Grant Makers Should Stop Resisting Nonprofits’ Pleas for Increased Technology Funding

Sam Fried

Nonprofits are more desperate than ever to upgrade their technology tools and skills. Unfortunately, few grant makers are listening. If you want to see a donor’s eyes glaze over, try peppering funding pitches with words like “technology infrastructure” and “cybersecurity.” The data paints a stark picture of the challenges facing […]

Nonprofits are more desperate than ever to upgrade their technology tools and skills. Unfortunately, few grant makers are listening. If you want to see a donor’s eyes glaze over, try peppering funding pitches with words like “technology infrastructure” and “cybersecurity.”

The data paints a stark picture of the challenges facing nonprofits. In a recent global survey of nearly 12,000 civil-society organizations by TechSoup, 68 percent said cost is their number one worry when it comes to adopting new digital tools. The second highest concern, at 53 percent, is training staff to use those tools. Additionally, most nonprofits still rely on outdated modes of cybersecurity such as antivirus software, with just 39 percent saying they have instituted more effective protections, including firewalls and network-level security — now considered standard in most organizations.

The top barrier to making any of these digital improvements? You guessed it — a lack of funding, according to 77 percent of those surveyed.

By contrast, foundations seem to have little reticence about spending money to upgrade their own technology. More than 80 percent of foundations surveyed by the Technology Association of Grantmakers, which I lead, have implemented firewalls and other advanced security measures to protect their privacy and financial and data assets.

Why then are grant makers neglecting what nonprofits tell them they need?

One possibility is that few foundation staff appreciate technology’s critical importance to nonprofits as they struggle to fulfill their missions and survive in communities reeling from the pandemic. The evidence, however, doesn’t back that up.

Foundation tech staff and leaders who participate in programs provided by the Technology Association of Grantmakers frequently discuss the importance of digital upgrades, cybersecurity, and technology training in the nonprofit world. For example, philanthropy tech leaders who took part in our six-month taskforce on digital infrastructure in 2020-21 became fully aware of nonprofits’ pressing needs for internet cloud-based technology, hardware upgrades, and data and tech literacy.

Additionally, organizations such as TechSoup and the Nonprofit Technology Enterprise Network, known as NTEN, regularly publish studies that highlight the gap between nonprofits’ tech needs and their ability to meet those needs. An NTEN report last year found nearly 70 percent of nonprofits had to make an additional investment in technology to continue operations during the pandemic. It also found that nearly two-thirds lacked fully integrated tech systems for managing their operations, with most relying on inefficient separate systems in areas such as finance, procurement, project management, payroll, and grant management.

So, with all this information readily available, why are nonprofits still struggling to get the financial support necessary to become fully functioning participants in the digital age? Here are a couple of possible explanations — and approaches to get over these hurdles:

Foundation tech and program staff don’t communicate and coordinate effectively. While foundation operations staff such as IT leaders understand the basic technology needs for any modern organization, they typically lack access to program dollars. Conversely, program staff responsible for grant making aren’t always knowledgeable about or interested in nonprofits’ technology operations.

Even when potential opportunities arise to support a grantee’s technology needs, program staff rarely consult their IT colleagues when reviewing those proposals. The result: Nonprofits may receive grant funding for an exciting new mobile app related to a specific program but don’t get the funds they need for critical infrastructure to support it, including digital tools, tech skills training, and enhanced cybersecurity.

Changing this dynamic is certainly possible, as a handful of innovative philanthropic efforts demonstrate. The Pierce Family Foundation, for instance, has made technology investment for grantees a priority since its founding in 2007. The foundation’s chief technologist, David Krumlauf, works directly with grantees to understand their tech needs, often starting with interviews and an inventory of current technology before helping to develop a plan and budget for upgrading their digital systems. In addition to providing grantees funding for these projects, the foundation offers training on tech tool usage and cybersecurity.

Some philanthropies were prompted by the pandemic to increase support for technology within existing grants. The Ewing Marion Kauffman Foundation, for example, historically responded to grantee technology requests with a referral to partner organizations that specialized in that area and possibly a small amount of additional funding. But as the pandemic took hold, its director of technology, Donell Hammond, began hearing from program staff that grantees needed more support for technology. In response, the foundation developed a pilot program that brings together the IT and programs departments to fund grantees in digital literacy, hardware and software, and software systems. In September, the first grant was awarded through the project — $25,000 to an after-school program that has low internet connectivity in its facility.

Collaborative approaches to addressing technology shortfalls are nearly nonexistent. To date, providing tech infrastructure has been the purview of technology vendors and nonprofit organizations such as NetHope, NTEN, TechSoup, and Tech Impact, which offer a range of sometimes overlapping solutions, including technology assessments, training, support, and discounted software. None of these organizations alone supports the full range of nonprofit tech needs, and they often compete with one another for funding, typically from individual foundations.

A far more effective approach would be to funnel this work through a funding collaborative, modeled after efforts like the STEM Funders Network, which develops strategies and pools resources to support science, math, technology, and engineering programs for underrepresented youth. The network successfully brought together the nation’s largest youth-development organizations — the Boys & Girls Club of America, the National 4-H Council, YMCA of the USA, and Girls Inc. — to develop STEM programs across the United States.

A collaborative effort of this kind, which would combine the resources and expertise of donors, nonprofits, and business and government partners, is sorely needed for nonprofit technology infrastructure. Such a collective might commit to reducing the burdens on nonprofits through the development of common tools for grant applications, reporting, data collection, and open-source information platforms. It might fund the creation of tool kits that help nonprofits address one of their top priorities — moving fully to cloud-based technology.

As philanthropy considers its responsibility to rebuild society after the pandemic, foundation leaders are making the case for greater infrastructure investment in American cities and to facilitate civic engagement. In that spirit, philanthropy needs to step up investments in nonprofit technology infrastructure as well. Although perhaps less visible than public transit, water systems, or community centers, cloud-based technology, cybersecurity systems, and digital skills are foundational elements upon which the modern nonprofit relies to deliver services and programs.

It’s time for grant makers to listen deeply to what their nonprofit partners say they need — even when the answers aren’t what they want to hear.

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