Core Themes Related to Grant Seeking and Technology

Allocating and raising money to fund technology is complex. Nonprofits often complain that they have little time or expertise to develop clear technology plans and find themselves submitting proposals that are ill-defined and stand little chance of being accepted. They also ask funders why traditional funding practices are not evolving to adequately deal with technology funding needs that are inherently different then other types of funding.

Funders point out that they have different approaches to their grantmaking and often admit that they do not know enough about technology to put out guidelines that make things clear for grantseekers. They lament the fact that most proposals they see are not well crafted and do not show that the organizations themselves have thought strategically about how to integrate technology into programs and operations.

In May 2003 we brought together two community foundation staff, a family foundation staffer, and three nonprofit executives for a roundtable discussion about funding, grantseeking, and technology. We had two primary goals for the group:

• Identify ways nonprofits can think more strategically about how they fund their information technology needs.
• Clarify what grantmakers struggle with in relation to funding technology and develop suggestions for how nonprofits should deal with those issues.

As you'll see from the discussion, several core themes emerged from the discussion. We hope you find them informative. It is a long list of variables and challenges that affect how nonprofits budget and generate funding for technology. The following discussion addresses some of the central issues facing those interested in funding technology. For a fuller treatment of the issues see the study, From Obstacles to Opportunities Version 1.0.: Six Interlocking Elements of Strategic Technology Grantmaking .

The General Operating Support Quandary

Investing in infrastructure is often seen as something that takes away funding from service delivery, instead of something that is an integral component of delivering effective programs.

Let's face it, funding assessment, planning, equipment, training, evaluation, and technical support are not sexy. Many funders want to put their money into programs that pull on the heart strings, and nonprofit staff see resources put into technology and associated training as something that takes away from their "real" work.

It is important not to point the finger at funders, but to look at our own budgeting practices. Many organizations (our own, for example) simply do not adequately budget for infrastructure. Of course, this creates a vicious cycle through which infrastructure isn't adequately funded. This leads to poor and inappropriate use of technology, which only bolsters the case of technophobes that technology is not relevant.

When organizations don't appropriately budget for infrastructure and ignore technology budgeting altogether, they often fail to understand why technology is a critical tool. As one nonprofit roundtable participant said, "I think funders tend to see funding the acquisition of technology for administrative purposes as general operating support, and that is really a burden for us, especially since we all know now that you can't keep your hardware for longer than four years. So you're constantly scrambling to find more money to upgrade and keep current."

A funder in the roundtable said, "A lot of my fellow funders tend to lump in what many consider to be critical technology tools with the overall bugaboo about general operating support for technology. I think that asking the question, would you write a check to an organization that doesn't have a phone number, can often illuminate a lot of the absurdity of trying to divide everything [between] program [support and] general operating support." Her comment highlights the challenges that nonprofits face as they approach funders that are not yet changing their grantmaking practices to deal with today's nonprofit needs.

The Need for a Strong Case Statement

In the course of the discussion, funders said that they need to feel assured that organizations have carefully thought about their technology funding needs. They noted the importance of having an assurance that the organization is ready for the changes technology brings and has the capability to manage the technology on an ongoing basis. In addition, funders said that the organization should know what it needs, make an appropriate request, and understand that the technology needs to be well-integrated into the organization's programs.

One participant said that it's important for nonprofits to know how to express the real value of technology as a critical tool. The value may come in the form of hours saved or other direct costs of not having that tool. This value impacts the organization's overall financial health, and nonprofits need to express this, too.

When Funders Don't Understand the Benefits of Technology

These statements from the roundtable particpants reflect concerns about funders that lack knowledge about the benefits of technology:

"In the biggest affinity group in the country for foundations, only two-thirds of its members have provided e-mail addresses to the association, and of the remaining third, half of them don't have an e-mail address and the other half are suspicious about allowing anyone to have their e-mail address -- which makes it interesting as to why one would have one in the first place. [There's an] age gap [that] means that a lot of the people in the nonprofit community feel that it's a given that you have to have a computer. They're likely to have one at home, they're used to having one on their desk, and all sorts of related technology. That is not true for most foundation boards."

"Our board is inclined to understand the value of technology. I think the challenge comes more from our foundation program staff who have deep field expertise in different program areas ... but very limited experience [with technology]. Many of us are older as well, and don't feel like we [understand] technology requests well enough to make a strong case for them. I would suggest that ... acquiring the field expertise in IT assessments would be one of the best things a foundation could do. If not a staff person devoted to reviewing those sorts of things, [the foundation should find] an external expert who [would be] on call to assist the staff in reviewing those kinds of requests."

"Sometimes you have board members of foundations who themselves bought a computer ten years ago and who, since they don't use it for anything besides typing letters to whomever, for them, the idea of upgrading is, if they're honest about it, scary. It's not just about being cheap (which it's also about). Generally speaking, [it's about] the value of [paying for] time: 'What do you mean you're paying an IT professional somewhere between $65 and $110 per hour? That's an outrageous salary!' I think that what the funders who get it really need to do is make every effort to educate their colleagues. Not just word of mouth, but in the publications for their affinity groups and regional associations of grantmakers, etc."

Sustaining Support for Technology Over Time

During the discussion, there was general agreement among nonprofits and foundations that there is a need to integrate technology budgets into operating budgets. There was consensus that budgeting and planning for replacement of hardware is essential and that resources need to be allocated in order for technology to become supportable.

Said one participant, "Technology -- at least on the administrative side -- is viewed as an ongoing need. Funders aren't making a commitment for forever to their grantee. How do you say, 'You're at the end of your three-year cycle,' or, 'You want support to renew your office computers; who's going to do it next time?'

"A couple of years ago I was at a funder's panel and I asked folks how many of them had accidental techies. I would say at least one-half to two-thirds of the folks raised their hands. The second question I asked was, 'How many of you have accidental CFOs?' There wasn't very much hand-raising at that point. The point wasn't to make them feel bad. [We] know it costs a lot and ... we know that the acquisition of technology to build capacity comes with costs."

"As a funder, if we're going to fund technology for an organization, not only do we need to know that [the grantees] know what they need and can make good use of it, we also do need to see plans for how the continuous upgrade and continuous training pieces are integrated into the operating budget of the organization.

"Most funders that fund the start-up programs want to see ... the long-term plan for this program being integrated into the organization's core, because we can't fund core operations, programs in perpetuity, tech upgrades in perpetuity -- we can't do all of that for organizations. I think, certainly when we did our major technology upgrade for a group of organizations here, a big part of that was providing them with some expertise around how they plan for integrating the maintenance of that technology into their core operating budget. It's not an easy thing to do, I don't mean to suggest that it is something that can be automatic, but I think that's an additional piece of thinking that nonprofits have to do, a case they have to make with their own boards around resource allocation. It may be [a case of saying], 'Gee, we've got this new program ready to go next year, but we've also got this technology need, and we need to be able to put some basic dollars to the maintenance of that technology, and we can't roll the program out until six months from now.' So it's a resource allocation question at the board-level for the nonprofits as well. If funders see nonprofits undertaking those tough decisions, then I think we have greater insurance that our investment is well-spent."

"Any program that is going to continued without long-term reliance on us, that, by definition, to my board, just from a resource allocation issue, is a very important and compelling argument. For example, fairly recently we got a proposal in which it was made clear that, for the proposal to be fully funded, there had to be five funding partners, and each partner was going to have to take a piece. There was the tech assessment, the acquisition of hardware, the acquisition of software, the training, and a two-year IT consultant built into the proposal as a whole, which was part of creating a bigger database, a bigger data management project for multiple organizations, but housed at one. The five funders all agreed to do it, because we knew that our piece was simply a part of [something] much bigger [that was] completely thought-out."

Mixed Messages About Funding

Funders expect a strong assessment and planning process, but as one funder said "Funders know that the minute we fund planning we're going to get the implementation request." On the flip side, organizations may be reluctant to engage in extensive planning if there are no implementation dollars being offered.

Said the funder, "Part of it is that there's a delicate dance here, and the planning aspect can be viewed as an extension of that: 'I'm trying to figure out what the funder is looking for. They know what they're looking for, they're just not really telling me.' On my side, it's, 'I really want to know what you're looking for!' So sometimes there's that delicate balance. The second thing about planning ... is helping nonprofits find the right expertise, and making sure whether it's a consultant, vendor, board member, whatever, that they're comfortable with that person ... and that we are, [and] that the end-product will meet both of our needs. The planning process does not guarantee implementation. The good news is that we know more about your capacity, and the bad news is that we know more about your capacity."