Changing Policy and Philanthropy

Below is a summary of key points made by participants in an online discussion hosted by the Morino Institute from November 2000 to April 2001 — with links to the full text of selected messages ("posts"). More information...

"[We should] engage foundations in a review of their fundamental operating assumptions, and persuade them of the likelihood that their work will, in the long run, engender more social value if they use their grants to invest in strengthening (and perhaps even growing) the core capacities of worthy organizations."
— David Hunter, Edna McConnell Clark Foundation

Technology is but one tool among many. When used effectively, it can have a profound effect on an organization's ability to assist people.

Unfortunately, in today's funding and policy environment, few incentives and many disincentives together discourage nonprofits from risking a more expanded use of technology.

Changes in philanthropy

Community-based organizations that wish to improve their internal operations or external outreach often face the same problem — the lack of funding for technology initiatives. Without adequate funds, even well-run community groups are unable to integrate and innovate with technology. Almost inevitably, the lack of funds limits the potential of organizations that wish to expand their reach and the quality of service they provide to people in the community.

Jonathan Peizer of the Open Society Institute observed that most foundations that provide funding to nonprofit service groups are set up to support mission-driven programs rather than technological expenses and overhead. "[Technology is] not sexy, it's difficult to track and justify, and it doesn't necessarily meet the mission of the particular foundation program funding it... So it is often relegated to that magical catch-all category one sees in most proposals called 'overhead.'"

Rather than "overhead," some organizations prefer to think of technology as part of an organization's "core capacity" — the strengths and characteristics that allow it to operate well. David Hunter of the Edna McConnell Clark Foundation, for example, takes a long view of the current funding environment: "As someone who works at a foundation that is redesigning its operations in order to become an effective investor in nonprofit core capacity building, I can say that it is worth trying to nudge along the field of philanthropy. In my travels I do see other foundations trying to change the ways in which they work, and certainly investing in organizational effectiveness is on many folks' minds."

Tracy Gray, vice president for youth services at the Morino Institute, provided specific examples of philanthropic change. She noted that Digital Partners has been helping the United Nations explore the possibility of creating several large venture philanthropy funds that will provide millions of dollars in financial support and management assistance for nonprofit technology initiatives.

She acknowledged, however, that this example is the exception to the rule. The vast majority of foundation grants do not encourage the use of funds for building an organization's technological capacity.

Changes in public policy

Even widespread changes in philanthropy would pale in comparison to the dramatic impact that changes in public policy could have on low-income communities.

As a point of comparison, Tracy Gray noted the massive efforts of the Rural Electric Administration, which brought electricity to millions of citizens in rural areas like the Tennessee Valley. In contrast, the full weight of government is not similarly behind current efforts to eliminate contemporary barriers to opportunity. As Michael Margolis of CitySkills pointed out, such redirection of public resources would require "resetting expectations across the sector for what's possible, not to mention reframing the public will and consciousness."

Current government programs that focus on technology in underserved communities include the US Department of Education's $200 million 21st Century Community Learning Center program as well as the $42.5 million Technology Opportunities Program of the US Department of Commerce. A draft paper by Tracy Gray and Elliot Maxwell, senior fellow at the Aspen Institute, proposed a governmental approach that is less "silo-like" with respect to technology initiatives and more broad based in execution.

In Portland, Oregon, for example, a publicly accessible social services database provides citizens with information on housing, childcare, bus transportation, and job training. The database was funded not by one agency but several that cross federal, state, and local lines.

Tracy Gray noted that even current government research and program activities offer opportunities to use technology to provide better service. Research on a particular health issue, for example, could include an outreach component that uses technology to disseminate information widely and inexpensively; a government facility that gains broadband access could allow community members to use the facility as part of after-hours training.

The participants discussed other ways in which public policy can benefit low-income communities, including the following approaches:

• Offering tax incentives that encourage new economy companies to locate in and hire from low-income communities

• Coordinating local, state, and national efforts regarding technology

  Nancy Green of the Markle Foundation said, "There needs to be symmetry between local and national public policy efforts as the magnitude of such issues as broadband deployment makes it unlikely that they can get resolved exclusively at one level or the other."

• Developing new sources of revenue through requirements for community reinvestment or merger reviews

  "The creation of incentives... whether through merger reviews (like AOL/TimeWarner, or the PacBell-SBC Communications merger that led to the creation of the $50 million Community Technology Foundation of California) or through tax or other incentives is vital," said Nancy Green. She suggested that "future research efforts might focus in part on... how [community-based organizations] can leverage their work, reach, and reputations in the community to help create viable corporate opportunity."

Changes in public opinion

Many of the online participants noted that "the public will" to strengthen low-income communities is simply nonexistent. Phyllis Meadows of the W.K. Kellogg Foundation observed, "The toughest question: Is society ready to concede to the notion that we are creating a new underclass? Is this a sufficient motivator for change within society at large?"

Marsha Reeves Jews of Advanced Educational Solutions concurred: "The reality is that, we as a nation, really have to make a serious commitment that we are truly interested in all people having the information, the access, and the tools... that we want to narrow, if not close, this divide... and, it is really by any means necessary."

Mario Morino of the Morino Institute noted that currently no single, strong voice influences the public will or speaks on behalf of low-income residents in the same way that, for example, the Children's Defense Fund represents children's issues to elected officials, policymakers, and foundations. As a result, he added, "the interests of low-income communities are not well represented in the lobbying and influencing that operates behind the scenes of government process."

The online participants discussed a number of ways to "magnify the voices of the poor" and gain support for significant, outcome-oriented interventions in low-income communities, including the following:

• Unify the disparate digital divide and community-change efforts into a collective movement that works toward significant structural improvements in low-income communities.

• Provide regular information on best practices in low-income communities through a university, foundation, or public policy center.

  Andrea Schorr of the Fund for the City of New York pointed out that "the lack of information on efforts that are actually helping people move into higher education, employment, better health, and improved relationships perpetuates the perception that there is a lack of good models. One of the most important roles that intermediaries can perform is to help investors, policy makers, and communities at large discern quality and effectiveness in services."

• Develop a strong advocacy and lobbying effort that influences think tanks, policymakers, and elected officials about the concerns and issues (technological or otherwise) of low-income individuals and families.

  Michael Potashnik of E-Learning Associates commented, "I suspect that the majority of civil society or people's organizations representing the interests of the poor are themselves not very well-prepared or effectively coordinated for lobbying on these issues. Especially those who are working at the grassroots level and have made the effort to learn about the needs of the low-income communities. Encouraging, supporting, rallying these groups could make a difference."

• Sponsor a major public awareness campaign to influence the public's understanding of the depth and breadth of issues that face low-income residents.

The key to developing philanthropic and public policies that strengthen low-income communities is a more unified voice, one that is heard from both within and without the communities.

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