The New York Times
By: Nicole LaPorte
April 13, 2013
TWO years ago, Chase Adam, a Peace Corps volunteer in Costa Rica, was riding a bus through a town called Watsi, when a woman got on board asking for money. Her son, she said, needed medical attention and she couldn't pay for it. As the woman walked through the bus, she showed people a copy of her son's medical record. Mr. Adam, who is now 26, noticed that nearly everyone donated money.
The experience gave him an idea.
"I thought it'd be really cool if there was a Kiva for health care," he said, referring to the crowdfunding Web site that allows donors to provide microloans to entrepreneurs in developing countries.
Over the next several months, he devoted his free time to creating a business plan for an online start-up that he named after the town where he got the idea. Watsi, which started last August, lets people donate as little as $5 toward low-cost, high-impact medical treatment for patients in third-world countries.
The procedures range from relatively simple ones like fixing a broken limb to more complicated surgery -- say, to remove an eye tumor. But the treatments generally have a high likelihood of success and don't involve multiple operations or long-term care.
Operated out of an apartment in Mountain View, Calif., Watsi works with nonprofit health care providers in 13 countries, including Cambodia, Nepal, Guatemala and Ethiopia. The providers identify patients meeting Watsi's criteria; the providers themselves have been vetted by Watsi and its medical advisory team, which includes Dr. Mitul Kapadia, director of the physical medicine and rehabilitation program at Benioff Children's Hospital of the University of California, San Francisco, and a half-dozen other doctors and medical professionals.
The profiles of the patients are posted on the Watsi site, and the online community begins donating. Medical care is given when the health partners decide that it is "medically appropriate," Mr. Adam said. Sometimes that care is given before money is raised on Watsi, and the profile remains on the site so that fund-raising can continue. Watsi maintains an operational reserve for this purpose, he said.
Watsi represents the next generation of charities dependent on online donors, evolving the model started by sites like Kiva. With just a few mouse clicks, Kiva users, say, are able to lend money to a restaurant owner in the Philippines -- and to examine her loan proposal and repayment schedule, to read about her and see her photograph.
Charities have long recognized the importance of photographs and narratives in soliciting donations. Watsi's Web site, too, shows vivid images of its patients, and tells their stories. For example, a 9-year-old girl in Myanmar who needs eye surgery has had to miss a year of school because of her condition.
"People like to feel like their donation is making a difference to an individual," said Timothy Ogden, managing director of the Financial Access Initiative at New York University's Robert F. Wagner Graduate School of Public Service. "That's how they like to give -- where there's a face and a personal connection."
While Kiva offered pictures and much more from the start, information about its own operations was not always easy to find on its site. In 2009, when donors learned that loans weren't going directly to the people in need but to microfinancing institutions that had already made the loans, there was an uproar.
Even though the model makes sense -- microfinancers play an important role in vetting individuals, and by giving them a loan upon request, the borrower does not have to wait weeks or months for money to be raised online -- Kiva was criticized for a lack of transparency. It has since clarified how it works.
The kerfuffle pointed out how much information the public demands in the Internet age, particularly when it comes to nonprofit groups, where "the general public is skeptical," Mr. Adam said.
As a result, organizations like Watsi are trying to extend their microlending transparency to themselves. On Watsi's Web site, there is a Google Doc -- an online document that can be shared by various approved users, and updated in real time -- that lists details like the name of the doctor providing care, whether that care was delayed for any reason, a screen shot of the PayPal funds transfer, and whether the treatment was successful. The document also shows Watsi's monthly financial statement, which lists the cost of office supplies, salaries and travel expenses. If any problems occur during or because of treatment, donors are notified by e-mail.
Mr. Adam said his approach was partly in response to the Kiva controversy. But he said he found inspiration in other nonprofits like Nyaya Health, a nongovernmental organization started by Yale graduates that provides free health care in Nepal. Nyaya, which is a Watsi medical partner, has a health wiki that lets people upload the organization's monthly financial reports and minutes from internal meetings.
"I think there's a new batch of these nonprofits starting to emerge," Mr. Adam said. "They're dedicated to helping people understand how things work."
Not that this makes everyone comfortable. After one patient who received funding from Watsi did not survive surgery, some health care partners were "a little spooked," Mr. Adam said, given that the doctor's name was listed on the Watsi site. "Doctors don't want their names to be associated with failure," he said, adding that as a result of that, some medical partners briefly stopped approving riskier treatments as a way to avoid more undesirable outcomes.
And when Watsi began publishing its financial statements, the chief financial officer "was very scared," Mr. Adam said. "He was like: 'What if I made a mistake? People are going to crucify me!' "
People did find a few minor mistakes, as it turned out. "They e-mailed us, and we solved the situation in five minutes," Mr. Adam said. "What we've found is that by being transparent, we're actually crowdsourcing a lot of our work." In effect, the public is "reviewing all our financials, which is fantastic," he said.
But is a Google Doc enough to make donors feel confident about a group's credibility? "Certainly, I don't think it hurts," Mr. Ogden said. "But do we know that the data they're providing is true?"
"We have a big problem in nonprofit data circles in general about the quality of data," he said, because "the rules for accounting for nonprofits are so lax."
Mr. Adam says such concern is precisely why his organization shows monthly statements line by line. "We provide much more detail about how things actually are working, and specific costs, such as Web hosting and salaries," he said. "You see some of that on 990 tax forms, but not nearly to the degree of resolution that we have."
WATSI recently participated in an incubator program at Y Combinator, which provides start-ups with seed money along with mentoring. So far, Watsi has raised about $200,000, which has paid for treatment of more than 270 patients.
But as those numbers grow, providing detailed information about each patient and his or her care could prove difficult. Dr. Paul Polak, a social entrepreneur and author of "Out of Poverty," said that much detail was possible in a small operation with few patients, but he asked: "How are you going to do that when you have 50,000?"
Mr. Adam says Watsi is becoming more streamlined. It is developing a system to let its care providers upload patient information directly to a central database. Currently, Watsi enters that data manually into the Google Doc.
Before entering the Y Combinator program, Watsi was paying for an average of three patients a week. Since completing the program, that average is now 17 a week. And three months ago, Mr. Adam and his two full-time co-workers started receiving a salary. (Mr. Adam makes about $45,000 a year.)
"Honestly, that's been the biggest milestone so far, with regard to us personally," he said.
"When I got that first paycheck, despite it being pretty small, I remember thinking that I couldn't believe I was being paid to do something I love so much."