Community Foundations: Enabling Nonprofit Growth Through Technology Investment

While the role of community foundations in supporting nonprofit capacity building is well established, events of 2020-21 have revealed technology as one of the most important avenues to nonprofit growth and sustainability, requiring a need to shift capacity-building grants and programs to fund technology needs. Therefore, community foundations have an opportunity to adjust their grantmaking processes to allow nonprofits to invest in the technologies that will enable them to further grow and maximize their impact. 

NonProfit Times recently shared that the global pandemic required two cures: “One to keep people safe and healthy from COVID-19, the other to enable the world to work, mostly by using technology from home.” 

Unfortunately, many nonprofits have limited technology resources. Staff must often rely on shared technology that can only be accessed in the office, which restricts their ability to work remotely and effectively pursue their missions during these changing times. Author Amy Sample Ward, CEO of The Nonprofit Technology Network stated, “Working from home creates demand for more equipment at a time when resources are at their lowest, creating an instant digital divide that hampers mission delivery.” While these technology needs became more apparent in the past two years, it’s also been proven they are here to stay, which is why community foundations should consider shifting their strategies to fund these needs.   

In Foundant’s Fall 2021 webinar, Enabling Nonprofit Growth Through Technology Investment, several Foundant clients shared approaches to increasing nonprofits’ resilience, capacity for growth, efficiency, and effectiveness through technology investment. Leaders from Community Foundation of Elmira Corning and the Finger Lakes, Community Foundation of Southern New Mexico, and Quad Cities Community Foundation each provided a unique perspective based on local needs and lessons learned along the way. Their successful programs shared common foundational elements for other organizations to consider. All three organizations discussed the importance of adjusting the grantmaking process, measuring the impact of investment in technology for nonprofits, and understanding that technology will continue to enable nonprofits’ long-term sustainability.  

Adjusting Your Grantmaking Process 

Each of the community foundations featured in Foundant’s webinar sought to adjust their grantmaking process to help fund technology needs in several ways:

Operational Funding 

The challenges created by COVID-19 led to a shift in funding requests. The pandemic demonstrated a clear need for operational funding, rather than program and project-specific grants. All three community foundations responded to increasing technology needs by creating operational funding grants to support these requests. 

Community Foundation of Elmira Corning and the Finger Lakes (CFECFL) adjusted its grantmaking process to fund nonprofits through both mini grants and large investment grants focused on operational funding. They began by offering mini grants for up to $1,000 that primarily supported the purchase of Zoom licenses, laptops, and iPads to facilitate remote work. CFECFL soon realized the organizations they were supporting had needs for bigger ticket technology items. As a result, their board later approved large investment grants that enabled organizations to apply for up to $25,000. By supporting nonprofits’ general operating needs, grantmakers can help nonprofits become more sustainable. 

Terra Winter, President and CEO of Community Foundation of Southern New Mexico (CFSNM), stated, “The programs we have funded through program grants are really important and continue to be important, but the organizations can only really grow if we can help them build capacity and a strong foundation.” 

Adjusting the types of grants your community foundation offers enables your organization to support nonprofits’ differing needs, without limitations. 

Communication is Key 

In addition to connecting with nonprofits to better understand how to adjust your grantmaking to meet their needs, it’s also critical to continue these conversations throughout the application process to discuss eligibility requirements. 

The Technology Association of Grantmakers (TAG) partnered with the Nonprofit Technology Enterprise Network (NTEN) and NetHope to identify the most pressing technology needs for nonprofits. Their report states, “Finding out what nonprofits and grantees need right now means asking and then listening deeply. Needs vary greatly depending upon staff size, skills, hardware, geographic location, and baseline internet connectivity, so responsive funders are opening direct and rapid communication channels between program staff, IT staff, and grantee partners.” Listening to nonprofits helps ensure your organization can support their most critical needs.  

Lisa Stachula, former Grantmaking Specialist at Quad Cities Community Foundation and new Client Success Manager at Foundant, expressed the importance of having conversations with applicants to ensure their request is the best use of grant funds. She explains, “I strongly recommended that applicants call me or email me first to discuss the project, so I could make sure that they’re submitting an eligible request, and I could talk to them about anything that might be a red flag.” 

There is often confusion between applicants and grantmakers regarding the eligibility of requests. Therefore, it’s important to have conversations with applicants to provide clarity on what your grants can and cannot cover to help save them time and increase their opportunity for success. 

Measuring the Impact of Your Investment in Technology for Nonprofits

The community foundation representatives shared the positive impact they’ve had on nonprofit organizations through technology investments. 

Increased Efficiency 

Operational and capacity-building technology investments allow nonprofits to increase their efficiency in many different ways. According to Forbes, “Technology doesn’t just help nonprofits engage with donors and track outcomes, but it can also make them run more efficiently by streamlining their reporting and compliance procedures, increasing communication and cooperation (both internally and with outside stakeholders), and allowing them to allocate resources more effectively.” 

Quad Cities Community Foundation (QCCF) worked with multiple nonprofits who were only using desktop computers. This required the nonprofits’ caseworkers to take handwritten notes during one-on-one meetings with clients and then go back to the office to enter the notes into their desktop computer at the end of the day or early the next morning. 

“When these organizations received a capacity-building grant for laptops, the caseworkers and employees could work with clients and take notes directly on site, helping them to more easily and efficiently complete their work on schedule,” said Lisa Stachula.  

After receiving technology funds, the organizations saw improvement not only in work efficiency but also in employee satisfaction. Implementing technology investment grants into your grantmaking process can increase nonprofits’ productivity, as well as employee retention rates.

Increased Access 

Offering technology investment grants also allows for additional fundraising opportunities. CFECFL hosts a Giving Day through an online platform. After three years of hosting this online donation event, CFECFL found that shifting from traditional fundraising events to a digital platform has enabled them to reach an entirely different pool of donors. Not surprisingly, they have found younger generations are more immersed in technology and prefer to make donations through an online platform, while older generations still prefer writing checks at fundraising events. Supporting nonprofits through technology grants enables them to diversify their fundraising strategies and reach a broader and larger range of donors. 

Increased Resilience 

To ensure that operational and capacity-building grants were effective, the community foundation panelists sought feedback from the nonprofits they were supporting. CFECFL conducted focus groups and surveys to receive feedback. The nonprofits stated that access to this type of funding is very limited, and they expressed their gratitude towards CFECFL for providing this type of support. One of the nonprofits shared that after the pandemic they want to be “virtually prepared for anything.” Providing support through technological investments enables the nonprofit organizations your foundation is supporting to build that resilience. 

Looking Ahead: Supporting Nonprofits Long-term Sustainability through Technology

The COVID-19 pandemic increased the demand for technology-based work environments. And while many nonprofits adapted to this change, the push for technology will only grow moving forward. 

“COVID has pushed us forward in the technology area, but I think it’s here to stay. This is the new norm,” stated Lisa Stachula. 

According to Forbes, “As competition for grants continues to surge and the demand for hard data and clear outcomes increases, tech-powered nonprofits will flourish.” 

Therefore, it is important to have conversations with the nonprofits you are supporting to explain that going back to traditional board meetings, traditional events, and the traditional work environment isn’t necessary if technology has helped them establish a more efficient and effective workflow. Encourage them to think outside the box and consider how technology can make that possible. 

3 Steps to Get Started

The community foundation panelists shared three important steps to start this technology-focused, capacity-building process in your organization:

1. Collaborate: It is important to bring the organizations in your community together to create a shared understanding of the importance of technology. These organizations can then collaborate to push initiatives forward as the demand for technology continues to increase. For example, Terra Winter with CFSNM talked about working with partners to advocate for expanding access to broadband in the rural counties of New Mexico. 
2.   Start Small: Start small and test the waters to understand the effectiveness of capacity-building and operational funding. This will open your organization up to larger opportunities down the road that will further your impact on nonprofits. Sarah Palmer with CFECFL credited her organization’s success to starting small with a mini grant program. CFECFL measured the positive impact of the mini grants, which helped them to later get approval for large investment grants.
3.   Share Success Stories: Sharing success stories is a great way to push an initiative forward and gain additional support. Box.org recently conducted a case study with 16 nonprofit leaders. They found the most effective way to push technological funding within nonprofit organizations is through effective impact storytelling. According to the nonprofit leaders and funders interviewed, the key to this is “telling compelling stories that show clear links between technology and helping people.” Steve Hunt, Chief Technology Officer at Team Rubicon stated, “Foundations are more likely to have a change of heart and fund for capacity if they know the stories of how it can lead to impact. They need clean, simple examples of how technology has rung true to efficiency and impact.” 

Terra Winter shared her foundation’s success story in providing the Boys and Girls Club with technology grants that gave children access to interactive games. CFSNM took videos and pictures demonstrating the impact this technology had on the children. This allowed the foundation to show its board that funding should go beyond traditional programming and incorporate additional capacity-building support.

Funding nonprofits’ technology needs helps support their resilience, capacity for growth, efficiency, and effectiveness—ultimately helping maximize their impact on their communities. The practical ideas and examples provided by these three community foundations can be incorporated into your organization's funding approach to best serve your grantees. For community foundations looking for additional ways to support nonprofit strategic technology investments, Foundant can help! Contact us to learn more.