Ten Tips for Funding Technology

Ten Tips for Funding Technology

Fund technology so you can do work that really matters

By: Bennett Grassano

January 22, 2004

Technology Planning is great, but how are you going to pay for all the new equipment, training, and staffing costs your plan requires?

There are no silver bullets when it comes to fundraising, especially during tough economic times. Here are ten tips to help you find the funds you need to implement and sustain your critical technology strategy.

  1. Build strong relationships with funders.
  2. Incorporate technology into your annual strategic plan.
  3. Focus on your mission and your program, not technology for technology's sake.
  4. Budget technology expenses as shared costs, not overhead.
  5. Target likely technology funders.
  6. Maximize existing resources.
  7. Use local community technology resources.
  8. Partner with others for joint grant proposals.
  9. Generate unrestricted revenue where possible.
  10. Spend less on technology purchases.

Step 1

Build strong relationships with funders: Fundraising is essentially about building relationships. If you can establish a rapport with foundation program officers or senior executives who are sympathetic to your mission, understand your needs, and can articulate your case before their board, you will be well on your way to securing the funds you need.

Follow this up by doing great work for the foundation throughout the grant period, keeping communication open, and demonstrating success through a well-conceived evaluation strategy. You will then begin to earn the trust that forms the basis of strong, long-term relationships with funders. You may not receive funding every year, but by having a history of doing good work with proven results you will have established a record that may well prove invaluable. This is a good basis for all fundraising; finding funding for technology is no different.

In the best-case scenario, your organization would have already established a strong record of making an impact with your work. You or someone in your organization would have forged personal relationships with key individuals in foundations that have given you core support in the past. No matter what advice you may find in this or any other article, these strong relationships with existing funders will always be the best place to start. Give these contacts a call and tell them about the strategic direction you have planned for your organization. Let them know that you've done your homework and that technology will play a vital role in helping you work better, smarter, and more efficiently. Ask them to help your organization reach this next level.

Step 2

Incorporate technology into your annual strategic plan: Of course, your conversation with funders will be more effective if are able to trace your technology needs directly to your strategic plan. If you have not yet developed a technology plan as part of your strategic planning, stop reading this article, call your local technology assistance provider, and start one today. (You can also check out the Technology Planning section of TechSoup.) Just as funders want to know your project plan for program grants, they also want to know how you plan to use grants for technology.

By having a plan in place that articulates specific needs, identifies costs, and ties them to program initiatives that support your mission, you can accomplish two things at once. First, you demonstrate due diligence in your management practices to funders. Second, you ensure accuracy and consistency in all your grant proposals. This document serves as a kind of map for your development staff. Grant writers and development directors can pull appropriate budget amounts and deliverables directly from the technology plan for inclusion in grant requests. Since this cuts down on the amount of work and uncertainty required to include technology elements in each request, your organization can actually increase the number of grant proposals in which technology is included as part of the request.

Step 3

Focus on your mission and your programs, not technology for technology's sake: Always think of your mission and your program first. Whenever you talk about technology for technology's sake you undermine your chances of getting funding. IT staff (if you are fortunate enough to have any) often focus on the merits of one solution versus another, or on the nuts and bolts of specific system requirements. These are important considerations for choosing the right solution to do the job, but they are secondary to the discussion of whether or not it should be funded in the first place. Organizations seeking funds for technology must remain focused on one question: "How will this technology help us better achieve our mission?" Ask yourself what the benefits of this technology are. Will this new initiative or improvement result in new learning and knowledge-building? Will it improve project coordination or collaboration? Will it enable latent community energy to be put into action? Will it create new capabilities? Will it make your work more efficient or increase staff productivity? How will your clients' experience improve? Will it improve marketing and outreach? Will it increase fundraising? Will it enable you to make better-informed management decisions?

Step 4

Budget technology expenses as shared costs, not overhead: One of the biggest mistakes people often make when preparing technology grant proposals is to simply lump technology expenses with overhead costs. Nothing will jeopardize your chances of success more than this. There are, of course, many different opinions on what constitutes overhead and almost as many names for it -- ranging from "overhead" to "indirect expenses" to "administrative costs."

But technology expenses are best expressed as shared costs, also sometimes called "common costs." These are expenses that are shared among all of your programs to provide direct support to program staff. One way to think about them is to imagine what you would need to in order operate a given program as a stand-alone business. You would need office space, utilities, paper, pens, telephones, and technology -- computers, software, printers, and networks. Most funders worth their salt now accept that information technology is just another cost of doing business. They would no sooner expect an organization to produce the results they seek without the benefit of IT than without a floor to stand on.

Of course, no single program should bear the full burden of these costs, nor should any single grant or funder. Calculations will differ for each organization. But no matter what formula you use to determine appropriate percentages, using shared costs in your budgeting provides a way of allocating a fair share of the costs for common resources to each project that they make possible. Technology falls squarely in this category.

Not all funders will see it this way. Many government entities, in particular, place very precise definitions and limitations on overhead or shared costs that may effectively disqualify technology costs. Nonetheless, you should understand the justification both in terms of the direct benefits to providing program services and in terms of accounting principals. This knowledge will empower you to push back on unrealistic limits whenever possible. All a funder can do is say no, and as anyone in development will tell you, you'll never receive if you don't ask.

Step 5

Target technology funders: Finding the right funders to ask is often half the battle. Here are a few rules for targeting funders with technology requests:

Expand your searches to include "capacity building" as a search parameter when using foundation libraries and search engines. This term often indicates a willingness to invest in technology.

Many funders set aside a certain amount of funds for what are termed technical assistance grants. These can be used for many different kinds of activities. Often, they provide money for external consultants who bring you specific expertise that you lack in-house. Technical assistance grants are a great way to pay for technology consulting, technology planning, and even equipment.

Community foundations are often more likely than national foundations to fund technology needs. To be sure, there are many national foundations that invest in innovative applications of technology that serve the sector at regional or national levels. But most small- and medium-sized nonprofits will have better luck with their local community foundations. Such foundations generally consider building the capacity of the nonprofits in their local area an integral part of their mission.

The Foundation Center is far and away the best source of up-to-date information on grant makers in the U.S. With centers in Atlanta, Cleveland, New York, San Francisco, and Washington, D.C., The Foundation Center maintains libraries and training facilities where grant seekers can research potential grants and foundations and receive relevant training. They also have the most extensive online search directory available. The Foundation Directory Online is available by subscription and is an indispensable tool for anyone interested in targeting funders. It includes a foundation database and a grants database with customizable searches.

iWave is a private company that is a recent addition to the world of foundation research. iWave plans to compete with The Foundation Center with its Foundation Finder service, and its research outsourcing service. iWave functions on a subscription basis that also includes a limited amount of research that actual humans conduct on your behalf. The company doesn't have as much data as The Foundation Center, but it is sure to gain ground in the future and its research specialists can be a great help targeting the right technology funder or individual donors for you. The Foundation Finder uses a relational database that allows you to cross-reference searches across multiple tables, making for more effective searching.

The GrantStation does more than collect and warehouse data; the company researches funding sources by interacting directly with funders nationwide. Member nonprofits have access to the industry's most up-to-date contact information, an accurate understanding of corporate funding philosophies, and valuable information on the most effective way to work with each funder. They offer a basic subscription for $399 per year and a pro version for $599 per year. Limited numbers of free and discounted subscriptions are occasionally offered at TechSoup Stock.

Step 6

Maximize existing resources: Nonprofits are often adept at stretching limited resources. Let's be clear that we are not referring to what some call "the myth of make-do." Some organizations make the mistake of holding themselves back by "making do" with whatever they already have and not preparing for future growth. Stretching resources need not mean using outdated equipment and never upgrading or improving your services. A wise manager will stretch existing resources by properly maintaining the equipment the organization already has. This means doing regular backups, installing proper security software, keeping up-to-date with new software patches and virus definitions, and training staff to use the software to its maximum capability. Often, you can skip new purchases and instead focus on using the technology you already have more effectively. If you thoroughly understand what you have and what you really need, you can save money and get the most out of your technology.

Step 7

Use local community technology resources: It is estimated that there are anywhere from 15,000 to 75,000 community technology centers ( CTCs) throughout the U.S. Chances are there's one in your community. Many of these organizations are looking for ways to connect with other nonprofits in their area. Take the time to find out what the community technology resources are in your area, and find out what resources can be pooled with other local organizations. Maybe you don't need to reinvent the wheel in your organization.

Step 8

Partner with others for joint grant proposals: Once you begin learning about other groups in your area involved in community technology, consider collaborating with similar organizations. Perhaps you can find partners with whom you can share the costs of developing a community network or a common database that would be useful to anyone with a similar mission. A group of similar organizations requesting technology assistance may be far more compelling than one organization alone. This gives funders a way to stretch their dollars and have a greater impact.

Step 9

Generate unrestricted revenue where possible: Every nonprofit -- no matter what its budget -- should have plans in place to generate unrestricted revenue. This is revenue that does not have to be spent on pre-designated expenses in the way that some grants can only be applied to specific programs or activities. Unrestricted revenue offers the flexibility to apply funds where they are most needed or to cover expenses that don't often attract designated funding streams. Strategies to create unrestricted revenue can take many different forms. For example, your organization could generate earned income through fees for services, or individuals could donate to your general fund. Fundraising events, auctions, membership programs, direct mail, and direct e-mail can all help raise unrestricted revenue. If you find that you are having trouble raising funds specifically for technology, consider your technology expenses as a percentage of your general budget and adjust your fees, fundraising targets, and strategies accordingly.

Step 10

Spend less on software and equipment: The next best thing to raising new funds to acquire new equipment is to save money by spending less on each acquisition. Donated equipment will often save the most of all, but be certain that you've done a thorough tech plan and understand your current inventory, your future needs, and your minimum requirements. Knowing when to say no to inappropriate donations is as important as finding appropriate ones. Installing the wrong equipment will end up costing more in staff time, troubleshooting, and maintenance in the long run.

Refurbished equipment is another option. Find out more on TechSoup's Recycling and Reuse section.

Finally, I would be remiss if I didn't recommend product donation resources such as Gifts in Kind International, TechMarketplace, or our very own TechSoup Stock.

  • TechSoup Stock is the nonprofit source for technology donations such as office applications, networking equipment, fundraising software, accounting software, and other donated computer applications. TechSoup Stock offers hundreds of the most popular titles for as little as three percent of the suggested retail price. No technology grants are required.
  • Consistent Computer Bargains is a leading authorized reseller of computer software and hardware with a broad offering of name-brand, award-winning programs for nonprofit organizations. CCB is enthusiastically committed to supporting nonprofits exclusively.
  • Gifts in Kind offers everything from staplers to sporting goods. Though it does not specialize in technology products, it offers a good selection of deep discounts on technology products from a wide range of companies.
  • TechMarketplace is a project of the TechFoundation, an organization that provides discounted and donated hardware, software, and technology services to nonprofit organizations.

About the Author:

Bennett Grassano is Director of Institutional Development and Foundation Relations at CompuMentor.


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