Investing in Digital Infrastructure: A Roadmap for Funders

Digital Impact 4Q4: Chantal Forster on Investing in Technology for the Social Sector

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00:00 CHRIS DELATORRE: This is Digital Impact 4Q4, I’m Chris Delatorre. Today’s four questions are for Chantal Forster, Executive Director of the Technology Association of Grantmakers, or TAG. A new guide from TAG, NetHope, NTEN, and TechSoup looks at how nonprofit professionals can invest in what it describes as three core elements of digital infrastructure.

00:30 CHRIS DELATORRE: Chantal, let’s first demystify this idea of digital infrastructure. What exactly does it mean, what does it mean for funders specifically, and why is it so important for the social sector?

00:46 CHANTAL FORSTER: You know, it feels rather invisible, doesn’t it? Digital infrastructure, if we don’t see it, how vital is this thing that we call digital infrastructure, right? But, you know, imagine this, you’re driving to work, if you do drive into work, if you haven’t done that in a while. But if you do, you’ll hardly even notice the road that you’re on. That road literally becomes almost invisible, right, and invisible part of our everyday lives upon which we’re totally reliant. You just don’t even think about it until it becomes riddled with potholes or too small to support the local population. I think about digital infrastructure in the same way. Our modern lives are completely dependent upon it for education, for business, for a thousand personal uses. And yes, for also nearly every element of how a nonprofit operates, fundraises, provides its services. And Chris, you know, we barely even pause to consider that until something goes wrong, until this pandemic hit and payments to the nonprofits can’t go out the door because a funder is still cutting paper checks. So, digital infrastructure is around us. We rely on it entirely, and yet, we don’t even realize that until something goes wrong.

There is, you know — and I think there’s a very important cautionary note about when something like digital infrastructure goes wrong, right, or falls apart. Michael Brennan, he’s a program officer with technology and society with the Ford Foundation. He wrote a really great publication a while back and mentioned, and this is a quote from Michael: “If digital infrastructure fails, the consequences will be the same as when physical infrastructure failed — falls apart. People with privilege and resources will find other ways to navigate the world, while those on the margins bear the brunt through higher costs, decreased access and a related lack of opportunity.” So, that gets to the heart of an equity issue about digital infrastructure. That’s really important for us to realize and many of us have already seen this with inequitable access to education, for example. So, we, you know, we’re at a very important moment of recognizing and awareness of our dependency on something that we’re calling digital infrastructure in this report.

What is digital infrastructure? When you get into, when you recognize it’s there and you see it, what is it? You know, grantmakers that I represent through the Technology Association of Grantmakers have started realizing that that social change in the digital era requires an investment in technology. And it’s not just the tools, it’s tools and technology, it is digital skills and capacity, it is data-sharing platforms, it’s responsible data practices. It is the resourcing models to support these things—tools, tech capacity building programs, data sharing collaboratives, reporting platforms—however, we’re going to resource that. So digital infrastructure is also figuring out what’s the resourcing model for this. It’s also providing access to reliably connect to the internet at sustainable cost, regardless of one’s location globally. And then lastly, it is also a policy and regulatory framework regarding rights and equitable access to digital infrastructure.

Courtesy TAG

So, that’s six things at a minimum for digital infrastructure: Tools & Technology for the social sector to support its operations and its mission, and then [Access to] collaborate across organizations, across funders. So, the tools and tech, the Skills and capacity building to leverage those tools and tech. Data—sharing frameworks, collaboratives, reporting platforms (that’s the third), Resourcing Models to support access to the Internet in an equitable and reliable fashion. And then lastly, policy and regulatory frameworks for Rights & Equity as part of that digital infrastructure.

How do we do this, right? And I think that’s the last piece. We talked about the what is digital infrastructure. And then there’s the how do we make that happen? I — we can’t — we don’t have the time to do a complete roadmap or blueprint for this. But that several organizations are working on this.

But how do we deliver on digital infrastructure? One thing I want to note is that cross sector partnership is vital. This includes social sector partners, public sector partners, and yes, private sector partners. There’s a role for open source platforms here as well. I’ve personally lived the benefits of open source software when I ran the digital team for the mayor of Albuquerque, New Mexico years ago, limited budgets in local government. And so, we ended up developing an open source collective between other local and state institutions to share a platform and co-develop shared solutions on that platform. In the long term, there are some challenges to maintain these systems. But the cost savings is extraordinary. And it is something that then becomes built by the community. So, to me, a comprehensive and lasting form of digital infrastructure includes various forms of partnership between public, social, and private sectors.

06:28 CHRIS DELATORRE: In the funding report, you talk about tech underinvestment for both funders themselves as well as their grantees. Why is this the case?

06:39 CHANTAL FORSTER: Oh, that’s an interesting one, Chris. You know, there are undoubtedly several factors at play here. We can talk about just a few reasons. I think, firstly, if you think about the mission-driven nature of the social sector and the people who make decisions, shaping, and driving this mission, historically, there have been fewer people comfortable with technology, let alone familiar with really the strategic potential of tech. Not just plugging in a tool here or there but the strategic potential of tech to scale their missions. So, I’ve been intrigued to see how new philanthropy is entering this space, and changing the way that many funders think about the role of tech. Some of our new — new philanthropy funders, their benefactors are extremely tech savvy. They started some of the Silicon Valley firms and so, they’re looking at the role of tech to support the mission of philanthropy and the mission of their nonprofits in entirely new ways.

Another factor on the nonprofit side, and why we’ve seen an under investment is, you know, is that they can’t avoid talking about the overhead myth. And the fact that historically, tech was considered overhead or an indirect cost, and therefore investment in tech—baseline investment, let alone innovative investment—was limited to a portion of the nonprofit’s budget. That is, that’s so small, so small as to barely even equip the org. Let alone innovate, innovate the mission. It will be leveraged for innovation of the mission.

So, we had a real watershed moment in 2019, and that was the work of Ford, Hewlett, MacArthur, Open Society, and Packard Foundations. You probably recall this, right, when they committed together to funding overhead, so-called overhead, at much higher rates. But I think, you know, enter the pandemic, and we are seeing a shift at TAG, the Technology Association of Grantmakers. I’m starting to see that funders themselves have realized their own dependency on tech through the sudden reliance on remote work. The numerous calls from their nonprofit partners and grantees who may need tech or training. Additionally, just the reliance on paperless systems. We’re seeing funders really recognize that tech is a vital part of not just their operations, but their mission and certainly their nonprofit’s operations and mission as well.

09:18 CHRIS DELATORRE: Something our listeners might ask is, how is this need different between funders and grantees? What would adequate or even strategic investment look like?

09:35 CHANTAL FORSTER: Earlier, I alluded to the fact that funders have under invested in tech historically, and are now shifting as a result of the pandemic. While this was anecdotal data when we first published the funder Skype report—and by we, I mean TAG in partnership with NetHope, TechSoup, and NTEN—when we published the funder support, the funding report for digital infrastructure, that was anecdotal data around how funders were starting to think about tech differently. But I now have some real data for you, some quantitative data from the 2020 State of Philanthropy Tech Survey, which TAG just wrapped up. We’ll be launching soon.

We are now seeing funders as a result of the pandemic increase their own tech budgets. So, here’s some data for you: 51% of the foundations—and we had 233 foundations respond throughout North America, as well as a few foundations in the EU—51% of those foundations who responded said that their IT budgets will moderately or significantly increase in 2021. So, 51% of foundations have realized in a year like 2020 that perhaps technology is a strategic linchpin of their operations, but also of their mission. And so, that’s a very important moment. And I predict that recognizing their own dependency on technology will invariably cause funders to increase funding, and provide tools and capacity for nonprofits as well. In fact, I’m already seeing that.

Again, from the state of philanthropy tech survey, we’re seeing this shift underway as well. We had a question that asks respondents in what new ways has your organization supported grantees and nonprofit partners in response to society’s challenges in 2020? So, new ways that funders were supporting grantees and nonprofits. There were, some of the leading answers were streamlining applications—61% were streaming applications. Fifty-one percent were moving to paperless payments, 47% streamlining reporting, 41% removing funding restrictions. But here’s what’s interesting. When we talk about thinking differently about tech for nonprofits, 28% of funders said they were now providing training and technical assistance directly to their nonprofit partners’ grantees. Twenty-two percent said they were actually providing tech and tools. There’s a foundation in San Francisco that provided Zoom licenses and Slack licenses to every single one of their grantees on very short notice so that those nonprofits could continue their operations in a fully remote fashion. So, that is brand new. And I suspect that we will see funders think about their nonprofits’ tech needs—a greater recognition of them, so yes, thinking about them, but also thinking about supporting them in entirely new ways.

So, I believe we have a real watershed moment. A watershed moment when civil society realizes it operates in a digital era and invents new ways of partnering outside the sector and with nonprofits in the sector. New ways of partnering to leverage this digital reality to support the mission.

13:25 CHRIS DELATORRE: Assuming it’s safe to say that every organization is in a different place when it comes to capacity for technology—tools and skills, for instance—how can funding or support strategies consider not only differences in digital maturity across organizations, but also the collective needs of the sector as a whole?

13:50 CHANTAL FORSTER: You know this — Chris, the pandemic was an extraordinary moment of recognition. And I think one of the big takeaways for the social sector was that the baseline of digital readiness is lower than we all realized. There was a study by TechSoup that we talked about in the funder — in the funding roadmap, in the funders’ guide, that talked about nonprofits of all sizes, reported a variety of needs, a lack of skills to understand options and make technology decisions, a lack of access to trainers or consultants who understand the sector, a lack of support or prioritization for tech from their own board of directors. Aging hardware, concerns about data management, and specifically in regards to regulations and their own security, and privacy for that data.

So, these needs, of course, vary by the type of org, the size of org, the geography in which that org operates. But there’s a real invitation here for funders to recognize that investment in a nonprofit’s mission also requires an investment in digital access and tools and skills.

So, as part of that report, NetHope, TechSoup, NTEN, and TAG, whom I represent, invited funders to consider three things. To really be bold. This is a moment. This is a catalytic moment. And be bold and considering new funding approaches. Providing tools, tech, unrestricted giving, right, so that indirect costs can be covered. so that a nonprofit can make choices about when to invest strategically in technology or to innovate with technology. Number two—this is really important. Oftentimes, funders who are providing, including a line item for funding for tech, perhaps don’t realize that nonprofits actually need access to expertise. So, number two is we invite funders to also provide access to expertise. This is the result of a survey that NTEN has conducted for 15 years, I believe. And that survey shows that nonprofit staff report often having the tools they need, but not the training on how to use them well. So, it’s not just the tools and tech, but it is access to training, to expertise, to strategic expertise as well. And then thirdly, to recognize — we invite funders to recognize that investing in digital infrastructure for nonprofits. It’s not a one and done, right? That digital maturity requires ongoing learning and support, and really is a relationship between the funder and the nonprofit whose mission they’ve chosen to invest in.

There’s an important way that funders can go about assessing where nonprofits are. And I think that I want to share an example. NetHope and NTEN both provide digital maturity assessments that funders can use to assess themselves—it’s always good to look internally as well—and then leverage that digital maturity assessment, work with their grantees to assess themselves, and then meet them where they are in terms of the funding expertise and a longer-term commitment to their maturity. This is an approach that everyone from the smallest family office to a midsize community foundation or even a large private independent foundation can take. I’m really proud of the several TAG members such as the Pierce Family Foundation here in Chicago or the Northwest Area Foundation in Minneapolis who are already using such assessments with their nonprofits to help them reflect together and then invest in the tool’s tech and capacity and training that they may need.

So, there’s a — we’re talking about a real groundswell, Chris. There’s a real groundswell of recognition that civil society in the digital era means. Shared investment is in tech is not an afterthought. In fact, as we speak, I’m leading a task force on digital infrastructure to catalyze this investment. It’s just a six-month task force. For the next six months TAG is convening funders, tech and data providers, as well as orgs representing nonprofit tech—NetHope, NTEN, TechSoup—to align the variety of efforts underway, and catalyze action and investment in this work. There’s a real call to action right now. And, you know, it’s an honor to work hard on building back better together.

There’s a quote I want to share from a key member of that task force—John Mohr, who’s the CIO at the MacArthur Foundation. He, when talking about this with me, this being the need for investment in civil society, digital infrastructure for civil society, John Mohr, the CIO at the MacArthur Foundation says, “We are at an exceptional time. All foundations are being called to action and have an obligation to deliver and respond to the needs of the world. Investing in shared platforms and integrated solutions, to reduce the burden on grantees is not only a call, but also an obligation.”

You are welcome to access the report at tagtech.org. And the report is included right there on the front page. You are also welcome to find us on Twitter @tagtechorg. And then you’re welcome to follow me on Twitter as well @cocoforster, that is C-O-C-O F-O-R-S-T-E-R. Thank you so much for having me, Chris. It is a real honor and a pleasure to be taking advantage and catalyzing this moment that we find ourselves in to invest very deeply in the work of civil society.

20:16 CHRIS DELATORRE: Chantal Forster, Executive Director of the Technology Association of Grantmakers, thank you.

Digital Impact is a program of the Digital Civil Society Lab at the Stanford Center on Philanthropy and Civil Society. Follow this and other episodes at digitalimpact.io and on Twitter @dgtlimpact with #4Q4Data.