How to secure essential technology funding to deliver on nonprofit missions
Learn why technology funding is increasingly vital for nonprofits, and get expert tips for how grantseekers can make the case to funders that investing in tools and systems will help them advance their mission-driven work.
The Technology Association of Grantmakers’ 2024 State of Philanthropy Tech Survey highlights both progress and ongoing challenges in how funders are supporting nonprofit technology needs. The report makes clear that, without more substantive investments in technology, the ability for nonprofits to deliver on their mission is increasingly at risk.
Smaller shares of grantmakers providing technology and tools, unrestricted funding
The good news is that a significant majority of funders are now committed to streamlining grant applications (67%) and reporting processes (56%). Furthermore, the shift toward paperless payments is becoming the norm, with 72% of funders adopting this practice.
However, troubling trends have emerged in two key areas: 1) The share of grantmakers providing technology and tools for nonprofits has decreased to 20%, from 23% in 2022; and 2) the share grantmakers willing to removing funding restrictions has also declined, to 30%, from 34% in 2022.
While these declines may reflect a return to “normal” from the surge in technology funding during the pandemic, in the era of AI and increased security risks, nonprofits need adequate technology resources more than ever. If these trends continue, we risk exacerbating existing inequities and undermining the capacity of nonprofits to fulfill their missions effectively. According to Salesforce’s Nonprofit Trend Report, “digitally mature nonprofits are 4x more likely than their peers to achieve their mission goals.”
Funding technology for equitable outcomes
Why should this matter to grantmakers?
NTEN’s Nonprofit Digital Investment Report notes 45% of nonprofits indicated they weren’t spending enough on technology, citing lack of budget (77%), lack of funder support (47%) and lack of donor support (38%).
According to the National Council of Nonprofits, 92% of nonprofits have annual budgets under $1 million, while the “typical” nonprofit is community-based, serving local needs. With small budgets come small staffs juggling multiple priorities. Outdated systems and inefficient processes are added burdens that make it harder to serve their communities.
So, when nonprofits are able to make technology investments, it directly impacts their mission. According to NTEN, program and service delivery effectiveness (96%), organizational capacity and growth (89%), and fundraising and financial stability (82%) were the areas nonprofits said technology investment most impacted their work.
The need for strategic and adequate technology investments is especially urgent for small grassroots organizations working to scale positive incomes in under-resourced communities. Therefore, decisions made regarding technology, the practices guiding its use, and the training provided can lead to either equitable or inequitable outcomes for those communities. And when funders provide support for technology, remove barriers to funding and/or provide more general operating funds, nonprofits can make operational investments that advance not only their mission but also the values and priorities of grantmakers.
Funding technology for greater impact, sustainability
Some funders are actively supporting the role technology plays in advancing mission and impact.
“We believe that by supporting nonprofits in areas like technology, we can help advance economic mobility through college access and completion, workforce and career development, and entrepreneurship,” says Donell Hammond, chief information technology officer at the Ewing Marion Kauffman Foundation. The foundation provides capacity-building grants, including investments in technology, as well as leadership and sustainability. “Our goal is to equip nonprofits with the tools and resources needed to become more effective and stable in the long term,” he says.
Fast Forward’s funding strategy is rooted in the belief that technology has the power to solve some of the world’s biggest problems—especially when harnessed by those close to the issue. Through its Accelerator program Fast Forward provides support for “tech nonprofits” developing technology solutions to critical social issues, including unrestricted funding and mentorship for changemakers. “The program has been an essential driver of both identifying and supporting future breakthrough organizations and developing a strong tech nonprofit sector,” says Sophie Owens, director of foundation partnerships.
Tips for applying for technology funding
We hear from funders that grantseekers should underscore how essential technology investments are for their mission and how critical they are to capacity building. Hammond recommends that grantseekers “demonstrate a strong connection between technology needs and the organization’s mission, particularly in how the investment will drive internal effectiveness, increase impact, and support sustainability.”
Owen urges grantseekers to demonstrate in concrete terms how technology funding will help increase impact: “Will new laptops allow your staff to provide better services in the community? Will a CRM system help you track your beneficiaries more effectively?” She also suggests they “use metrics to demonstrate the difference you make.”
Whether your organization is seeking general operating, capacity-building, or project-based support, it’s important to:
- Articulate impact: Clearly define how technology investments will enhance your organization’s mission and the specific outcomes you aim to achieve. Operating expenses are the costs of achieving your mission. Don’t focus on the specific technology tool or platform but emphasize what the technology can help the organization accomplish.
- Demonstrate need: Tie your request directly to the organization’s strategic plan and its capacity needs. Seek out capacity-building opportunities. Provide data and examples to illustrate the necessity of technology support, highlighting gaps in current capabilities or areas of risk.
- Tailor asks: Fundraising begins with building strong relationships. Understand the funder’s priorities and align your proposal accordingly, emphasizing how your technology needs match their strategic goals. Directly connect the request back to your mission and how it aligns with the grantmaker’s strategic priorities.
By focusing on these three approaches, nonprofits can strengthen their applications and better position themselves to secure funding for technology.
Photo credit: Courtesy of Technology Association of Grantmakers
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