson?

  Welcome to First Time Founders. I'm Ed Elson. Every month on this show, we talk to founders from a wide range of industries. But one sector we've yet to explore is the nonprofit world. The US is home to over 1.8 million nonprofit organizations, each addressing critical issues in unique ways. Now, 19 years ago, my next guest founded one of the most influential nonprofits in the country with a mission to bring clean water to those without access. Since then, his organization has raised over $1 billion, funding more than 184,000 water projects in 29 countries and providing clean water to over 20 million

• 3:45Ed Elson?

  people. This is my conversation with Scott Harrison, founder and CEO of Charity Water.

• 3:54Ed Elson?

  You are the first nonprofit founder that we've had on this podcast. We've had many founders, a lot of tech founders. We had Bobby Brown, who was a makeup founder. We had Reed Hastings, the founder of Netflix. We've never had a nonprofit founder, so I'm very excited.

• 4:09Speaker 06

  It's a distinguished honor.

• 4:11Ed Elson?

  I mean, we're very excited to have you. And I want to start with your history because it's actually very unusual. So you grew up in New Jersey, you went to NYU for college. That part isn't unusual. But then you started your career, actually, as a nightclub promoter. And here you are today, the founder of one of the largest and most successful nonprofit organizations in America and in the world. That's not a normal career trajectory. So take us from the beginning. Tell us about your upbringing and how it led to your life, not as the founder of Charity Water, but as a promoter in New York City.

• 4:51Speaker 06

  Well, when I was four, my mom almost died. Like you said, I was born in Philadelphia, actually. We had moved to Jersey to get closer to my dad's job. And we had just bought this very ugly gray house at the end of a cul-de-sac in the dead of winter. And we didn't know that we had just bought a house with a carbon monoxide gas leak.

• 5:09Ed Elson?

  Oh, wow.

• 5:10Speaker 06

  And we start getting these strange symptoms, headaches and migraines. And on New Year's Day, 1980, my mom passes out. She's unconscious on the bedroom floor. And she's essentially the canary in the coal mine, which leads to the discovery of massive amounts of carbon oxide in her bloodstream, leads to the discovery of the leak, which was a improperly installed heat exchanger in the basement. And my dad has an HVAC guy friend come over and they ripped this thing out. And I remember this crumpled heater on the curb that really did irreparable damage to our family. And what happened with my mom specifically is her immune system irreparably shut down

• 5:55Speaker 06

  after the carbon dioxide poisoning. And she was disabled and invalid for the rest of her life. My dad and I bounced back. We were only sleeping in the house. We were sleeping upstairs. She was 24/7 unpacking boxes, you know, putting things in the basement and got the brunt of the exposure. So, life had a radical change at four years old when I became a caregiver. Dad was a middle-class business guy, worked kind of in the electrical engineering space. Mom had been a successful writer. She was a journalist. And everything just stopped for her. So, she was allergic. The best way to describe it is she was allergic to the world.

• 6:39Speaker 06

  If it was chemical and if it smelled, it made her sick. Perfume, car fumes, fabric softener. There were signs on the outside of our house, "Keep out, chemically sensitive patient." I remember if I went to church and a lady hugged me and I came back with a little whiff of perfume, I would have to strip naked in the garage, change into surgical clothes, like hospital scrubs that had been washed in baking soda, and then I was allowed in my own house. So, that was kind of, you know, chapter one of life. Very traditional Christian family, nondenominational. My parents prayed a lot.

• 7:19Speaker 06

  They went to church and they really would rely on their faith to get them through, you know, what would be decades of sickness and illness. So, I grew up in that context, going to Christian school, then, you know, a public high school. I wanted to be a doctor. When I grew up, I had dreams of going to Johns Hopkins so that I could get a medical degree and cure my mom and then cure others with her condition. Didn't smoke, didn't drink, didn't sleep around, didn't cuss, you know, was on the good path.

• 7:54Speaker 06

  And then act two started at 18 when I'm came to New York City and somebody took me to a nightclub. And I remember it was called Club USA and there was a slide that went from the balcony into the throng of the dance floor. And I remember going down that slide and feeling like I had arrived.

• 8:14Ed Elson?

  You came out a new man.

• 8:15Speaker 06

  I came out a new man. So I announced to my parents that instead of going to, you know, Hopkins, which I probably couldn't have gotten into anyway. Um, I would be moving to New York City to become a nightclub promoter because I learned that this was uh, a pretty unusual profession that you could party for a living. So if you were not allowed to smoke or drink or have sex or cuss, you could actually do all of these things with reckless indulgence and get paid. If you got the right people in the right clubs, uh, which is where my story intersected with Galloway because he was a customer of mine for many, many, many years.

• 8:50Ed Elson?

  That's, that's the connection.

• 8:51Speaker 06

  That's the connection. Oh, Scott, Scott, I used to host Scott back in those days. My parents are horrified that their only son, you know, is now in New York City, filling up nightclubs before he's even legally allowed to be in clubs.

• 9:06Ed Elson?

  Right.

• 9:06Speaker 06

  And I joined a band. I grew my hair down on my shoulders. So I was playing in a rock band part time. I was going to NYU part time. Just because dad had saved up and, you know, it felt like I should take a couple of courses and eventually mail him a degree. That I never even saw for years. Uh, and I just loved every minute of it. I mean, this was lights and glamour and dinner at 10pm with fashion models and other people's money and other limousines and, you know, it was kind of the, the dawn of bottle service. Where we all realized that you could sell a bottle of absolute vodka for $300. They cost 20.

• 9:46Ed Elson?

  So that was not true before.

• 9:48Speaker 06

  It wasn't. It was. So this is, um, my years were 1994 to 2004.

• 9:54Ed Elson?

  Okay.

• 9:55Speaker 06

  So this was clubs like Lotus, Halo, Sweet Sixteen. You know, this is before kind of marquee for people that, you know, know that club. It was Peter Gation at the Limelight and Tunnel, Club USA, Buddha Bar, Donald Eric. So it was, I mean, I just loved every minute of it. And it also felt rebellious. Yeah. You know, I'm leaving out my childhood, the childhood I never got by having fun and having, you know, illicit fun. Right. So, you know, I played this out for a while and I'm climbing up the ranks and I'm trying to chase models and make sure I own a BMW or Mercedes and have a nice place. And it's exhausting.

• 10:40Speaker 06

  Number one, it's really an unhealthy schedule. Your dinner was at 10:00 PM. The club was at 12:00. After hours was at 4:00 AM. And going to sleep was at noon. High on cocaine, taking Ambien to come down so that you could wake up at 7:00 PM and do it all over again. Sounds good. I don't have a problem with that. And, uh, well, I didn't for a while. I think, uh, I think it was Hemingway that said, you know, going bankrupt, like, you know, it happened slowly and then suddenly. Yeah. So I remember this, this one moment on Houston Street where I was crashing at

• 11:20Speaker 06

  a friend's place and it was noon and I remember taking sheets and comforters and trying to block out the light at 12 o'clock and looking out on Houston Street at people in suits on their lunch break, you know, getting salads. Doing life. Salads. Yeah. They had gone to the gym when I was at the after hours Coke bar. Yeah. And just remember thinking, wow, this is so unhealthy. And, uh, the, the kind of end of chapter two for me happened, uh, in Punta de Lesta in Uruguay. I was on a vacation over New Year's Eve. Uh, I'd been in the business a decade and I just, I had enough of the things that I had been chasing to realize that they were not going to make me happy.

• 12:03Speaker 06

  And I think I realized just how far I had come from this little boy who wanted to be a doctor to help others. Yes. The little kid who played piano in church and prayed and wanted to live a, you know, virtuous, high integrity life. And I missed home. I mean, in some ways, it's kind of like the parable, the prodigal son, you know, he finds himself halfway around the world, covered in pig feces, you know, spoiling everything about his life and like wanting to come home. Yeah. So I came back from that vacation, knowing that a pivot was not needed in my

• 12:46Speaker 06

  life, you know, 180 degree course correction was in order. Yeah. And I got the idea to, you know, I grew up with this kind of Christian principle of tithing where you give 10% of your money to the poor. Well, I thought, what if I gave 10% of my time? What if I gave one year? Penance is probably not the right word, but kind of as a, you know, as a tithe of the 10 years that I had selfishly wasted. And I went and tried to serve others. Could I find my way on a humanitarian mission? And would I have any skills at 28 years old that would be useful to others? So I, you know, I'm a pretty extreme guy. I sell everything I own and I start applying to the famous humanitarian organizations I've tangentially heard of.

• 13:30Speaker 06

  Save the Children, Doctors Without Borders, World Vision, the Red Cross Salvation Army. It turns out that none of these organizations are interested in hiring a nightclub promoter, even for free. So I'm denied by everyone. And I just remember being so frustrated. I mean, here I'm ready to go. I'm ready for the life change and no one will take me. So finally, this one organization writes me back and I dusted off an NYU degree that I'd barely gotten, majoring in communications because it was the easiest thing. And I found this one organization and they said, Scott, if you pay us $500 a month, and if you're willing to go live in post-war Liberia, West Africa, which at the time was

• 14:11Speaker 06

  the poorest country in the world, having just exited a 14-year civil war. They said, we'll take you on as our volunteer photojournalist. And I'm like, great, here's my credit card details. When does the mission start? And they said, a few weeks. So I finally have one organization who is willing to give me a shot at a year. And in some ways, I didn't even know it then, I was uniquely qualified to do this volunteer job as a promoter, as a storyteller. Now, I had been telling the story for 10 years that if you get past my velvet rope, if you spend lots of money in the club, if you, you know, rub shoulders with a celebrity or a movie star, your life has meaning.

• 14:56Speaker 06

  Yeah. So I had actually been promoting 40 different clubs over 10 years, and I got a chance to promote something very different. And this group was a charity that consisted of doctors and surgeons and nurses who would all give up vacation time. They would fly to West Africa and they would offer free medical services to people who had no ability to afford them. And they operated, which was unique, from a 500-foot hospital ship. So an old, kind of broken-down, converted ocean cruise liner had been gutted and turned

• 15:37Speaker 06

  into a state-of-the-art hospital that sailed up and down the coast of Africa with 350 volunteer crew, all paying $500 a month like me, which helped the organization run. So I had never heard of Liberia before. I couldn't have found it on the map. You know, I joke, and I don't think this is hyperbole, I think I thought Africa was a country not made up of 50 some. Geography had been a distant past. You learned. I learned quickly. And my third day there, I had a really important moment where it was called the patient screening. And in advance of the ship with the doctors coming

• 16:18Speaker 06

  into the port, a small team had posted flyers advertising the coming of these doctors throughout the country. And these flyers had pictures of conditions that we treated: cleft lips, cleft palates, flesh-eating disease, facial tumors, people who had been burned during the war who needed reconstruction. And, you know, we arrive at the port, my third day in Africa. We wake up at 5:00 AM, and the government has given us the soccer stadium, the football stadium in the center of the city, to triage the people who had come and put them through our stations and then hand out these surgery cards. And I knew that we had 1,500 available surgery cards. And when we turned up around 5:30 in the morning to the parking lot,

• 17:03Speaker 06

  there were over 5,000 people waiting for us to open the doors of the stadium. And that hit me really hard, seeing a need that was so much greater than what we were prepared to meet. And then actually seeing us turn away, more than 3,000 sick people, who had come, many of them had walked even for more than a month from neighboring countries as the word had spread. And they didn't get a chance to see a doctor because we didn't have enough doctors.

• 17:34Ed Elson?

  So you're working at Mercy Ships. You're doing this work for two years. At what point do you then decide, okay, enough of working for other people. I want to do something myself.

• 17:46Speaker 06

  So I loved it. I took 50,000 photos the first year. I got to watch every single patient pre and post op. And the cool thing was, I actually had a pretty big email list that I developed. So like it or not, you know, you went from getting an invitation to the Prada megastore opening in Soho to Alfred is 14 and suffocating to death on his face with the tumor pictures. So there were some unsubscribes. I mean, back then, email open rates were basically 100%. You sent an email and people opened it. So some people got off the list, but others began to forward it. And the list actually grew. And I think some of my friends were just fascinated, like, weren't you doing coke with Scott like last month?

• 18:31Speaker 06

  Like, where's Liberia? You know, what is this hospital ship mission? So I was blogging a lot. I was sending out photos and videos and I wound up raising money for the organization, over $100,000, just by telling these stories. So I think that was kind of this aha piece that maybe the same gift for promoting could be aimed in a completely different direction and could be used to raise money that helped people get these life-changing surgeries. So the year ended, I just signed up for a second year. And it was really in that second year that I went into the rural villages and I saw people drinking dirty water. And I had never experienced dirty water in my human life. I was born into a middle-class

• 19:14Speaker 06

  family. Water came out of the sink. You know, we bought, I used to sell Voss water for $10 in the clubs to people who wouldn't even open the water because they were drinking champagne instead. So I saw humans drinking toxic contaminated water from brown viscous swamps, from green ponds. And I learned that half of the disease in the country was waterborne. And that half the country was drinking dirty water. So I had this, you know, eureka moment in year two, saying, here we are with not enough doctors, turning thousands of sick people away with stuff growing on their faces. But yet, half the country doesn't have the

• 19:56Speaker 06

  most basic need for health met. And at the time, there were over a billion people drinking dirty water on the planet out of 6 billion people. One in six people alive were drinking unsafe dirty water every day. So I remember showing the pictures I was taking in the villages to the chief medical officer. And at the end of that second year, he just simply encouraged me, says, why don't you go make this your problem? Why don't you go back to New York and bring clean water to everybody in the world? And I was like, all right, I guess I'll try. So the second year ended, I was 30, I was broke, nightclub promoters, at least I was not good at saving money, I was very good at spending it. And I just came back, I had given everything that I had to mercy ships and the people that I'd met

• 20:41Speaker 06

  in Africa. So I came back, really penniless, then I found out that my club promoter partner had not dissolved the company. So I came back to a big tax debt. And he said, sorry about that, but you can sleep on my closet floor for free in Soho.

• 20:55Ed Elson?

  Yeah, I read that you, when you, when you started this out, you started out by reading the nonprofit kit for guys. And as you mentioned, you also turned to your contacts in the nightlife industry. I'm sure you probably turned to Scott Galloway himself. In other words, very scrappy beginnings, is what I would say.

• 21:14Speaker 06

  I'm sure so many founders you've had on here, you know, the, if we really knew what we were doing, We probably wouldn't have done it.

• 21:20Ed Elson?

  Right.

• 21:20Speaker 06

  Or if we knew how hard it would be.

• 21:22Ed Elson?

  Right.

• 21:23Speaker 06

  So I think that ignorance really helped.

• 21:25Ed Elson?

  Common theme that you see, I mean, I think when we hear, when we hear about these stories in retrospect, it kind of sounds like, oh, I started out with my pitch deck. And then I went to the VCs and we raised the money and step one, two, three, four. But it's, the beginning is a mess. So paint us the picture of how messy it really was starting out and just how little you knew about how to tackle this.

• 21:47Speaker 06

  Well, I'll be honest, I don't talk about this, but the actual place that I was staying was a little bit of a drug den. People would come in and do drugs, but it was free rent and the couch was where I could work.

• 22:00Ed Elson?

  Yeah.

• 22:00Speaker 06

  With a laptop. You know, I learned by nonprofit for dummies or whatever, you need a board, you need this thing called a 501(c)(3).

• 22:07Ed Elson?

  Yeah.

• 22:08Speaker 06

  You need to hire lawyers. I didn't have money for lawyers. And in those early days, what I did have was two years of photos and stories. That, you know, Bryan Stevenson from EJI talks a lot about proximity. I had the authority that came with proximity to this issue. I had been in these villages. I had seen wells drilled. I had seen how water changed people's lives and I had the photos and the videos to prove it. So in those early days, I remember going to Double Seven or Lotus and I would get led into a DJ booth and I'm clicking through on a laptop. You know, photos of people drinking dirty water. I remember, you know, people would say, Scott dude, I'll give you money, but you are killing my buzz. Can we?

• 22:53Ed Elson?

  Time and place.

• 22:53Speaker 06

  Can, can we? But I was so passionate about sharing my experience and what I'd seen and inviting them to be a part of it. And, you know, it turns out very little money, maybe no surprise, came from the people who were going to nightclubs.

• 23:07Ed Elson?

  Yeah.

• 23:07Speaker 06

  So those former contacts, the people who were buying bottles were not the ones who were buying wells.

• 23:11Ed Elson?

  Philanthropists. Yeah.

• 23:12Speaker 06

  But the first idea I had was to throw myself a birthday party in a nightclub. On day one during Fashion Week. Nightclub promoters always, you kind of call in a lot of favors. You have a birthday, everybody knows it's going to be good. It's open bar and, you know, everybody comes. So I tried to turn my birthday into the day one fundraising moment. And it was a place called Ten June in the Meatpacking District. I remember putting out this big Plexi box at the door. And if you wanted to get into my birthday party, you had to put $20 into that box. And I actually remember there was a weed dealer who I knew very well.

• 23:54Speaker 06

  And he put $500 in the box. And he said to me, this is the first charitable gift I've ever made in my life, but I trust where it's going.

• 24:06Speaker 06

  And, you know, what I learned as I talked to everyday people was there was a lot of mistrust when it came to charities. There were a lot of people who were cynical or skeptical about where charitable donations went. I would hear, you know, the expression, the black hole of giving charities are black holes. I don't know where my money goes. So I wondered, what if I created a charity where 100% of all the money we would ever raise would go directly to get people clean water? And I wasn't sure how it was a very non-traditional business model. But I talked to lawyers about it and they said, well, if you open up two distinct bank accounts and you promise to put all the public's money in one account that only builds water projects.

• 24:51Speaker 06

  And then you raise overhead in the second account from other people. Yeah, you could do this.

• 24:56Ed Elson?

  Right.

• 24:57Speaker 06

  So I remember going down to the Commerce Bank on Broadway and Bond in New York City and opening up these two accounts. And I promised to that birthday party that all the money would go directly to help people living in a refugee camp in northern Uganda. So I raised $15,000 that first night. I remember we audited it. I take a lot of photos, you know, a bunch of people are counting the money.

• 25:17Ed Elson?

  This is the money from the, from the cash.

• 25:18Speaker 06

  Twenty dollars, yes, 700 people came.

• 25:20Ed Elson?

  Unbelievable, yeah.

• 25:21Speaker 06

  And I take that money and we build our very first well in Uganda. We fix a couple of wells and then we document it so carefully with photos and video and satellite images. So we send people the Google Earth satellite coordinates, pictures and we said, look, this is where your money went. You came, you gave $20 and people are drinking clean water because of you. And that closed loop proof of concept was so.

• 25:50Speaker 06

  Powerful and so unique. Other charities weren't doing that. They were not telling people where their money went. They just kept asking for more and more money. That I realized I was really on to something. So that became kind of the first pillar of how we would reinvent or reimagine charity for this generation. How we would take the cynic and the skeptic and say, you know, come look at us. We're going to do things very, very differently. Yes. The second then follow on idea was, well, wait a minute. If money isn't fungible in the way that we've set up the structure, I can build technology that tracks every single micro donation to the source. Right. If we're going to be building infrastructure in Malawi and Uganda and Bangladesh and India,

• 26:34Speaker 06

  these are real things. They're water projects with actual costs and an actual location. So I remember meeting the founder of Google Earth and he's like, yeah, you could put all of that up. You could be the first charity in the world just to publish all of that completion data on Google Earth, which we then later moved over to Google Maps. So proof became this second core pillar of the organization. And then the third really was just a brand. I wanted to build an inspirational, dynamic, beautiful brand. I wanted to be the apple of charities. The charity that inspired people with hope and opportunity and not shame or guilt. Yes.

• 27:16Speaker 06

  And, you know, I figured if I put these three things together, we might actually have a shot at helping millions and millions of people get clean water. We might actually have a shot at building a movement that tackled this problem in our lifetime.

• 27:31Speaker 06

  We'll be right back.

• 27:41Scott Galloway?

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• 31:21Ed Elson?

  We're back with first-time founders. So I just want to fast-forward to today. Charity Water has now funded more than 184,000 water projects around the world, operates in 29 different countries. It is on track to serve more than 20 million people.

• 31:37Speaker 06

  Yeah, we've already passed that.

• 31:38Ed Elson?

  Already passed it. It has served more than 20 million people. We talk a lot about impact on this podcast and how to make an impact and what it takes to create impact. This is like real impact. This is probably the most impactful organization and founder we might have had on this podcast in terms of actually changing people's lives. So as it stands today, give us the synopsis on Charity Water. What is Charity Water doing today and how is it helping people?

• 32:09Speaker 06

  You know, it's interesting. I mean, in some ways, we're doing the same things as when we started 18 years ago. We've now raised over $1 billion, which is not that much money at this table, right? The people who have sat in this chair. But we've been able to mobilize a couple million people to give that. So the money has not come from governments or primarily foundations or corporations. It's been everyday people.

• 32:31Ed Elson?

  You don't get to go to SoftBank and raise a billion in a night.

• 32:34Speaker 06

  I'll say as well, you know, we've really helped bring awareness to this issue. And I think that the entire sector has grown. We now stand at 700 million people without water on a close to 8 billion population. So we've gone from one in six alive to one in 10, one in 11 alive. So we've actually made huge progress. And I think that's important because, you know, with any of these paralyzing global issues, I think to some people it feels like there's no end point.

• 33:02Ed Elson?

  Yes.

• 33:03Speaker 06

  Right? Ah, we're just sending more money to Africa, you know, sending more money to these. No, we're actually making huge, huge progress. The biggest challenge that I tell our team is, you know, no one listening to this podcast woke up this morning, turned the tap on, took their shower, you know, used filtered water for their coffee, you know, maybe grabbed a bottle on their way to the gym or the yoga studio and said, my gosh, I'm so grateful for the clean water to the privilege that I was born into.

• 33:36Ed Elson?

  Yeah.

• 33:37Speaker 06

  Let me go find a water charity so that I can go help people who are suffering with. We have no customers, right?

• 33:44Ed Elson?

  Right.

• 33:45Speaker 06

  So I think the biggest challenge is how do we get people to even pause and consider the problem that they have never experienced?

• 33:57Ed Elson?

  You've raised more than a billion dollars to date. That's more money than many of the largest, most successful startups in the world can say. And you did it for something where there was no economic incentive for the people who are funding you. So, I mean, I think that you are a lot of things. One of the things that you certainly are, in my view, you are a master fundraiser. What would you say is the secret to fundraising? And what do you think it takes to raise hundreds of millions of dollars?

• 34:26Speaker 06

  I still am looking for that key, you know, the unlock to generosity. I've picked up some things around the world. I'll tell you one. One really powerful conversation I had, I was about to go and ask somebody for $10 million. Young tech entrepreneur, been a part of a multi-billion dollar IPO. And I was flying out to Hawaii and I stopped in San Francisco and I was meeting somebody at the Battery. And he was an older gentleman, I think he was a Goldman Sachs partner for many years. And I said, hey, I'm about to make this ask. So this is, this is more money than I've ever asked a human for. I don't get any of it, right? I mean, a hundred percent of it goes straight to the.

• 35:10Speaker 06

  But I said, how do you feel when someone asks you for a whole lot of money?

• 35:17Speaker 06

  And he said, one word that has just changed the paradigm for me. And it was not what I was expecting. I was expecting him to say offended, uncomfortable.

• 35:29Speaker 06

  And he said, I feel flattered. He said, I feel flattered that they think I would be that generous. And I wound up making the $10 million ask, actually getting a $12 million gift from that family. And I had an experience a couple of years later where I was going to make another $10 million ask. And I asked the founder, and I did it in a really interesting way. And it was a kind of a beautiful proposal that spoke to the way that he had made his money. And he got back to me a couple of months later after getting this proposal. And he says, you know, that was really beautiful. Thank you for honoring, you know, me and my family. He said, I have only one question. Why did you ask me for so little?

• 36:15Speaker 06

  And I said, well, because I didn't have the guts to ask you, ask you for 40 million. And he said, well, I'll do that then.

• 36:23Speaker 06

  He said, I need 10 years and I can send four right now.

• 36:28Speaker 06

  I think those two things, that it's okay to stretch someone, it's okay to ask them to think about radical generosity, to think about using their resources to end the needless suffering of others, maybe in a way that they hadn't even contemplated before. And I still think like, maybe we're just not asking for enough. Yes. You know, maybe we're just leaving so much human capacity for good, for generosity on the table by not being bold. Somebody told me once at fundraiser, listen, there's only three things that people can really say. Yeah. And if you're okay with all three of them, then you just gotta keep showing up.

• 37:13Speaker 06

  You know, so what could people say? They could say no. Right. They could say less, or not now. And if you're okay with all three of those, right? And how many founders here have had, you know, no, you know, pitch decks and people probably crapping on their ideas, crapping on their pitch decks. So you have to really be able to take a lot of no's. Yeah. And, you know, I guess the fourth category is when people say they're gonna do it and they don't do it. That's probably the most frustrating, you know, I'd rather just not be strung along. But, you know, I remember that I go home, if I hear seven no's in a day, my kids still think I'm great. My wife hopefully still thinks I'm great. And then you get up the next day and you go ask and ask and ask. And, you know, there's something

• 37:58Speaker 06

  almost freeing about the fact that none of it is personal gain. You know, I froze my salary six and a half years ago. I haven't even taken a, you know, cost of living increase. I wanted to kind of take, you know, that incentive completely out of the work. So if I raise, you know, a hundred million this year, or a billion for the poor, it doesn't impact me at all, right? It's money going through your hands. And I, I remember just an early driver, I was sitting with a tech founder, you know, unicorn startup, multi billionaire. And over the years, a lot of people have said to me, why don't you just start a company and make a lot of money and give it away?

• 38:42Speaker 06

  I would ask you that question. You seem like, you know, it's just very logical. I probably had hundreds of people say, you know, why don't you go start something, dude? Like, ring the bell, you know? And I would always ask them, how much have you given away?

• 38:57Speaker 06

  And let's say early on, my number was, okay, well, I've given away 50 million through Charity Water. I've given away 250. Now at a billion, I'm starting to thin out.

• 39:05Ed Elson?

  Yes.

• 39:06Speaker 06

  Those people. I know very few founders and probably very few founders, you know, sitting at this table, who have given a billion dollars to the poorest people in the world. And, you know, I think we're in the beginning of the second inning. So I would hope if I can continue to lead this movement and continue to build the organization, you know, that number might be 50 billion has gone through my hands, making a few hundred grand a year as the CEO of the organization, you know, being able to have a fine living and provide for my kids. But the billions, 50, 100 billion dollars has gone to the poorest people in the world. So that's our job is to inspire people, is to kind of winsomely invite them to make their legacy

• 39:50Speaker 06

  through generosity more expansive than perhaps they even thought possible.

• 39:56Ed Elson?

  I want to go back to the 100% model, you know, you made that commitment. You're going to donate 100% of, or 100% of the public donations are going to go directly into these causes. And that's your promise. I have a lot of friends, it sounds like you know these people too, who say they don't really trust charities.

• 40:15Speaker 06

  Yeah.

• 40:16Ed Elson?

  You know, I would give, but I don't really know what they're going to do with it. You know, I've heard of this charity as a scam and that charity is a scam. And now we have a lot of distrust around NGOs in general. How do you counteract that? And I'll also ask, to what extent are those concerns warranted? Like, how many charities actually are scams? And then how do you build trust among your donators?

• 40:46Speaker 06

  Many, many, many charities are doing really great work.

• 40:50Ed Elson?

  Yeah.

• 40:50Speaker 06

  At great human sacrifice, you know, people who are living way beyond the status that they could be living at, you know, even working at Charity Water, you know, if I think about my software engineers or our product people or our water programs team, they could be making more money and getting better benefits and stock bonuses out in the, you know, the for-profit sector, and they have chosen to serve. So I think there's a lot of good. I think there's also a lot of opacity. And you know, what we have been really trying to kind of preach as a value is build a transparent organization, you know?

• 41:34Speaker 06

  And I believe donors are open to myriad value propositions. If I told you right now that the biggest need we had at Charity Water is to fix our copy machine and it's 1,500 bucks to get the Elson guy to come, you would give 1,500 dollars right now to meet a specific need.

• 41:52Speaker 02

  Right.

• 41:52Speaker 06

  That's like the most over heady thing.

• 41:54Speaker 02

  Right.

• 41:55Speaker 06

  But have it helped the organization move the mission forward by fixing the copy machine? You would be willing to do that and write that check and pay for that overhead. But you would know where your money's going. And I think with a lot of organizations, it's just, you know, they do an imperfect and sometimes a very bad job at just telling people where the money's going. Is it going to sit in an endowment for the next 50 years? Is it going to overhead? Is it building a new building? Is it going to the field, you know, to deliver direct services? So our model has, you know, the separation of kind of the church and state. You know, these bank accounts get audited by KPMG every year. And for the last decade plus, they write an opinion. We force them to audit the 100% model and then post that opinion on the website.

• 42:39Speaker 02

  Yes.

• 42:40Speaker 06

  Like to basically forensically audit every donation we use for overhead needs to have an audited paper trail. So trust, I think, is the, you know, the overarching value. And, you know, one, one

• 42:56Speaker 06

  detail of the 100% model that most people don't know is that we actually even pay back credit card fees so that there's perfect integrity when we say 100%. So if you went online after this podcast and you gave 100 bucks on your Amex, I'm going to get 97 from your donation. I'm actually pulling $3 from the overhead account. Adding it to the 97 I got after Amex took their transaction fee, and then I'm going to send and track and prove your $100. That'll cost me $800,000 this year to raise for overhead, to pay back Mastercard, Visa, and Amex, and make those donations perfectly whole. Yeah. You know, we've raised over $1 billion. I've never used donor money for a business class ticket for myself.

• 43:40Speaker 06

  I'm doing 80, 90 flights a year. There's a value of stewardship. You know, it's, do I want to fly coach in Air Ethiopia? No. But am I going to spend an extra 10 grand of donors' money? You know, I haven't been willing to do that. Yes. Believe me, I'll take all the upgrades that the airlines want to give with status. I've had a donor, you know, give miles, you know, in other circumstances. But there's kind of these values that you can put into an organization that really help you build trust. Yeah. And that's what I'm hoping. And the 100% model has just allowed us to do that by design. We have a product that we're launching in the fall called Waterproof that will track every single donation. So if a kid goes out and sells lemonade

• 44:23Speaker 06

  and gives $6.13 to their parents, and their parents go on and give $6.13 online, we can track that to a well in Malawi and show them a satellite image of the well, exactly how much that project cost, and all the other people they shared it with. And, you know, that, that helps. That really helps win trust. And it helps win repeat donors as well.

• 44:49Speaker 06

  We'll be right back.

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• 47:09Ed Elson?

  We're back with first-time founders. On the operational front, the nonprofit structure versus the for-profit structure. There's a debate in society about when nonprofits make sense and when for-profits make sense. And a lot of people believe that nonprofits... By virtue of the lack of economic incentive are just overall less efficient. They're slower, they're maybe more bureaucratic than a for-profit organization that makes money. Maybe they attract not as great talent, for example, because you can't pay them as well as you could at a for-profit. What is your view on that?

• 47:49Ed Elson?

  Is there truth to that skepticism around nonprofits? And how have you pushed back against that? How have you made your organization as efficient as some of the most well-run companies in America?

• 48:04Speaker 06

  It's interesting. So when our donors and many of our overhead donors, so I should just clarify. The way that we pay for the overhead is a multi-year giving program called The Well.

• 48:14Ed Elson?

  Yeah.

• 48:15Speaker 06

  It's 135 founders, entrepreneurs and families. And the goal is to get that program to 200. So that's growing every year. So 135 people currently pay for all of the overhead so that millions of people can give in the other bank account in the purest way possible. So that maybe just to demystify that.

• 48:36Ed Elson?

  Yeah.

• 48:36Speaker 06

  So I kind of have 135 LPs.

• 48:38Ed Elson?

  Yeah.

• 48:39Speaker 06

  I have to keep them happy. They're our investors. Now, those people, because it's the founders of Spotify and Pinterest and LinkedIn and, you know, a bunch of people, Shopify, a bunch of people who have been on this podcast. They know that an organization is only as great as the talent that you can recruit and then retain. So they don't mind building the organization as long as it's efficient and transparent. When they look at our numbers, they can't believe how much we do for how little. So the overwhelming sense is we're way more efficient than their businesses, than the ROI that they would expect to get from almost any action.

• 49:21Speaker 06

  You know, there was a time when, you know, almost every employee at Charity Water was raising a million dollars. You know, it was like a million dollars revenue. I mean, there's, there's not that many companies that are doing a million dollars of revenue per employee. We're probably at 900,000 now or so. So they, they've always kind of appreciated that efficiency. I will say that it is really hard. Because of the nonprofit class to retain talent. I remember in the early days in New York, we would lose an engineer at Google who would triple their salary. And so that is just a challenge that you're just stuck with. We did one interesting thing to meet that.

• 50:00Speaker 06

  We designed a program called The Pool where founders can donate equity and that gets profit shared among our employees. So our employees had a little bit of Uber stock. They're a bunch of founders as they're building a company that'll pledge 1% or 2% of their personal equity into a bonus program. So, you know, it's still, they're not ringing the bell. I mean, this is, this is not significant income, but it's, it's helped us feel a little more like a for-profit.

• 50:31Ed Elson?

  Yeah.

• 50:31Speaker 06

  By design.

• 50:32Ed Elson?

  Yeah.

• 50:33Speaker 06

  But it's a big challenge and I think, look, we don't really hang out with other nonprofits. We're hanging out with, you know, I'm taking inspiration typically from high-growth startup culture.

• 50:43Speaker 09

  Right.

• 50:44Speaker 06

  I took Daniel Ek from Spotify to Africa and I think Spotify had 900,000 paying subscribers. And he told me in the back of a Land Rover, he said, you know, I stood up in front of the company and I said, we're going to 100 million paid subs and we're going to do it in 10 years. I think it took him 11. And he's what now at 300 million, going to a billion? These are the people who have inspired me over the years, these really big global thinkers, maybe less than, you know, someone trying to keep the lights on in a nonprofit.

• 51:18Ed Elson?

  I know that you've used virtual reality to tell the stories of what's happening at these water projects. You've used drones with cameras to film what's happening.

• 51:27Speaker 06

  Yep.

• 51:27Ed Elson?

  You're extremely active on social media. Talk, talk about the importance of leveraging technology and I think using social media to keep your business growing. It seems like it's been endemic to everything you've done.

• 51:42Speaker 06

  It's also getting harder. So, you know, we were, we were the first charity to get a million Twitter followers. I remember speaking at Twitter headquarters where there were 38 people working at Twitter. We were the first charity to use Instagram on morning one, when they opened it up to organizations. So, social media was a big part of our early growth.

• 52:07Speaker 06

  It's really hard to get people's attention right now. So I would say that our challenge has never been greater. You know, click through rates are what 0.6% now? Unbelievable. So how do we get our media scene is, you know, amidst all of the scrolling, amidst the diminishing attention spans, you know, the volume, I woke up this morning and I had 200 emails, like I batch deleted 140 maybe? Yeah. Including a bunch from charities like mine doing really good work, but I didn't have time to take in their content this morning, you know, as you get ready for your day and you know, and the, the stuff coming in from your team that needs response.

• 52:49Speaker 06

  So I, I think we're thinking about what are the tools of the future that are gonna allow us to move people towards compassion, to be generous. So I think charities have it harder now, maybe in this glut of information world where we're really thinking about it, it's, it's all about us, like everything is personalized. The technology, you know, I've, I associate a lot, so I'll see a piece of technology and wonder if that could be used for good. I'll give you two examples of that. When Nest came out many years ago, I saw a donor change the temperature of their vacation home on their iPhone. And I was like, whoa, if you can have a smart home, you could have a smart well.

• 53:36Speaker 06

  And, you know, we had no R and D budget, so I went and convinced Google to give us a bunch of money for R and D to build a sensor. And we made 3,000 sensors that we installed in rural Ethiopia and we connected 3,000 wells to the cloud. And in that pilot, we got the largest data set in the history of the world, over a billion liters of flow. And that project is still ongoing and very simple idea, like when a well breaks that has a sensor on it, a mechanic gets dispatched, turns up on a motorbike with tools, fixes that project, the community pays for that repair, and then they move on to the next one. So, you know, using a, a smart thermostat.

• 54:23Speaker 06

  The same idea to create a well where water can continue to flow over time and you know the up rates, you know that it continues to work in year three, or year seven, or year 10 is association. So that's a, that's a really exciting sensor program that's still going on. We're working on four different sensors now for different water program types in different stages of R and D. And we're raising all that funding separately as well. So that's not actually coming from the public donations. You know, that's an R and D fund. Right. The second, you know, just example, I remember when VR first came out, do you remember it was the Samsung phone that you would slide into that had gear VR, right?

• 55:05Speaker 06

  And then Google had that little cardboard box. It was Google. So I remember going somewhere, some conference, and it was Marriott and they put a headset on me and I was in the penthouse in Dubai, looking at Dubai. And I just remember thinking, wow, I can take people to Ethiopia. Yeah. Or Malawi, or Nepal, to a village without water. And, you know, we're, we're pretty scrappy too. There were no VR cameras on the market. So I got GoPro to donate eight GoPros. And I found this guy, Chris Milk in LA to turn it into a 360 rig. And we went to Ethiopia and we shot this beautiful eight minute VR film of a 13 year old girl

• 55:48Speaker 06

  who gets clean water for the first time in her life. And people would put on the headset and see the swamp that she was sharing with animals. It was fecally contaminated. They saw the rig, the million dollar drilling rig with Ethiopian drillers roll into her village and jump out and start looking for groundwater. There's this moment where they strike water and her father picks this little girl up and he's dancing and he's spinning her around.

• 56:21Speaker 06

  And then at the end, you watch her walk to the well, pump it and taste clean water for the very first time in her human life. And, you know, as primitive as the technology was, we would put headsets on people and they'd be weeping. You know, eight minutes later, they have, you know, tears streaming down their face. And we wound up using that film to raise millions and millions of dollars. We took it to our Met Gala and, you know, after dinner served to 350 people in black tie, we served 350 VR headsets on trays. And we pressed play at the same time. We took everybody out and back in eight minutes. And the minute the film finished, we just asked them for money. We helped 100,000 people get water in that moment.

• 57:03Speaker 06

  So I'm always wondering, how can we use technology to further the mission? Which is really simple. The mission is just to get everybody on earth clean water.

• 57:12Ed Elson?

  Yeah.

• 57:13Speaker 06

  Yeah, that's the drop the mic moment. There is a finish line. When 703 million people have water, we're done.

• 57:19Ed Elson?

  Done, yeah.

• 57:21Speaker 06

  It's a world where every human has the most basic need for life met.

• 57:25Ed Elson?

  We talk a lot on this podcast about money, how to build a profitable business, how to get rich. That's one of our big themes, which, you know, I don't think that's a dishonorable cause, but I do think that we underlook on this podcast, the meaning and the value of service and what it can do, not just for other people's lives, but for your own life.

• 57:53Speaker 06

  Yeah.

• 57:53Ed Elson?

  And what it can do to your own happiness and the impact it can have. So for someone who's listening to this podcast, and you know, there are two parts. There's the life of money and wealth and the fame and the glory that comes with that, or a life of service and helping others and philanthropy. Make the case for our audience for going the latter route. What is the value in living a life of service and helping other people?

• 58:25Speaker 06

  I mean, I think I was almost a slave to the consumerism that I was pursuing, all the markers of success. And, you know, however, and I've heard this actually from a lot of our donors, you know, a lot of people will have a number in mind. And whenever they reach that number, the number changes. And, you know, I'm worried that if you live that life...

• 58:49Speaker 06

  You know, it's almost like the cartoon, right? Like, the carrot is just out in front of you. Yeah. And, you know, it's consumption and more houses and more planes and more cars. And, you know, I, for me, I'm only speaking personally, it didn't bring happiness. So, you know, the animating quote in my life is almost 17 years ago. There was a guy who worked for me and he was passing a New York City bodega, a deli. And there was this saying on like one of the boards outside, do not be afraid of work with no end. And it came from an ancient, like rabbinic text, do not be afraid of endless work.

• 59:31Speaker 06

  And in some ways, you know, I think the one path is do, it's like endless spending, endless attaining, endless consumption, endless accumulation, maybe. Or endless service. And, you know, I love that idea of, you know, if, if your work, if the work is showing up and saying, you know, first, like, how can I be a great husband? How can I be a great father? How can I be a great friend?

• 1:00:03Speaker 06

  How can I be a great leader, you know, of an organization? And how can I serve? How can I make the biggest impact to people living, you know, close to me, in my local community, in the global community? There's no finish line to that, right? It's the same way that there's never enough. There's no finish line, but you get to look back and like, oh, wow, we've helped 20 million people get water. Okay, hopefully I get to look back and say, oh, we've helped 100 million people on planet Earth. We've, we've got this problem solved. You know, I, I was at Madison Square Garden not too long ago with my wife. And, you know, Madison Square Garden holds a little less than 20,000 people. And it was sold out for a concert.

• 1:00:49Speaker 06

  And I was like, we've done this a thousand times. Like, you would have to build a thousand Madison Square Gardens to contain 20 million people.

• 1:00:59Speaker 06

  I was sitting in a thousandth of the impact. And I haven't met these people. I'm never going to meet 20 million, 20.2 million people with water. But that's the, that's the pursuit. How do we, how do I use what I've been blessed with, my time, my talents and my money and my personal money as well? I also believe in giving. I have to eat my own dog food. You know, I need to be as generous as I'm asking other people to be. How do I use that in the service of others? And it's, I think, you know, provides for a fulfilling life where you know that it matters.

• 1:01:42Ed Elson?

  Scott Harrison is the founder and CEO of Charity Water. Scott, this has been inspiring. I hope it was inspiring to others and I really appreciate your time.

• 1:01:51Speaker 06

  Thanks for having me.

• 1:01:56Ed Elson?

  Our producer is Claire Miller. Our associate producer is Alison Weiss and our engineer is Benjamin Spencer. Thank you for listening to First Time Founders from the Vox Media Podcast Network. Tune in tomorrow for Prof you Markets.

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