11/26/2014 04:00 pm ET Updated Dec 06, 2017

Reinventing the Non-Profit: An Interview w/ Scott Harrison from Charity : Water

(click to listen)
(read the entire interview here)

Not too long ago, Scott sat in a limo w/ a bottle of fine liquor, a Rolex and an armful of "beautiful people." Major companies paid him mountains of cash just to be seen with their product in hand. From afar, it looked to many like he had it made.

He lived the life only Super Bowl advertisements tend to capture.

After one long night of partying, he had an awakening. He needed to have impact in world -- impact that would grow beyond filling his wallet. 

We begin our chat deep in the throngs of Scott's pivotal career shift and then he shares the intimate workings of his non-profit, Charity : Water.

He shares how he maintains the 100% model, how he pushed through fear of failure, and how he transitioned from the see-saw life of party promoting to start one of the most successful non-profits of our time. 

Enter my challenge to you: My 30th birthday is quickly approaching (it's January 10th). I will be donating my birthday to help raise funds for Charity : Water. I challenge you to join me. Are you in?

If you'd like to help me out with my birthday, click here to be put on the list. As a bonus thank you, I'll give you a free e-copy of the guide Micro-Roasted Writing: the change-makers guide to writing with impact.


(Enter Scott)

Mark Guay: Can you take us back into the moments where you had just come back from New York City and thought about calling it quits? How did you push through?

Scott Harrison: There's one really powerful moment. I wanted to reinvent charity, and I thought the biggest problem people had with charities was they didn't really know where their money went. Charities typically put people's money in one giant bucket and they do a bunch of stuff, and I would hear from my friends "Charities are just black holes."

I had an idea of separating the money that you would use for overhead and everything else, and the money that you would use to actually fund your mission - in our case it would be clean water projects around the world - and effectively starting two businesses from scratch and trying to run them in perfect balance at the same time. That meant that all of the money we would ever raise from the public we couldn't touch: we could never use it on salaries, or payroll, or office, or even flights to go and develop these projects. We would have to convince another group of people that it was cool to pay for overhead.

We limped along for the first year. We had a tiny, tiny staff, scrapping here and there for the overhead money, but we'd raised millions for clean water. That 100% message was really powerful. It was, we believe, getting a lot of people who were not giving, reengaged, saying "Okay, well, if the charity's going to use up 100% of my money, maybe I'll give."

A year and a half in, we are about to run out of money to run the organization. The few employees that we had, who all had taken massive pay cuts to come with the organization (or certainly could be making a lot more somewhere else) were about not to get funded, but we had all this money in the bank for water projects.

And it was interesting - the advice I got from a couple of people was "Borrow from the public's money! You can't go bankrupt! Just take some of that money and no one will ever know! You'll pay it back later. Money's fungible."

I remember just being outraged at that idea.

At that moment, a complete stranger took a two hour meeting with me in the office, left the meeting, and wrote a million dollar check for the payroll overhead bank account, and we went from a few weeks of funding to over a year.

He said, "I believe in your vision. You just need more time." That was incredibly, incredibly powerful. Over that time, basically the extra time allowed us to go and find a lot of other people who were passionate about paying for the staff, paying for the operations, paying for the flights, so we could continue this 100% model.

That was the moment where we were almost dead in the water. We wouldn't have borrowed from the public's money, but we could've possibly shut down and had to reboot with a different business model.

Mark Guay: Can you talk a little bit more about how you maintain that 100% of donations to the cause?

Scott Harrison: Yeah, it's a fair question. Let me first just say that I don't go out there and preach the 100% model for everyone. It is incredibly difficult. In fact, I try and talk most social entrepreneurs out of it. It was right for us. It was right for the problem that we were trying to solve, which was we think there's a huge pot of money and a lot of people aren't giving because they don't trust charities.

What I really believe is that charities should just tell people where their money goes, and that they should be transparent with where the money's going.

The how is really simple - it's a hundred people that make up a giving program called The Well, and they sign up for three year commitments. The commitments begin at about $60,000 a year and go all the way up to two million a year. That allows us to plan for growth, make sure that we don't just raise enough this year and then go bankrupt next year. What's been great is the program is now in its fourth year, and we're seeing people as they end their three year commitment, not only sign up for another three years but up their commitment, sometimes even by as much as 10x. So that's been really exciting.

That's how we do it. A hundred people pay for the entire operations of charity: water - about 70 staff here in New York. That's made it possible for about half a million people to give two water projects in a completely pure way.

We're so crazy about the integrity of the 100%, we even pay back credit card fees. So if you were to raise $1,000 for your birthday, and AmEx took their 3% off the top, and we only got $970, we make up the difference. Those hundred people actually kick in to pay for the credit card fees we never even received from you or your donors, so that we can send the intended gift in its entirety to the field.

Mark is an educator and the voice of The Traveling Cup Podcast where he helps change-makers have greater impact in their work. Subscribe to his newsletter here.