WBD412 Audio Transcription
Turning Bitcoin into Clean Water with Scott Harrison
Interview date: Wednesday 20th October
Note: the following is a transcription of my interview with Scott Harrison. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.
In this interview, I talk to the Founder and CEO of Charity: Water, Scott Harrison. We discuss his journey from nightclub promoter to founding the charity, their goal to bring clean water to every person living without it, and the role Bitcoin plays in this.
“People would say ‘okay I’m never giving you bitcoin if you’re going to turn it into this cash trash, but if you’re willing to hold it, I’d give it to you now...’ we said we’re going to call it the Bitcoin Water Trust... and we’re going to hold it all until at least 2025.”
— Scott Harrison
Interview Transcription
Peter McCormack: Scott, finally we do this, man!
Scott Harrison: Good to see you, man!
Peter McCormack: Good to see you, man.
Scott Harrison: I can't believe I missed you when you were in town.
Peter McCormack: Dude, do you know what, I really like Nashville.
Scott Harrison: It's a cool place, isn't it? Great food, great music, great people. People are nice here, right, they're nice in the south?
Peter McCormack: Dude, honestly, I'm a big fan of Austin. Look, got my Texas Forever hat on, and I always thought if I moved to the US, I would move to Austin. Nashville has thrown a spanner in the works for me.
Scott Harrison: Okay, well it's a lot cheaper, maybe not for long. Well, I was in New York City for 26 years, so I could never imagine living anywhere else except Manhattan, raising my kids in Manhattan, fighting it out in the two-bedroom apartment. And, in this post-COVID world, somebody said the other day, "You're doing the COVID shuffle", because we moved out of the city to a farm, and we had a really great rural experience; and now, we've moved to the south, because it's affordable and we wanted to try something new. And, boy, I'm missing New York City a lot less than I could have ever imagined.
Peter McCormack: It's funny you should say that. So, I went to New York before Nashville, and I'm a big, big fan of New York. And, it was much better than I expected. I really liked it, I had a good time, had some good meals, saw some friends, but it didn't have the same buzz that I felt it normally had. And, there were a couple of things I noticed. There was a definite huge increase in homeless and there was open drug-dealing around Times Square, which I was kind of surprised by; not like I'm anti -- we're probably going to talk about drugs today, because it could be a topic that comes up, but I had a big drug problem. I don't care if people take drugs.
Scott Harrison: I do too, yeah.
Peter McCormack: I thought that was an interesting signal on the city, and there were just a lot of boarded-up places. But I still enjoyed myself and I wasn't --
Scott Harrison: And the neighbourhood matters. Midtown, I've heard, is just -- I'll be there next week for some meetings, and Midtown has definitely changed. But I always lived in Tribeca and Soho, and there's still a lot of energy there. Although, I will say my last trip to New York, I was with my wife, walking down West Broadway, we were staying at the Soho Grand. At it's 5.00pm at night, it's not dark, and we just see somebody graffitiing on West Broadway. I haven't seen this in ten years.
Peter McCormack: And no police, dude.
Scott Harrison: Just the boldness. And my wife was like, "Shall we say something?" It was kind of a group of three or four people, and we just watched them deface storefronts on West Broadway in daylight.
Peter McCormack: Yeah, but was it good graffiti? Because, if it was good graffiti, I would be cool with that!
Scott Harrison: I don't know whether I'm a good judge of graffiti art!
Peter McCormack: Well, listen, from there, I went to Nashville, not with huge expectations, but wanted to see it. A few people had said, "Look, you've got to check out Nashville". I went out that first night and I immediately fell in love with it. I was like, "This place is cool, the people are nice". I went for chicken. Dude, I had the hottest chicken I've ever had. I went to Hattie B's.
Scott Harrison: Okay, yeah, I've heard of that, I haven't been yet.
Peter McCormack: Holy shit, yeah. I had a bad day the next day. And then I went to a Whiskey Jam which was at Losers, and that was cool.
Scott Harrison: Did you got to the little speakeasy, I forget what that one's called. It's kind of a speakeasy, you can make reservations and have refined cocktails prepared for you by guys in tuxedos. That's a cool place. You stayed at the Virgin?
Peter McCormack: Yeah, the Virgin. That's a great hotel.
Scott Harrison: Yeah, awesome, right. Kind of brand new, a year old, I think. A lot of creativity there. Yeah, it's cool.
Peter McCormack: I just got a great feel for it and I was like, "I just want to come back". I really liked it. It's like there and Austin are, without doubt, my two favourite places.
Scott Harrison: Well, while you were here, I had a breakthrough COVID case, so I couldn't see you and obviously didn't want to see you, you didn't want to see me, and we're all healthy now. That was a couple of weeks ago. We were talking about it earlier. I feel very fortunate. I had flu symptoms for a day, my wife had a couple of days and our kids were fine; they tested negative all the way through.
So, today is their first day back in school after three weeks, and oh, my gosh, I mean we have a 5- and a 7-year-old. We barely survived. I mean, boy! Kids are waking up, I'm trying to work, kids up for 14, 16 hours a day. God bless the teachers.
Peter McCormack: It's funny you say that. I interviewed Aarika Rhodes yesterday. She's the teacher here in LA who is a bit of a bitcoiner and she's running for Congress against Brad Sherman. I said the same to her, because there was a two-month period where I had both kids home from school on the lockdown and I was trying to teach them. I was like, I have so much more respect for teachers now than I ever did. The fact that you do this day in, day out with 30 kids; not one. I had one and I wanted to, well, probably shouldn't say what I wanted to do, but I wanted to strangle her!
Scott Harrison: Every parent knows!
Peter McCormack: I was like, "Will you listen to me!" But I was like, you and the nurses are the most undervalued people in society. You, the nurses, the police, all the people that we don't realise we need until we really need them. But look, good to see you better. I will be back, I'm going to be back in April. I bumped into some people involved with the Country Music Television Awards, and I convinced them to let me and my daughter go. So, me and my daughter are going to be coming to Nashville in April, so hopefully we'll hang out then and do some wholesome family stuff.
Scott Harrison: Okay, for sure.
Peter McCormack: But dude, this interview's long overdue. We bumped into each other at Pomp's studio.
Scott Harrison: Yeah. We tried sharing the trade secrets. That was fun to eavesdrop!
Peter McCormack: Yeah, it's funny. One of the things me and Pomp do, whenever we see each other, we tell each other everything we're doing that's working. I mean, because he's the number two Bitcoin podcast. I always want to help him!
Scott Harrison: You're funny! But that's probably not a perception that a lot of people have out there.
Peter McCormack: Probably think we're competitors.
Scott Harrison: Yeah. I think it was very cool. So, for everybody listening that wasn't there, these guys were friends, and they were sharing, "Here's what's working", platform tips and, "This didn't work". It was very healthy to see. I think we need more kindness and collaboration in general.
Peter McCormack: Well, Pomp's always been like that from the start. Ever since I met him, he's always been like, "I want you to win, Pete, what can I do to help you?" It's infectious.
Scott Harrison: Yeah. I cold-emailed him about the thing that we're probably going to talk about, and he just said, "Hey, I'm in. How can I help?" which is great. That has not been my response, or the response from everybody! But he's a really sweet guy.
Peter McCormack: Pomp's like that. Yeah, if I text him now and I told him I need something, he'd be on the phone within an hour saying, "How can I help you?" He's a really good guy like that and he's always helped me. So, we share what's working. We tell each other what's working, we help each other, and I think what people don't realise is we want each to win; because, if he wins, I win, vice versa. I just want to win more than him! Love that guy though.
Right, dude, important subject. You presented at the Bitcoin Conference as well?
Scott Harrison: Yeah, it was an interesting speaking slot. It was in between Jack Dorsey and Floyd Mayweather, which tells you a lot about that conference, right?
Peter McCormack: Tough gig. It was such a strange event. I mean, I was MCing, so I got to introduce you up, but strange event. But it was a good opportunity for you, man, just to get up there and tell people about what you're doing. Right, let's explain it, but then let's do the back story, so people know.
Scott Harrison: Okay, so I lead an organisation called Charity: water. I've been at it for 15 years. Very simple mission. We think everybody on earth should have access to clean water. So, we think everybody alive should be drinking clean water every day. Unfortunately, 771 million people, or 10% of the planet, drinks dirty water every day. So, that's been a pretty simple idea. I wasn't very creative naming the thing, Charity: water; a charity that helps people get water.
Over the last 15 years, we've focused on really building a concerned movement of everyday givers, so we haven't been going after governments or foundations or really the corporations, it's been everyday people. We've raised about $600 million to help 13 million people around the world to get clean water. Now, that's 1/56th of the problem, it's about 1.8% of the way there. But we've grown the organisation. We'll raise over $100 million this year, so a lot of people are giving from 150 countries around the world.
We have a unique business model, which I think resonated with some of the people at the conference, where from day one, we have split out the overheads from the water projects. So, we've operated with two distinctly audited bank accounts for a decade and a half, where a small group of about 120 people pay all the nasty overhead: staff salaries, flights, office, Epson toner, right. And then, millions of givers know that if they give $1 or $1 million, £1, €1, 1 Bitcoin, which we'll talk about, 100% of that goes directly to build water projects which help people get clean water, and then we prove them.
We've located every single completed project now, over 70,000, on Google Earth, on Google Maps, so people can see where the money's going. So, that's been one of the distinctives of the org. It's difficult. You can have too much money in the water project bank account and not enough for payroll, well, you never really raise for overhead, but that's just worked for us, having this kind of church and state between that, because so many people are sceptical of charities.
Then, we got into the Bitcoin space in 2014 and I'd gotten to meet Wences Casares and Pete Briger from Fortress, who are friends. Pete had hosted a dinner for me at his home and was explaining Bitcoin and said, "Charity: water, you guys are early adopters". We were one of the first in the virtual reality space, we were the first charity to get 1 million Twitter followers, first charity to use Instagram. He said, "You need to be early and make sure you've got a way to accept Bitcoin".
So we did, in 2014, and we started accepting Bitcoin and I'll never forget, our first Bitcoin donor was Tony Hawk. He'd come to an event and he'd raised his hand and he pledged $1,500 and he paid it with 5 Bitcoin. So we're like, "Great, we've sold the Bitcoin", we were so proud of ourselves that we knew how to sell Bitcoin, and we sold them for $312 each.
Peter McCormack: Aargh!
Scott Harrison: And we sent Tony's $1,500 to the field to help 30 people or 40 people get access to clean water. We were very proud of ourselves, because we were accepting Bitcoin in 2014 and we were turning it into clean water for people in need. And, Peter, let me just say, this is a best practice, because if you gave me Apple stock today, like who's Charity: water to have an opinion on whether Apple stock goes up or down? If you gave me Tesla stock, it could be at a high, it could be at a low. The donor is giving us an asset to turn into impact immediately.
So, over that period of time, previous to the Bitcoin Conference, we took in 569 Bitcoin. It's a lot.
Peter McCormack: Yeah, a lot.
Scott Harrison: We sold them for $4 million, a little over $4 million, so not nothing, not at $312 a coin. And that was enough, that $4 million was enough, to get about 100,000 people clean water, so already kind of a Bitcoin for tangible good, real-life story over that period of time. As people would give, the money would go out, build water projects. 100,000 people; that's five Staples Centers full of people; it's five Madison Square Gardens full of people, so it's a big impact.
However, had we held, you're looking at an 8X impact. Call it $30-some million, $35 million. And, the more we talked to people in the space, the more we encouraged them, as Bitcoin's price appreciated, to give. They were like, "Why would I give you Bitcoin now? It's going to be worth so much more in the future and you're just going to sell it. It's the last asset that I would want to give you to fund water projects", so that kind of led to the idea of, well, what if we did take an opinion?
Could a charity set up a trust that instead of selling the asset, promised to hold the asset for a period of time, and then if we set that structure up, would the donor allow the asset to appreciate with the charity? Would that be a strategy where people would say, "Okay, I'm never giving you Bitcoin if you're just going to turn it into this cash trash. But if you're willing to hold it, I'd give it to you now and let it appreciate with you".
So, that was really the pretty simple idea, and we said, "We're going to call it The Bitcoin Water Trust, again not super creative, and we're going to hold it all until at least 2025. So, we're going to get through the next halving, one full cycle, and then in 2025, we'll be at least unrestricted in our ability to use that Bitcoin to help people get access to clean water, and 100% of the Bitcoin would go directly to build water projects in 2025 and beyond, that we believe the Bitcoin would have a lot more impact in the future than if we just sold it today.
Peter McCormack: Okay, there's a lot to unpack here, where do I start? Let's start with the water projects themselves. How many people did you say live without clean water?
Scott Harrison: 771 million people, and 82% of them, Peter, live in rural areas, and about 18% live in cities and towns.
Peter McCormack: Okay, and primarily which countries are we talking about here?
Scott Harrison: All over. You've got sub-Saharan Africa, you've got India, you've got Southeast Asia, and a little bit in Central and South America, although that problem has been solved faster than in other places.
Peter McCormack: And the consequences of dirty water are disease, death?
Scott Harrison: Yeah. I remember when I started, two stats I remembered. The World Health Organisation said, "Half of the disease in the world is related to unsafe water, a lack of sanitation and hygiene", so toilets, handwashing and then clean water. Half of the hospital beds are occupied because of water sanitation hygiene-related issues. The other thing that I remember was 40 billion hours were wasted just by women in Africa collecting water.
So, you've got health impacts, you've got time, wasted time and the impact on the economy, and then another powerful stat: one out of three schools in the world not only don't have clean water, they also don't have toilets. So, imagine sending your 12-year-old to school without access to clean and safe water, or a toilet? So, water has all of these negative impacts if you don't have it. And again, it's something it's so easy to take for granted. You woke up this morning, you brushed your teeth, you used clean water, some people use bottled water for their coffee, took a long shower, and that's just not a resource that 771 million people even know what that's like.
Peter McCormack: And in terms of the unclean water, is it a mix of just dirty water from dirty sources, or is manmade pollution a big issue as well?
Scott Harrison: In the rural areas, most people would be using an open source. That might be a swamp, that might be a river, that might be a stream. And open water is contaminated, and in many of these rural areas, people would be sharing that water with animals. So, a typical watering hole in a rural part of Ethiopia, you might have the women and the girls coming, and then also the cows coming. So, you don't want anybody drinking from an open -- you wouldn't go in your back yard and drink from the pond there, no matter how beautiful that pond even would look.
So, that's kind of the problem. And then, we've taken a solution agnostic approach. There are a lot of different things that work to solve the problem in a lot of different environments. So, there is no one-size-fits-all water solution, there's no silver bullet to this, but you can drill wells, you can purify water. We do something called biosand filters throughout Asia. You can harvest the rain in some communities. You can move water using gravity; clean water from one place to another, lots and lots of different technologies.
When it comes to our work, it only costs about $40 to get a person clean water, so it's actually not that expensive.
Peter McCormack: Is that over a time period though; is that an annual cost? Because, I'm assuming there's a cost of building infrastructure, but there's maintenance cost as well.
Scott Harrison: That's a great question. So, we want a project to last a decade. So, success is a Peter well there ten years later, still helping people get access to clean water, or has been replaced by a higher quality solution. Because if you think about this, let's just use a well in a village maybe for 250 people. This is the bottom rung of water development. I mean, we've got running piped water into our homes, into our showers, into our toilets. So, sometimes we'll see progress where somebody will go one step higher on the ladder, which is great, and improve water access and water quantity.
So, yeah, it's a solvable problem and there has not been this kind of will or the resources allocated to make quite enough progress. I mean, it's kind of shocking that in all of the abundance of the world, everybody's fighting to go to space and colonise Mars, and 10% of the world is drinking disgusting water. You could argue the most basic need for life to be healthy, to thrive.
So, that's what we've been working on for 15 years and we've got a lot of people to care about this, but we still have so much more work to do ahead.
Peter McCormack: So, I'm slightly aware of the issue, in that I recently went to Guatemala and went to Lake Atitlán and spent some time with people understanding the issues with Lake Atitlán being the provider of water to the communities that live around the lake, but at the same time it's being used to dump all the sewage into the same water, and they have issues with people getting sick around Lake Atitlán. So, that was my first time I was made aware of the issue. Have you been out there to Lake Atitlán, are you aware of what's going on there?
Scott Harrison: I haven't been there. I know that that's a big -- and we talked about it a little bit. My head of water programmes, when I told him that you'd just gotten back, he was like, "Yeah, that's a serious situation there". What you saw, you would have heard about a lot of diarrhoea, dysentery, and one of the terrible things about diarrhoea is it is one of the leading causes of death among young children.
Peter McCormack: This is unbelievable, right?
Scott Harrison: It really is. You and I drink from a lake, our immune systems at this point are mature enough. We're going to be sick. I mean, it's gross, we're going to have stomach pains, we're going to have diarrhoea, but we're probably not going to die. And it's not uncommon that a woman I talk to will have stomach issues nine or ten months out of the year, that are often debilitating in pain. But if you're a fragile child, if you're a 3-year-old, or a 4-year-old, what happens is you actually die of dehydration.
You think about it. I have a 5- and a 7-year-old. My kids get sick, and let's say they have a really bad stomach flu or diarrhoea, we go to the Duane Reade or the Walgreens and we buy that blue stuff, like the Pedialyte, which is meant to rehydrate them and put the minerals back in their body. I was just in Vegas last week speaking at a conference, and a lot of people there will get the IV drips. They'll go out hard and in the morning, some doctor comes with the bag and puts fluids and electrolytes back in their body.
If you're a mum taking care of a young child and the only available source is a contaminated source that caused the sickness in the first place, you've got this cycle of death. So, as you're trying to rehydrate your child, you're giving them the same poisoned water, and they die of dehydration, and it's shocking, it's terrible. I've been with women who have lost five, six, seven children under the age of 5. Not everybody knows that it's the water. Sometimes there is an awareness that this water, that is their only option, is the problem.
But there's a human toll, there's so much human suffering, which you would have experienced, again when you just don't have this most basic need in your life met.
Peter McCormack: What is the total cost to fix this, because you said at 1/56th, I can't remember the number you said?
Scott Harrison: Well, you have a reverse economy of scale. So, it gets more expensive the more of the problem you solve, because you've got a capital cost, for whatever that water solution is, divided by population. So, as you knock out the most populated villages or areas, same capital costs, but far fewer people using it.
The honest answer is no one -- I mean, it's a lot. No one has agreed upon that number because, Peter, the capacity isn't there. So, maybe a way to say this is, even if you had $10 billion right now that you tried to invest in rural water supply, there wouldn't be enough drilling rigs out there, there wouldn't be enough capacity to absorb that $10 billion today and just instantly solve the problem.
Maybe look at this as, there's probably a number of phones that Apple could sell greater than they could produce at any time. So, they're out there making sure they have all the minerals they need and the resources and the factories have capacity and they're opening up new factories to make new phones. You've got the sales and then the service delivery that need to go in balance.
So, that's the same thing, but it's a complex problem to solve. And we've gotten in the business, over the last few years, of actually buying these million-dollar drilling rigs and shipping them to Africa so that we can get more capacity as we continue to raise more money.
Peter McCormack: Wow, okay. Massive.
Scott Harrison: I think sometimes it helps through a story. I mean, this is a tough story, but I've been to Ethiopia 31 times now, and it's a place that I'm really familiar with. I've been to 70 countries now in my travels, but a love for Ethiopia specifically and we've helped about 2 million people get water there. It's a dry, arid region up in the north. Women actually walk eight hours a day; four hours out, four hours back, or three hours out with their empty pod and five hours back with their 40 pounds of water.
I lived in a village once, Peter, where about 3,800 people were living, and there was a 13-year-old girl who had lived in that village and like the other women and girls, she would walk every day for water. One day, at the end of her eight-hour walk, before reaching home with her water, she slips and she falls and she spills her water. So, she undoes a day of work and she hung herself. She took the rope that she was using to tie the clay pot on her shoulders and she tied a noose around her neck and she climbed a tree and she jumped.
The village elders found a broken pot and a girl hanging from a tree who didn't want to go back for water, who the despair was just so great. I lived in that village for a year. Sorry, I went to that village a year after hearing that story just to see if it was true, and I ended up spending a week there talking with her family and visiting her grave, and understanding what true water poverty really looks like. And her best friend said -- I was like, "Why do you think she really took her life?" and her best friend said, "Shame. She would have let her family down, because she was not bringing any water home that night and she also broke the clay pot, which was a valuable asset".
I think that just, oh my gosh, right? A teenager in such despair that she would take her own life out of shame, because she slipped and fell. My kids knock stuff over five times a day. I have the clumsiest children, and there's so much grace for that, right. So again, I mean there are so many stories when you do this for 15 years, you're in such extreme environments. But that, to me, is just indicative of why; that drives me.
Peter McCormack: How is the agriculture in Ethiopia and what are they doing for food and survival, because a lot of agriculture requires water to grow your plants, to grow your crops; so, how does that work?
Scott Harrison: It depends on the rains, Peter, it just depends on the rains. There are good years and bad years. This is a particularly bad year. If the rains come late, if the rains don't come in the same way, there are no agriculture systems in these rural areas, as you might imagine. Sometimes, some type of irrigation, sometimes digging of ditches or ponds; that's actually one of the things that our partners do a lot, is making sure that the ground water is replenished during those rainy seasons.
So, in many villages, they'll build a well, then they'll actually build trenches on the perimeter outside so that when it rains, that water is recharging. Often, they'll terrace, so that means putting up stone walls on the hills nearby so that during that rainy season, the water doesn't just rush all the way down, but it's been stopped and replenishing that ground water.
Peter McCormack: Yeah, I mean Ethiopia's one of those countries I've been aware of for a long time.
Scott Harrison: If you haven't been, it's an extraordinary place.
Peter McCormack: No, I'd love to go. When are you going next? I'll just go with you.
Scott Harrison: You know, there's a really terrible civil conflict going on there right now.
Peter McCormack: Is that up in the north?
Scott Harrison: Yeah, in the north, yeah. Ethiopia has been kind of this bastion of security for so long in the Horn of Africa, and now it's in a lot of turmoil. Our team just got back a couple of weeks ago. I'll go next year for sure.
Peter McCormack: You let me know when you're going.
Scott Harrison: I will. I mean, it's the birthplace of coffee; that's where they discovered coffee, in the Kaffa region of Ethiopia. It's one of two countries that's never been colonised in Africa, one of only two. Liberia, you could even argue, when America sent our freight slaves in 1822 to Liberia and then named everything after US Presidents, was sort of a colonial idea; but Ethiopia has this pride, this dignity. They fought Mussolini and sent him packing. Every time sometime has tried to come in and occupy Ethiopia, they've thrown off the oppressor. It's an amazing, amazing place and amazing people, and then a huge amount of need there as well.
Peter McCormack: Yeah. Well, I mean I was aware again a few years back when there was the photographer, Kevin Carter, who took that devastating photo of a girl who was bent over, crippled by famine, and he ended up taking his life.
Scott Harrison: Yeah. There was a crow, right?
Peter McCormack: Yeah, in the background. And, it really stuck with me. And, I was meant to be out in Africa last year, I was meant to go out with my guy. We were going to go to four countries and one of them was Ethiopia, so I will go with you. Just a side question on Ethiopia though: I'm sure I read that due to climate change, there's a particular risk to Ethiopia coffee crops; is that true?
Scott Harrison: It probably is, just from my travels over 15 years there. We have definitely heard how things aren't like what they used to be and rivers drying up and floods and much more irregular weather patterns. I'm sure that would also affect coffee growing as well.
Peter McCormack: So, how do you pick your projects, because that must be tough choice?
Scott Harrison: Yeah. So first of all, we've got an amazing team that does that full time. There's about 22 people who wake up every single day saying, "How do we spend Charity: water's money; how do we spend Charity: water's Bitcoin to get the most amount of impact in a sustainable way?"
So, first pass, we know where the people are without clean water. So, you know where you can map the 771 million people. Our first pass is to eliminate conflict zones. So, that would take out Yemen, that would take out South Sudan, that would take out active war zones where we don't believe our projects could be sustainable; not that there's not a need there, but that's just not our proficiency. Then, we would eliminate hostile governments. So, a government that says, "We don't want any help, any aid, any outside interference", we're not going to sneak into a country against the wishes of a government.
Now, I would say most people are not hostile when it comes to water, because unless you're a despotic leader and a despotic government, it's kind of embarrassing, Peter, if your country doesn't have the most basic need for its citizens. So, we've actually found very little resistance when we work around the world on water. So, that's the second pass.
Then, the third is really the lowest-income countries. So, you might have a Peru with some population that still doesn't have clean water, but much more of a middle-income country than Malawi and Ethiopia and Uganda and Cambodia, or rural parts of India. So, then we start at the bottom of that United Nations Development Index and say we think we can help the most amount of people here.
Then, we need to find a local partner. So, Charity: water only works with local organisations in each of these countries. So, we just believe for our work to be sustainable, culturally appropriate, it's got to involve local job creation, local hydrogeologists, local accountants, local drivers, and then our role is really to come in with the money and support them and help them grow their organisations, help them get the support trucks and tools they need, help them hire more hydrogeologists and have the funds for that hiring and training.
So, we come in really in support. Okay, Peter, you can implement $1 million of water projects this year, but you really have a need to $100 million and a vision of growing your organisation 5X or 10X; how can we come and serve you to get you from the ability to do $1 million in water projects to $5 million or $10 million? And, we've created thousands of jobs locally through that so that the team in New York and distributed is only about 90 people that will raise over $100 million this year, so it's a lean team at the core. But then the actual work across 21 active countries is being done by heroes really, Peter.
I mean, sorry to belabour Ethiopia, but I've been out with the drilling teams there. There's eight drilling teams, at least before the conflict, that were all active, and there's about an eight-month dry season when you can drill wells and then four-month rainy season. The drillers there work 29 out of 30 days a month. Forget about work/life balance, or Netflix and chill; they make the most of that eight-month period of time and they maximise, and then they see their families for four months when they can't drill.
So, you have these unbelievably committed teams who are waking up at dawn, drilling until night, because they realise the urgency of clean water, the urgency of maximising this resource; in this case, $1 million rig in compressors and trucks, to help as many people, to save as many lives as possible. Through the pandemic, they were out there drilling with masks on. So, they were drilling wells with masks on, socially distancing, building handwashing stations. It was amazing to see the work continue as many of our local partners went to the government and filed petitions for Essential Worker status and said, "Water in a pandemic, handwashing and hygiene in a pandemic, essential. Let us continue to go out there and do our work", and they did.
Peter McCormack: So, when you're drilling for these wells, are there ways to identify where the water is? This is something I don't know anything about. Or, is it like oil drilling; you're hoping and maybe there is? And, do these wells constantly fill? I mean, I don't understand how water contains itself in a well underground.
Scott Harrison: Sure, I'm so glad you're interested in this. It runs the gamut of high-tech, almost electrocardiograph machines, where you're shocking the earth and it's giving you a readout of fissures and aquifers and where you might find the water; to a bunch of guys standing on a hill saying, "If there's eucalyptus trees growing in a bunch like that, there's water there".
In the Central African Republic, I've been with a guy who divines and he's right more than 95% of the time, and I did it, the sticks.
Peter McCormack: The sticks?
Scott Harrison: Yeah. And I did it and it was the craziest thing. I did it on my own. Absolutely nothing happened. He held my hand and one end of it and it was one of the craziest experiences I've had, and that's how he finds the water and he's right. And I'm not going to comment on -- I don't really know how that works, but it's worked for that guy, the head driller in the Central African Republic. So, yeah, there's a lot of different ways to find water.
To drill a well, you're typically going down about 200 feet. So, think of a 20-storey building. So, you're getting in at ground level and you're pressing -20, it's a skyscraper inverted, and that's where there's an aquifer, often. Sometimes 150 feet, sometimes a little deeper, 220. It's a lot of water typically. When you hit an aquifer, it's not ground water, so it's not as vulnerable to rains or droughts, if you were just going to dig 20 feet down, it's water that's trapped in rock. For the purposes of drinking water, it's very rare that those wells would go dry. There's typically far more water than is needed just for the consumption of drinking.
Now agriculture, very different. If you start putting in sophisticated pumps, you could draw that water and dry up an aquifer very quickly. But what we're typically doing is putting on a handpump, which is the most sustainable solution. It doesn't require energy, it doesn't require solar panels or anything like that. You pump the well and it takes about one minute to pump out five gallons. So, about 40 pounds' worth of water. So, you can have a bunch of people line up and pump for about a minute, a minute and ten seconds, and walk with five gallons of water, which is typically what a person would use all day.
Peter McCormack: And, do those wells refill with rainwater?
Scott Harrison: They do. Well, again, it's not as much the rainwater as this water that's trapped. So, certainly the environment affects it. You can also hand-dig wells. So, some of our earliest wells -- and that takes about three months, because the locals are just digging a big, round hole. Sometimes they hit rock, you've got to blast the rock, or sometimes they'll blow them up with little sticks of dynamite and then you've got to bring all the rock up. And then you've got some water coming in at your feet, maybe 20 feet deep.
Then you've got to keep going deeper, so you've got to pump that water out so that you go deeper, and now maybe the water's up to your knees or to your waist. And then, you've got a hand-dug well. So, a little less expensive, because you don't need that big rig and the machinery, but a lot more vulnerable to drought, because the water table could drop ten feet, and now that well is dry.
So, we've really transitioned our earliest work, which were these much cheaper hand-dug wells, to now trying to go down 150 to 250 feet.
Peter McCormack: How did you end up this becoming your life's work? Okay, my life's work is Bitcoin, right, through a weird set of events; I ended up doing a Bitcoin podcast, totally not something I thought about as a kid, and a very troubled life before it for different reasons. But you're here and your life's work now clearly is, until you leave the face of this earth, this is obviously what you're going to do and you're not going to work on anything else, I assume.
So, how did this end up becoming that, because I don't know, but I'm going to assume you didn't leave college and go, "Great, I'm going to start a Charity: water project"; I assume you went to the city and went corporate?
Scott Harrison: No, not at all. I mean, I was born in a middle-class family in Philadelphia. When I was 4, there was a carbon monoxide gas leak in our house and my mum almost died.
Peter McCormack: Oh, shit.
Scott Harrison: We'd just moved into a new house, it was winter. Dad and I were just sleeping in the house and mum was 24/7 unpacking boxes and breathing in total exposure to carbon monoxide. So, she passes out New Year's Day 1980 on the bedroom floor. She was the canary in the coalmine. This led to the discovery of the gas leak and massive amounts of carbon monoxide in her bloodstream, and she just never recovered, Peter. So, she became disabled for the rest of her life.
Peter McCormack: Oh, man.
Scott Harrison: What happened was her immune system irreparably shut down, and its ability to fight off anything chemical, like car fumes or soap or perfume, anything, was just eliminated. So, I was put into a child's -- well, as a child, I was in a care-giver role. So, I was helping my dad take care of the house and do the cooking and do the cleaning and we would take mum from doctor to doctor and nobody could help. They just said, "Avoid exposure to anything that could possibly make you sick", which was everything.
So, for a period of years, Peter, she actually lived in a tile bathroom that was covered in tinfoil, aluminium foil. She slept on an army cotton cot that was washed in baking soda 20 times. If she wanted to read a book, my dad or I would have to bake the book in the oven to try to get that smell of new print out, so outgas, and then I would take the slightly charred book up to her bathroom, and she would receive the book with gloves on and a charcoal mask, and then she would put the book inside a cellophane bag for extra protection and then she would read. So, just to give you a little picture of the weirdness of childhood!
My parents brought me up in the church, non-denominational Christians. So, I think they surprised a lot of people by not suing the gas company who had installed this faulty heater. They didn't want to become bitter. They were people that were praying for a miracle the whole life, and I was the good Christian kid who didn't smoke, didn't drink, didn't sleep around, didn't swear, and I played piano on Sunday in Church, and I took care of my mum and I wanted to be a doctor so that I could help sick people like my mum.
18, I moved to New York City and I went completely nuts; I went the opposite direction very quickly. I woke up one day, "Now it's my turn, down with the rules, I want to smoke, I want to drink, I want to try drugs, I want to sleep around, no one's going to tell me not to swear", and I wound up stumbling into this bizarre occupation as a night club promoter. And, I realised, "Boy, if you're interested in rebelling, you could do this in style in New York City!" If you can fill up the right clubs with the most beautiful people, you could make a lot of money drinking for free, effectively drinking and partying in public!
So, I just fell in love with the opposite of my maybe sheltered, religious life.
Peter McCormack: You went wild!
Scott Harrison: I worked at 40 different clubs over the next ten years, and this is at the high end. This is $25 cocktails, $1,000 bottles of Champagne. Ironically, I used to sell Voss water for $10 a bottle! And this would be Jay-Z at table one, Puff Daddy at table three, and then all the nightclub promoters with the models sitting at table two thinking we were fabulous, while we were spraying Champagne, the DJs playing the same songs the same night.
So, I did this for ten years, and just vice after vice, just started to get darker, spiritually bankrupt, emotionally bankrupt, morally bankrupt, just turning into this decadent, selfish hedonist. But then I bought a BMW, or then I bought a Rolex, or I dated a girl on the cover of a magazine. I would keep trying to collect these markers of success and significance.
I reached a point at 28 years old where I realised I would never have enough; there would literally never be enough.
Peter McCormack: Yeah, it's a myth, right.
Scott Harrison: Someone would always have more. And this absolute selfish, hedonistic pursuit had left me hating myself, hating others. This kind of joyless, angry shell of the way I grew up. And I realised, just to put it maybe bluntly, if I died, and I probably would die young, because we were doing lots of drugs and we were seeing people OD, my tombstone, the best it could read would be, "Here lies a man who got a million people drunk". That would be my legacy. Thanks for that contribution to the world, Scott; you managed to get a million people drunk! Yeah, some of them worse, some of them laid, whatever.
I realised this, I was in South America in Punta del Este on this decadent vacation, and I just realised I need to make a big change. And I don't need to make a pivot or a small course correction, I need to make a radical change; I need to basically do the opposite. And, it was a little bit of the Prodigal Son parable, where I had walked away from everything I believed and I found myself years later in this proverbial pigpen, basically eating crap and missing home, missing that spirituality, morality and value system, the faithfulness, the integrity of my parents, the loyalty, the love that they'd shown.
So, I sold everything I owned and I said, "I'm going to start life over at 28", the opposite of my life. The only thing I thought would be completely opposite would be one year of humanitarian service. Did I have any gifts or skills to offer people in need? Could I end some of the suffering in the world? I applied to ten organisations, famous charities, Doctors Without Borders and World Vision and some of these big ones, Save The Children. Nobody would take me, because they didn't know how I was qualified at all.
Finally, one organisation said, "If you're willing to live in Liberia, post-war Liberia, and if you can pay us $500 every month, you can volunteer". So I was like, "I'm in".
Peter McCormack: Here we go.
Scott Harrison: I'm in. What's more opposite than that? Living in the poorest country in the world at that time and paying to do it. And that year, where I served as a photo journalist, I'd always taken decent photos and been a decent writer, I wound up spending a year that turned into two years, and that's where I saw dirty water for the first time in West Africa, and I learned that it was the cause of so much of the disease that the doctors that were there were trying to fight.
I kind of had this unlock. Wow, if I really cared about global health, maybe I could go back to that childhood vision of being a doctor, but I could do it through clean water, by just giving the world the most basic need for health and for life. And, I came back after two years, I was 30, I didn't know any better, I was living on a closet floor in New York City, because I didn't have any money and hadn't saved and had given everything I had away, and I just said, "I'm going to start a movement that helps people get clean drinking water and I'm going to help as many people as I can before I die".
Peter McCormack: And, in terms of going back to the projects then, so obviously that had a big impact on you wanting to make change, you must have examples of the impact it has had, communities where you've put water in and what it's done for the schools, what it's done for the women, what it's done for the hospitals, the economic impact; tell me some of that stuff.
Scott Harrison: Well, let me start with the data. The UN published an 88-page paper that looked at the economic benefit in a bunch of countries of clean water and sanitation. So, let me just say, these things do go hand in hand. You want to do water, and then you want to make sure that people also have access to sanitisation and hygiene. They found every dollar yielded four to eight times in economic impact. So, by investing $1, you got 4X to 8X, $4 to $8 economic return.
The big one, sure there were health savings, there were education improvements, but the big one was really turning lost time into income. I'm not exaggerating by saying that many women will walk eight hours every day, seven days a week, because if you don't walk on Saturday and Sunday, there's no water for your family. So, imagine then just giving a woman 56 hours back instantly when there's a water point near her home, five minutes away, ten minutes away. We see anecdotally stories of women selling rice at the market, building bricks, earning extra income, baking for the community, selling local beer and local brew. So, there's a huge data-driven economic impact.
Also, now we've got some before and after health studies. In the poll, we did a three-year lookback, after we'd done a big water system. We found an 82% reduction in diarrhoeal disease, and that's just by going on how many people were visiting the clinic in this whole region, pre-intervention for this, for dysentery and waterborne diseases, how many people post-intervention. 82% drop, so huge benefits there. But the story that I think sums it up best is a story from Uganda, and it's this wonderful woman named Helen Apio, and this is years ago, but interesting, our team was just in Helen's village two weeks ago in Uganda with an update. But one of my favourite stories.
So, we had built a well in Helen's village in Uganda and we'd gone there just to see, was the work done of a high quality, were the partners doing a great job with the training and the water committee, all that stuff. We sat with Helen and said, "How is your life now different after this clean water?" and she told us this story of two jerry cans, so two five-gallon yellow cans, plastic cans, that she would walk a far distance for water. She actually was getting clean water. She was going to a far-away well, but it used up her whole day and she went twice.
Now, she had a huge family, and she said, "Every day, I was faced with a decision. What do I do with too little water?" and she said, "Here are my options. Do I cook for my family; do I clean the house; do I wash my kids' school uniforms; do I let them wash their bodies; do I garden and grow food?" She said, "I always put my family's needs first, because that's what Ugandan women do".
She said, "Now there's clean water in my village right next to my house", she said this, Peter, she says, "Now I'm beautiful". We didn't get it, we're like, "Of course, Helen, you're a beautiful Ugandan woman, what do you mean?" She said, "You don't understand. For the first time in my life, I have enough water to wash my face and my body and my clothes", and she said, "Now, I'm beautiful. Look at me, I'm looking so smart".
Peter McCormack: It's just the dignity.
Scott Harrison: The dignity, right. Here you have a woman, who is stuck in a terrible situation, is trying to do the best she can for her family, who is out there on the road, walking for water, walking probably an extra distance to a far-away well so that it's clean water, and now she can be clean, her clothes can be clean. And what she was using is still probably a fraction of what we would take for granted, every single day, coming out of taps and out of our ice machines.
So, there are stories like that all over the world. We've seen schools where the girls' rate of tuition will jump up after a water project, because the girls don't have to walk for water anymore, they can go to school; they don't have to stay home four or five days every month because the school has no water and toilets. These things you don't even think about, it's just an awesome issue to work on, because everyone can stand for clean water, whether you're a Republican or a Democrat or an independent or a libertarian, everyone thinks people need water.
If you're a person of faith, or you think faith is anathema and the stupidest concept ever, you can still stand for clean water. So, it's actually allowed us to pitch a pretty big tent and invite a diverse group of people, who might fight about politics, social issues, fiscal policy, but can come together and stand for clean water, if it's done in a transparent and effective way.
Peter McCormack: Wow, okay. So, let's get into the numbers, let's talk about the economics of this. Early on, you said you separate the operational costs from the project costs, which I think is super interesting, because one of my friends was working for a charity at one point. I won't get the number correct, but he told me something like, for every pound they raise, 78p is used to run the charity. It was some ridiculous number.
Scott Harrison: It should be about the opposite of that.
Peter McCormack: Yeah. He was like, yeah, about 22% goes to the charity. I was like, "That's a real disincentive to give", because I would much rather just go and hand people money, where I know it's going to go. So, I'm not saying this is all charities, but I tend to find with charities, it can be opaque, what the split is or wherever it goes, and I've heard of extremely well-paid marketing directors at charities, extremely well paid. I'm not saying they shouldn't be and perhaps they need it, but it's just the opaqueness of it.
So, the fact that you've separated the two is super interesting. Does that mean you have to fundraise in different ways?
Scott Harrison: Yes. And, we do pay marketing directors well, because I'm trying to attract people from Square or Google or Pinterest, we're trying to get some of the best people. Now, we can pay a fraction of what those companies can and there's no equity; it's not like you get stock in Charity: water. But there's a guy, Dan Pallotta, who says some really smart things about overhead and how charities are so starved often that they can just never compete. I'll give you an example.
We launched a new membership programme, called The Spring, which is like Spotify or Netflix or Disney Plus or Hulu, for clean water, where people show up every month, they give $20, $30, $40 a month. We have about 75,000 members, and that allows us to help about 500,000 people every year, and those members are across 147 countries. But we don't really have a marketing budget, Peter.
Disney went from zero to 100 million people in a year, because they had a great catalogue and product and they had billions of dollars of marketing. So, I will say that the social sector is always at a disadvantage, because we can't compete on pay, we don't have these marketing budgets. I mean, people are very comfortable with Coke or Pepsi spending billions of dollars marketing like death. I mean, I'm just saying!
Peter McCormack: Sugar death.
Scott Harrison: Or Philip Morris. I'm not picking on him, I'm just kind of -- the construct. Even, you could argue, McDonald's is maybe not great for you. But they have almost unlimited marketing budgets to get people inside McDonald's to buy Big Macs or to buy Coke or to buy Pepsi. Save The Children, Doctors Without Borders, Charity: water, you could argue we're doing noble work around the world. We're trying to provide life's most basic needs for people, and you're always at that disadvantage. So, I think that's just worth saying.
We've tried to solve that by separating the overhead and saying to the public, "This will never be your problem. How much we pay our marketing director that we hope to recruit from Google will never be your problem", and we went to 120 people to pay for all that overhead. Most of those people, Peter, are entrepreneurs who have built businesses, and they know that without the top talent, and then retaining the top talent, you just can't execute with excellence.
So, it's the founders of Spotify and Pinterest. Jack was one of the earliest overhead donors to Charity: water, Toby from Shopify, it's Reid Hoffman from LinkedIn, or it's people who are happy to pay for the software engineer, or the marketing director, or the office, when we had one, to then allow this very powerful model to be offered to the public.
That said, we still run at 80% programmes efficiency, and 20 cents in the dollar to run the org. So, even though we're technically accountable, we're the opposite of what you just said; 20 cents on the dollar to run Charity: water. And this is all audited. We have posted 15 years of audited financials. And KPMG actually comes in and audits the 100% model every year and writes an opinion. And there literally are two separately audited bank accounts.
So, every single dollar we use for overhead has a paper trail that is audited behind it. You couldn't go on our website right now and find a single link that would stumble you into the overhead bank account.
Peter McCormack: And you raise about $100 million a year, did you say?
Scott Harrison: We will this year. We've done $600 million in total. We've been growing a lot because of this subscription programme, to be honest. I was with the Spotify founder five years ago in Ethiopia and we were in the back of a Land Rover, and I was just telling him where we were and how ambitious we were and how much money we would need to raise, and he was like, "Dude, your business model sucks! 1 January, your ticker rolls back to zero. All the money you raised last year, you have to go figure out how to raise it again and then grow. Why don't you just get a bunch of people to show up every single month loyally and tell them where their money's going and build momentum there".
I mean, it seems so obvious, Peter, right! But I'm like, "I guess I will".
Peter McCormack: I guess retention's good on that though?
Scott Harrison: It is. It's actually better than Netflix or Hulu or Amazon Prime even, our 12-month retention. And there's just a lot of people that can give $20, $30, $40 a month, especially if they know that all of it is going to help.
Peter McCormack: Can you pick your amount?
Scott Harrison: You can, yeah. I mean, we anchor at $40, which is what it costs to give one person clean water, but we have ladies in their 90s giving $10 a month off their pension. We have kids giving their allowance to their parents so their parents can donate on their behalf every month, because they don't have a credit card, and we have people that give $100 a month.
I mean, it's all over the place. It's really more about the consistent participation and our ability to bring this community along. One other detail: we even pay back all the credit card fees. So, we don't really advertise this, but for us to feel that there is total integrity in the 100% model, if you gave $100 a month on your Amex, I would actually get $97, but the overhead donors pay that $3 and then we send your full $100 to the field.
Peter McCormack: Great. Okay, so let's finish off on the Bitcoin Fund, Bitcoin Trust that you're building here and talk about how people listening can help. And I'll help. Send me your Bitcoin address afterwards, I'll send you $10,000, that's not a problem.
Scott Harrison: Oh, thank you, peter, that's amazing. So, the concept was barbell approach; could we find 100 people that would be willing to do 1 Bitcoin. We realised, depending on the timing the last couple of months, that's $30,000 to $40,000 or it's $60,000. And, we were calling that The Founding 100. Then I went and said, "I wonder if I could get somebody to match that?" so wound up getting the Winklevoss twins to match the first 50 Bitcoin that we got in that, and we're at 47.5. So, we're about 2.5 away from having 100, which is a great start to the fund.
That said, we've seen people that have done 1 Bitcoin, and we've seen a bunch of people that have done $100 in Bitcoin, who just like this idea. I think your listeners will get a kick out of this. As I went to a bunch of people and said, "Hey, would you donate 1 Bitcoin?" some of them said, "I'll actually give you the $50,000 so that you can buy the Bitcoin!"
Peter McCormack: They don't want to give you the Bitcoin!
Scott Harrison: So, we had people who loved the idea so much and they said, "I'm not going to part with my Bitcoin, but what's the price today? I'll wire you $51,000. Please buy that for me and put that in the Trust and lock it up". So, we've been pretty flexible. There's a website, it's all transparent, you can see who's given. You can give with your name, you can give pseudonymously, you can give completely anonymously, and it is tax deductible.
Peter McCormack: Give me the address.
Scott Harrison: It's charitywater.org/bitcoin.
Peter McCormack: Right, I'm going there now.
Scott Harrison: Thank you so much, I appreciate it. So, we're very close to unlocking this 50 Bitcoin match, which is $3 million today and I believe a lot more in the future. And I will say that, while this is a simple idea, we're not messing with DeFi; it's in cold storage, we're going to hold it and then start releasing it in 2025. But we hope to spend this money in Bitcoin in 2025 and beyond.
So, the thought is not to convert back to dollar or euro, but maybe even pay for these water projects using Bitcoin four years from now; or, at the very least, go from Bitcoin to the local currency, kind of bypassing our fiat system. So, I think we might be able to do some really interesting things, putting an advisory committee together, between now and that moment where it's released and it starts helping people get clean water in the future.
Peter McCormack: Well, there's a chance that it appreciates as quick as you can spend it at times as well. That four-year halving goal is really good. Obviously, we hope that Bitcoin does another 10X in that period, and Bitcoin goes from $50,000 to $500,000 or something, and that's going to accelerate your project. So, I think that's a super smart idea. I've got the page open now, so I'm going to go and I'm going to send you $10,000.
I'll ping this out to everyone. Everyone listening, go fucking check this out and donate. We're only 2.5 Bitcoin, even less; what's that?
Scott Harrison: 2.3 Bitcoin away from unlocking 50.
Peter McCormack: Yeah, we're 2.3 Bitcoin away from unlocking 50. So, let's everyone donate, everyone go and support Scott. This is an amazing project. Dude, keep crushing, man.
Scott Harrison: You're so kind. Thanks for letting me tell the story, and you were so nice to me in Miami and I appreciate the friendship and your care.
Peter McCormack: I'd like to do this again in person; I much prefer in-person interviews. So, maybe in Miami next year.
Scott Harrison: Maybe April, and we've got some huge news when you come back to Nashville. I'm in New York next week, I'm in LA all the time.
Peter McCormack: You're in New York next week?
Scott Harrison: I am.
Peter McCormack: What dates are you there?
Scott Harrison: 26th and 27th.
Peter McCormack: For fuck's sake, we could have done it! I'm there 26th to 29th. Look, let's hang, let's grab a coffee anyway, if you've got time.
Scott Harrison: Of course, man, thank you. Thanks for the kindness. Your community's great and I guess the last thing I'd say is I really Bitcoin can be a force for good in the world, and we're just trying to prove out a model here for maybe other charities to take this super innovative thing, this resource, and turn it into water. I mean, if we can turn Bitcoin into clean water for people, I just think it's a good thing to do, it's an inarguable common good there and a really positive story.
Peter McCormack: I couldn't agree more. Just tell people where to go again, and tell them where to follow you as well.
Scott Harrison: Sure. Charitywater.org/bitcoin, and I'm just my name and Charity: water I guess wherever, although I just post about my kids these days! But go follow Charity: water.
Peter McCormack: All right, my man, listen, stay in touch. Anything you need, you can always reach out to me, you've got my number. And, yeah, maybe I'll see you in New York next week and if not, I'll definitely see you in Nashville next year. Keep crushing it, man, it's an amazing project. Yeah, just congratulations for everything you've achieved for so many people.
Scott Harrison: Thanks, man, you're kind and I appreciate the friendship.
