Remix: Scott Harrison & charity: water, 5 years later

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1:31Founder Scott Harrison made his first appearance on Masters of Scale in 2018, and since then he's returned to the show several times, even appearing at our inaugural Masters of Scale Summit last October. Scott's original episode with Reid Hoffman remains one of our all-time favorites, and so today we're inviting Scott back to listen to key moments from that episode, reflect on the stories he told, and share new lessons he's learned over the past five years. This is Masters of Scale Remix.

2:12This is Masters of Scale Remix. I'm Bob Safian, and I'm here with Scott Harrison, the founder and CEO of Charity Water, which has an incredible entrepreneurial history. Scott, you first came on to Masters of Scale in 2018. What's different for you and Charity Water now than it was five years ago? 2018 feels like so much longer than five years ago. My gosh, it feels like 50 years ago, Bob. A lot has changed with the organization. So as of right now, we are down to 703 million people living on Earth without access to clean water. That's still an astonishing number of humans drinking dirty water every day.

3:04That's two Americas full of people. But that is lower than five years ago. So we're making some progress. Our impact is now up to over 17 and a half million people with access to clean water across about 137 ,000 communities around the world. That said, you take 17 million, you put it into 700 million, it's about 140th of the work that needs to be done. So I think we are probably more than ever focused on growing our impact. How do we go faster? How do we scale? How do we actually solve this problem in our lifetime? I mean, it is crazy that we are looking for water on a planet 140-some million miles away.

3:50And as we go to space, right, and as we look down, 10 % of the people living on Earth are drinking dirty water every day. So we really want that number to be zero. And I'd like to see this happen in my lifetime. On that first episode of Masters of Scale, you told Reed the story about your life as a club promoter in New York. Every night out drinking until the wee hours, the substances, drugs that helped you get through the next day. And you told the story of the moment when you made the decision to turn your life around. Let's listen. There was this one night, I remember I was out with the new restaurant partner.

4:33And I remember I was fantastically hammered and came out of the bathroom of this private members club and saw a bouncer talking to my new partner. And they had a heated exchange. And my new business partner says, hey, this guy is harassing me. You know, you know the owner. Why don't you do something about it? You got my back or what? And I stumble out onto the street and I dial the owner and say, hey, bad behavior going on here. And she winds up terminating the employee. And the next night, I typically left the party at the club I was working at at 3, and I left at 2.50 a.m. And on my way home, I get a text from my doorman, hey, that guy that you just fired, he just turned up with a gun looking for you.

5:18And I said, well, I'm going to take a couple weeks and get out of town. And I remember renting a cobalt blue Ford Mustang on a one-month rental. I grabbed a Bible. I grabbed a carton of Marlboro Reds. I grabbed a bottle of scotch, and I was just going to head north and take some time to lay low and to think about things. And as it turned out, I never came back. It was at the very end of this journey that all the things I thought would make me happy, I just realized they wouldn't. I actually asked myself this question, what would the opposite of my life look like? And I thought, well, if I'm this selfish, hedonistic, drug-addled nightclub promoter who's done nothing for anyone else, what would it look like to actually help people in need?

6:03And I thought, okay, what if I quit and did one year of humanitarian service to the poor?

6:14So you made this decision to give a year of your life to humanitarian service, which set your life on a path that led to charity water. It was 180 degree change in your life to find more happiness and more meaning. But running a business, even a nonprofit, that's plenty hard. It's stressful. Yeah, it's a slog. Did you realize how hard it was going to be? And how do you manage that stress? It is incredibly difficult. And in some ways, the more size and scale of the organization, the more challenges, the more complexity. We've worked now over 137 ,000 villages across 29 countries. So mass amounts of complexity with inflation and the sourcing of materials, just fundraising.

7:10Fundraising is always hard. I mean, Bob, there's not a day that goes by that we are not asking people to open up their hearts and show compassion for people who are suffering from a problem they have never experienced. I mean, 17 years in, I'm talking to people who have never once tasted dirty water in their life. So it is extraordinarily difficult. But I think what has kept me going, what's kept me energized or animated as we come up on two decades of this work is it's unfinished work. I spend 99 % of my time focused on how do we actually get this done? And that is by raising more money and getting more everyday people to care, to care and to give generously and open up their hearts and say, look, I could embrace the apathy that comes with any of these paralyzing global issues that don't affect people like me.

8:13Or I could do something. I could take an action. And there are still some no's and then someone will say yes. I'd asked somebody a couple of years ago, who I think has actually been a guest on this podcast. And I asked for a very large gift, actually an eight-figure gift, which would transform many, many lives. And after a couple months of consideration, this person came back to me and said, yeah, thank you so much for the proposal. Thanks for the invitation to help so many people. I have only one question. Why did you ask me for so little? And then they gave four times more than what I asked for.

8:56That takes a whole lot of no's out of the picture. It's so energizing because in that moment, one million lives changed. In that yes, in the 4X the ask, I didn't have the guts to go for a million lives. I was going for like 250 ,000 people. But a million lives would be changed. And that gets me up out of bed every day. All right, another clip here. You also told the story of your first trip to the developing world as a photographer. And you mentioned this idea that it's your job to both show and tell in order to communicate the needs of the people that you meet and that you're serving. Let's listen to the exchange you had with Reid.

9:43So tell me a little bit about what the experience was in taking pictures on this very first trip. At that time, Liberia had come out of a 14-year civil war. There was no electricity. There was no water. There was no mail system. And I joined a group of humanitarian doctors, which really eventually then led me to water. It's funny. I think the first time I met you, I opened up a laptop and I made you look at a hundred pictures. Yes. I'm just, I'm a visual learner and I'm a visual communicator. And for me, it was show, don't tell. Now I would say it's show and tell. It's both. There's storytelling and there's showing.

10:18I was given the role of photojournalist. So my job was actually to document every patient pre-op and post-op. And I was with a group of maxillofacial surgeons operating on a huge 522-foot hospital ship. It was harrowing work, coming face-to-face with a raw truth of needless suffering. But seeing how people could be helped was exhilarating for Scott. His storyteller's instinct emerged, and he just had to share his experiences with people back home. What was exciting to me was, first of all, I'd never seen massive facial tumors. I had never seen any of the things that I was experiencing. And I'm taking these pictures, and the cool thing is that I had 15 ,000 people on my club email list.

11:00And open rates were almost 100 % back then. The only thing I knew how to do was to share these images and stories with the people that I've been getting drunk for 10 years. You can imagine what this looks like. You go from getting invited to a party at Prada headquarters in New York City. Three weeks later, you get a picture of a six-pound pink fleshy tumor in your inbox. My headline was, Alfred is suffocating to death on his own face. Click here to read more. And people did. Not everyone wanted to see these startling images in their inboxes. But a surprising number of Scott's old friends were compelled to get involved.

11:34They had never been exposed to these brutal stories in such an unflinchingly honest way. I remember meeting a 65-year-old woman in the bush with a cleft lip. and for her entire life, food and water had spilled out of her mouth because she never had access to a$200 surgery. The picture of her before and the picture of her after being received back into her village like a celebrity, that says so much more than the ability to even just tell that story. So that first year, I took 50 ,000 photos, and I was just blasted. I was assaulting my club email list every few days, every week, with a new story, a new before and after set.

12:17How do you think about the task of showing and telling now in a social media, Instagram, TikTok world? How has your thinking and your approach evolved and how is it evolving? I think we believe even more firmly today in the power of showing and creatively showing and finding different ways to immerse them into this issue. I got to give a lecture at a university. It was about 110 ,000 students. And I got an award after the speech, the commencement from the university saying the most slides ever used in a speech at this university. And I think I showed 188 pictures in 35 minutes. So that hasn't changed.

13:05I think if anything, maybe we're leaning into more visual images. maybe even less to say and more to show as we move into this fragmented attention world. Sounds so cliche to say a picture says a thousand words, but for me to talk about a child I met in Eastern Kenya who was drinking from a muddy river and would drink from this bottle of brown viscous water that she dipped into the river, and then she would kind of vomit a little bit. And then she would drink some more, and then she would throw up a little more. And for me to watch this child poisoning herself in real time in front of me, feeling so helpless, that's one thing.

13:54To show that photo of this little girl with a bottle in her hand and a t-shirt covered in vomit is a very different way to viscerally engage someone in a real problem for that child. We live in a world where kids are throwing up on themselves because they have dirty water and we haven't reached them. We haven't decided to help. So I think we've now made over a thousand videos at Charity Water. We are on all the platforms now trying to reach people with the mediums that they are consuming every single day and reach them with true stories, but also a brand that is aspirational and hopeful, not a brand based on shame and guilt.

14:42Charity Water's commitment to this idea of radical transparency is distinctive, and it all starts with your business model. Tell us about that. Charity Water has this distinct business model. 100 % of public donations go directly to the field to provide people clean water. And then in this separately audited bank account, about 130 families pay the overhead. Well, all of our marketing dollars, all of our growth capital has to come from those 130 families. So that constraint, I think, if we had more money on the OPEX side, we would grow faster. We would grow the movement, but we can't take a penny of those people's money who are showing up every month or who are donating to the water projects for growth.

15:29So I think as powerful as the 100 % model is for so many people, and we continue to hear this 17 years in, time and time again, I am giving to Charity Water because I know all my money is gonna reach the people in need. It also continues to be a business model constraint at scale. On your episode with Reed, you told a story about when it almost all fell apart. Let's take a listen. Talk a little bit about how the mechanics of the first came together, which is, well, we're driven by getting these new donors. We want this transparency and we want 100 % of the money. But in order to do that, we need other sources of money too.

16:07So how did you put that business model together? I can't even tell you how hard that was and how I talk other people away from doing that now. We just opened up two bank accounts. So there was this idea that the public's money would never be touched, go in the water bank account. We called it the water bank account. Then there would be the operations bank account. Sure, Scott could have decided to make an exception in those early days, a one-off compromise, dip into the water account and keep the operations humming. But that was a slippery slope Scott didn't want to slide down, even if that meant folding the charity.

16:40So we get to this point about a year and a half in where we raised a couple million dollars and the game was up. There was a moment when there was$111 in the bank account for overhead. I'm skipping my paycheck. My staff there, I'm like, don't cash your checks. Just wait another week. I'm working on it. I'm going to get another$5 ,000,$10 ,000 to put in. I just realized I can't raise money for the overhead fast enough. Scott prepared to close Charity Water. He'd done everything he could think of. He'd even cold emailed the founders of the three biggest social networks of the time. Mark Zuckerberg.

17:12MySpace founder, Tom Anderson. in, Bebo founder, Michael Birch. So Zuck doesn't write me back. Tom doesn't write me back. Michael Birch actually wrote me back and said, I actually like this idea. I'd like to stop by and see your office. Well, we had actually just moved into a really greasy, crappy office at that point. And he comes in and I remember he's very British. I think he hates me. He doesn't smile for an hour. Very dry. Oh, I don't like charity. I don't get, I don't trust charity. You know, I'm like, well, yes, I know this is, I built this thing for people like you. Scott's commitment to transparency had convinced a charity skeptic like Michael to get involved.

17:49Scott set about bringing the Charity Water story to life. I do my thing on the laptop and I'm clicking through a hundred photos. And here's my vision for a world with clean water for everyone. And here's the business model. But I'm kind of broke. So he says, well, let me think about it. Three days later, I get an email from him saying, hey, it was great meeting you. I wired a million dollars into your overhead account. So we go from insolvent to a year in funding. And you know, in your business, this was a lifeline. And it's funny because at the moment, it was all about the money. It was, I have another 12 months of runway to go and figure this out.

18:23I think now it was the confidence. Someone believed in me. They believed in this crazy business model. You know, that was a third of a billion dollars ago. And had it not been for that one act of radical generosity, that one act of trust, that one person saying, I see something in this entrepreneur, and I'm going to fund it. I'm going to give them a little more rope.

18:46You got a lifeline in those early days by being true to your vision, staying transparent. How has radical transparency continued to be a mindset for Charity Water? What does it do for the organization today? Transparency, probably the thing I'm most excited about. When we started out, the first big idea was, hey, let's just put up all of our completed projects on Google Earth and Google Maps. And let's show people the satellite images of these projects. The thing I'm probably most proud of since then has been the advances that we've made with the sensor technology we developed in-house. And this was just a simple idea, Bob, of wanting to create a smart well.

19:30I was inspired by Nest. If a donor can change the temperature of their Yellowstone Club home from New York, why can't we monitor a well in Ethiopia remotely as well and know if it broke and then be able to send technicians to go and act on that? We created sensors that were viable. We installed thousands and thousands of them across our portfolio. Now we have the largest data set in the history of the world of real-time flow through our sensors for rural water systems. And it is so cool to see a charity water well that is just working, providing thousands of liters every single day, and then it breaks.

20:11And then to see the repair call and to see the technician go out on a motorcycle, work with the community, make that small bit of maintenance. I mean, sometimes it's a$5 part that is the difference between a water project working and it being non-functional. We recently had the government of Ghana take our sensors and put them on government wells. What's exciting about that is Charity Water has never worked in the country of Ghana. We don't have a single well in Ghana. So the fact that this tech that we have worked on could be exported and useful for a president of Ghana, for the water minister to hold the people accountable there to a sustainable system of water always flowing is very, very exciting.

20:58We continue to kind of invest in that level of transparency where we know if a project breaks and we know how long it takes to make that functional again. Scott's commitment to transparency is just one tool in Charity Water's entrepreneurial toolkit. After the break, you'll hear more from his 2018 episode about creativity and fundraising and how nuance can drive engagement, plus more new insights from Scott, including blending analytical ROI with human emotion. We'll be right back. Real leaders don't back down when the stakes are high. They innovate, they push forward, and then they take the stage at the Masters of Scale Summit.

21:45Join us in San Francisco, October 7th to 9th, to hear from the CEO of the New York Times, scientists using cutting-edge technology to find cures, the leader of crypto powerhouse Coinbase, a retired four-star general, and many, many more. Apply now at mastersofscale.com slash apply25. That's mastersofscale.com slash apply25. If you're ready to take your startup from idea to impact, then AWS is your launchpad. From data storage to machine learning to secure app hosting, AWS gives you the tech trusted by the world's fastest scaling startups. And here's the best part. Join AWS Activate today and you could score up to$100 ,000 in AWS credits tailored to your stage and network.

22:34Go to aws.amazon.com slash activate and start building. Expanding your business in the U.S. can feel like a maze. Every state has its own payroll, benefits, and compliance rules, which can pull your focus away from growth. That's why founders use Deal. Deal is the professional employer organization, or PEO, that gives you a dedicated HR expert plus Fortune 500 level benefits for your team. The National Association of PEOs says businesses can grow twice as fast if they use one. So if you're scaling, make it simple with Deal. Go to deel.com slash MOS and get up to three months free. We're back with Scott Harrison, founder and CEO of Charity Water.

23:24Scott, on your Masters of Skill episode, you told the story of one of your most successful fundraising initiatives at the time, where people donated their birthdays to provide clean water. Let's listen.

23:40I launched Charity Water in a nightclub on my birthday. It was my 31st birthday, and the only idea I had to officially launch was to get a bunch of people in a club, give him open bar and ask him for 20 bucks on the way in as a donation. And we raised$15 ,000. Scott had taken the one day of the year when people are encouraged to be selfish, to sit back and be showered with gifts and well wishes. And he had flipped it 180 degrees. It was simple. It was invitational. It was something everyone could do. And it tapped into the fact that people built their strongest relations with other people, not brands or ideas.

24:19People started happily giving up their birthdays to support Charity Water. And then this idea just exploded where 16-year-olds start giving up their birthdays. 89-year-olds start giving up their birthdays. I remember this woman, Nona Ween, writes in her mission statement, she says, I'm turning 89, and I'd like to make that possible for more people. And we realized this is a rich idea. Our birthdays can help people have more birthdays, can help children reach the age of five and not die from waterborne disease. Nona was, because of the privilege that she was born into, had lived twice as long as the average in some of these countries where we were working.

24:54So you had this beautiful message that was fighting the materialism of the age. More and more stories were being generated, prompting more people to donate their birthdays to the cause and bring their networks into the celebration. We then also had this really nuanced message was, wow, I can give out of the blessing. I have been blessed with health care. I've been blessed with clean water. If my birthday can help other people, then I want to turn it into this redemptive, generous movement. This spreads. Then people start fundraising campaigns. They say, well, I can't wait till my birthday, but I have this other idea.

25:27Let me go climb a mountain. Let me go walk across America. Let me sail across the Atlantic. We had a guy listen to Nickelback for an entire week with headphones on. Raised$30 ,000.

25:40That man deserved every single dollar, and then some. We salute you for your sacrifices. The Birthday Initiative went on to become one of Charity Water's signature methods of fundraising. Donating birthdays works great and I guess still works well for Charity Water. But what new things can you try? How do you keep the energy going? Do you have to keep coming up with the next idea? You do have to keep coming up with the next idea. Birthdays is a great example. It became very quickly commoditized. I remember when Heifer.org, who was known for selling goats and sheep to people in a Christmas catalog, asked me to donate my birthday.

26:23I was like, that was my idea. And when Charity Water started doing that, there was no GoFundMe. There was no Facebook causes. There were not the crowdfunding platforms that are ubiquitous today. So yes, it's a constant challenge to reinvent, to reimagine, to come up with new campaigns, new ideas, new strategies, new ways to connect with your existing donors who could get bored, if I'm honest, and ways to engage completely new people. One of the things we're working on right now, we're building a 7 ,000 square foot retail experience where we're going to bring people in who may have never contemplated the global water crisis before.