Organizational Leadership

How Technology is Funded: The Basics

As a program director or member of the management team of a nonprofit, what can you do to improve the prospects that your organization will get funding for needed technology? This article provides tips on seeking donations from companies and foundations for technology grants.

The following is an excerpt from The Accidental Techie.

Talking with more than one funder about technology is akin to asking a roomful of people to look through a kaleidoscope pointed out a window. Even with the same instrument and the same view, each person will likely describe a different scene before them.

Consider this: A foundation recently awarded a technology grant to a nonprofit for a network server, several personal computer workstations, and outside consulting assistance. What do you think is the overarching purpose of the grant?

  • To replace an unstable peer-to-peer network and to enable a new fundraising database to be installed.
  • To close the digital divide between technology haves and have-nots in the community.
  • To help local youth develop new digital media and content as a form of self expression.
  • To access a funding organization's intranet as a tool for reporting and collaboration with other nonprofits.
  • To create a new model of community organizing and advocacy via the Internet.

The correct response, as you may have already surmised, is that each answer represents a strong and compelling, yet different, reason why a funder would support a nonprofit's technology. Funders arrive at technology funding from different places—some view it as essential capacity building, others as a way to facilitate communication, connection, and collaboration, while still others see it as a key component to empower and engage clients through community-based services and programs.

What funders of technology do have in common is a desire to see that the implementation of technology is successfully aligned with the mission of recipient organizations. In your quest to raise resources and obtain grants, tap into the funder desire to ensure that, above all, your organization's ability to meet its mission is well served by the technology you are seeking.

Cash Grants 

As a grant seeker, following universally good grant-seeking practices will do more to build positive relationships and credibility than your ability to deploy the latest version of a database or to re-launch your website with a content management system. When it comes to technology grant-making, funders often say "Never lead with the technology." But at the same time, it is the appropriate application of technology that will determine the successful implementation of a grant. It is likely that technology is on the radar of every funder who is concerned with capacity building, data collection and measurement, communications and outreach, disability access and cultural competency, electronic media, skills training, culture and arts, not to mention the direct impact on the communities themselves.

As an accidental techie, what can you do to improve the prospects that your organization will get funding for needed technology?

Learn the basics of grant seeking. If you are not a grant writer, make an effort to learn the best practices in resource development for your nonprofit and what makes for quality proposals. Resource centers all across the country carry information about foundations, including copies of annual reports, funding guidelines, searchable databases, and grant writing workshops. 

Document your organization's technology assets and stories. By this, we don't mean just providing an inventory of computers and equipment; we refer to being the keeper of institutional knowledge at the nonprofit to identify instances when technology proved its strategic worth. It might have been in the development of an important database in a membership campaign, or the quick launch of a website that educated visitors about an impending public health crisis, for example. You are in the best position to articulate why and how technology has made a true difference in the impact of your organization.

Provide input and information on the technology-related portion of budgets. This is important at both an organizational level (for operating budgets) and at a programmatic level (for proposal budgets). Program officers, especially those whose expertise is not in technology, often consult with their information technology staff when reviewing technology proposals. In addition, seek to include technology overhead into every funding request, regardless of whether the proposal itself is technology-oriented.

Be a technology "translator." Funders, nonprofits, and techies often communicate in what seems like widely different languages. This often happens in person (at meetings) and on paper (in proposals). As an accidental techie, strive to communicate information about technology clearly and in plain language.

Carefully and regularly appraise your technology costs and consultant bids. What is the difference between a $1,000, $10,000 or, even, $100,000 website? Prior to writing it into a proposal, examine the technology costs for bids and ask potential contractors or vendors to support their numbers instead of simply "cutting and pasting" them into the document. Remember that a program officer will look closely at your numbers—even if you haven't.

Talk with other accidental techies about possible funding sources and opportunities. Especially if you have targeted a specific funder for a request, do additional homework by talking with your counterpart at another nonprofit that has already received a grant from that funder. Ask if they would be willing to make an introduction or provide a reference for you. Build relationships with program officers who oversee grant portfolios whose priorities match those of your organization.

Learn about funders, their priorities, and patterns of giving by reading annual reports, websites, and grant guidelines.

In-Kind Donations 
Recognize that technology funding doesn't always mean cash grants. In-kind donations of hardware, software, or services should be a valuable part of your resource development strategy and may be easier to obtain than cash grants, especially from technology companies.

If you have been granted a technology donation, be sure that it is compatible with your existing technology and systems. (Your technology inventory and assessments can guide you toward what types of equipment and software will be acceptable.)

And don't limit yourself to just thinking about compatibility at the equipment or application level. New hardware or software invariably means new training and support needs for you and the rest of the staff. Graduating users from one version of an application to the newer version will require less retraining than migrating to a different piece of software altogether.

If you are preparing to seek donations from companies, also inquire whether they have employees, especially techies, who would be interested in volunteering with your organization. It may be possible to get discounted or donated services from Internet service providers (web hosting) or application service providers.

In the end, treat in-kind donations as valuably as you would a million-dollar grant. Acknowledge the gifts publicly and privately. Be a role model for how a nonprofit can creatively apply technology to your mission. Keep the donors abreast of how you are using the technology and the impact it has made on your organization.

How Funders Assess Technology Requests 
Funders want to help—but they also want to ensure that their investment is going to be used effectively. Funders want you to demonstrate sufficient technology capacity and a sustainability plan for technology. Most funders consider at least the following five questions as they assess whether to support technology requests:

  • Is it too expensive?
  • Is it too complicated?
  • Is it too much to do at once?
  • Does it relate to the organization's mission?
  • Does it relate to the foundation's mission?

Imagine yourself at a site visit where a local nonprofit is seeking funding from a foundation to upgrade its information technology and client tracking system. Let's see how each of these questions apply:

  • Is It Too Expensive? 
    Funder: The price tag of the technology purchase ,coupled with the ongoing costs of technology maintenance, seems steep.

    Nonprofit: While the budget may appear high, for this technology project we looked at several alternatives. We determined that this current configuration maximizes the impact that the technology will have on our organization and will be cost effective in replacing several separate pieces of equipment. We joined with two other organizations that are also upgrading their technology and have negotiated an additional discount from the vendor. Some of the designated software was available through TechSoup for only an administrative fee. All in all, we've been able to lower the effective cost of the project, and still have the same level of technology functionality.

    Budgeting for the cost and the life cycle of technology is a key part of being an effective technology grant seeker. Drafting a technology plan is a good way to begin seeing an organization-wide picture of your technology needs and costs. It also allows you to plan beyond one single grant proposal or one single funding source for technology.

  • Is It Too Complicated? 
    Funder: How do you plan to manage the installation and the maintenance, especially since you only have an accidental techie for the support?

    Nonprofit: It's true that our accidental techie is a generalist, but she built the original network and bought the first batch of computers. She is the person most familiar with the technology aptitude of our staff. This also builds on her skills and experience with previous versions of this brand of equipment. Through our recently drafted technology plan, we have analyzed our resource needs beyond the initial purchase and will build into our operating budget upgrades to the technology over the next three years.

    If you can, propose the simplest system that addresses your requirements. Once again, a technology plan should aid in simplifying a roadmap for your organization.

  • Is It Too Much to Do at Once? Funder: How realistic is it that you will be able to implement everything in this proposal while still providing for everyday services?

    Nonprofit: We've planned to roll it out in two phases over the year, but we'll still need to push hard to hit the timelines and milestones we listed. We checked in with other organizations that have launched a similar project. They told us that having an adequate and secure physical space was one of the critical paths, which we've already completed. We also hired an outside MIS consultant, recommended through a techie's listserv, to help with the initial installation, more complicated troubleshooting, and the training of our accidental techie.

    Three key resources when it comes to technology deployment are money, time, and staff. While you may not have full control over what types of money will come to your organization, you do have better ability to control the timing and the timeline of technology projects.

  • Does it Relate to the Organization's Mission? 
    Funder: Launching this technology is a new area for you. How does the technology change what you do?

    Nonprofit: It's very much in keeping with the mission of the organization. Our client population, which was once located only in this neighborhood, has slowly spread out regionally. We see the technology as giving us the tools to better stay in touch with the clients.

    We'll also be able to better coordinate services by publicizing events through our website and tracking data in our case management system. Put simply, the new technology will allow us to do what we do better and represents an extension of our service area.

    Often, a proposal will contain technology support that seems new, but actually supports tools or projects that an organization has worked on for a period of time already. Or, if technology has not been a core area of expertise or part of your programming, consider partnering with another nonprofit for the funding request. Either way, ensure that the link between the proposed technology and your organizational mission is clear and direct.

  • Does It Relate to the Foundation's Mission? 
    Funder: You haven't explained the technology well enough for me to make the case to fund it.

    Nonprofit: As an existing funder of ours, you know that we share your goals of promoting educational and economic opportunity in this community. The proposed funding will do three things to improve our current technology infrastructure: staff time will be saved, especially for our accidental techie, because we will spend less time fixing unexplained crashes; it will allow us to access and share information electronically so that our service area and time in the field can be greater; with the new database management system, we will be able to better track and report our outcomes to more accurately reflect the impact of our program services in the community.

    The bottom line is that funders support programs that meet your mission and theirs. They are concerned with effectiveness, impact, and scale. Many funders are also worried that technology proposals designed to increase access and reduce barriers wind up making things worse without adequate planning. Demonstrate how your plans for technology and the role of the accidental techie align to help you meet the goals of your organization and your funder.