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Changing Policy and Philanthropy




Jan 17, 2001


Jonathan Peizer

Ahhhh.... if it were only that easy... You'd think foundations after 40-50 years would be convinced right? This issue didn't just crop up in the digital age, it's been a chronic problem across all program areas for years. The difference now is that technology, which has been a back office function historically, has now moved to the front office and needs to be perceived much differently by both the grantor and grantee.

Foundation boards want to see results and their money working to "fix problems" -- that happens through mission-driven programs, not through helping to fund the "back office" admin. expenses and overhead which may or may not be efficiently run. It's not sexy, it's difficult to track and justify, and it doesn't necessarily meet the mission of the particular foundation program funding it -- unless that program is about funding organizational "capacity building" which a few do. So it is often relegated to that magical catch-all category one sees in most proposals called "overhead."

Overhead is a bad thing which must be contained usually to a specific percentage of the total proposal depending on the funder. So how does one accomplish innovation when technology is relegated to this category? How does one justify the expense of technologists?

How do you convince foundations that this is important when many use the technology just as poorly as the not-for-profits? Remember many traditional foundations have large endowments and give away money for a living -- not much incentive to be efficient there I am afraid. In fact I'd make the case that many foundations found themselves in the exact opposite situation as most corporations throughout the 90's. In the late 80's commercial entities understood they needed to compete more productively or perish, so they reorganized and restructured -- and the foundations and their stock invested portfolios benefited -- hugely -- throughout the 90's. And you know what? They didn't have to do a thing to change..... What was shaking the traditional philanthropic tree was the rise of .com millionaires and what they might do philanthropically. Possible irrelevance has gotten some traditional philanthropic institutions thinking about technology. However, the .com crash I fear may direct them into complacency once more.

I am a technology operations guy that went program. Do you know how many foundation technology get togethers I attend about IT, the Internet and the Digital Divide represented by other foundations who do not have or do not send their own technology literate people to the meeting? If it was an education or health conference, you can bet that each foundation would be represented by an expert in that field.

So I think the idea that Foundations should wake up and "get it" is a nice idea, but not necessarily practical in the short or mid-term. The best way to do this (from a guy who works at one and who vets proposals for a living) is to wrap some of the technology needs into mission driven proposals.

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