Technology’s Role In Reducing Funding Barriers For The Nonprofit Sector
Sevetri Wilson is Founder and CEO of Resilia – revolutionizing how nonprofits are created and maintained, and how enterprises scale impact.
For every headline we read about an instance of police brutality, we read 10 more about the gross inequities at every major institution in the U.S. Wall Street? Naturally. Hollywood? Check. Mainstream media? You bet. Higher education? Sad, but true.
But the nonprofit sector — which has taken on greater responsibility in our cities, particularly when it comes to the provision of services for historically marginalized communities — should be immune to gender and racial discrimination, shouldn’t it? Surely cities and other grantors offer equality of opportunity as they distribute resources, considering the vital role nonprofits play in addressing the systemic factors that lead to inequality.
In fact, there are significant disparities in funding for nonprofits led by people of color. According to a 2020 study published by The Bridgespan Group and Echoing Green, BIPOC-led nonprofits receive an average of 24% lower revenues and have access to 76% less unrestricted net assets. Not only do BIPOC-led nonprofits have fewer resources to work with in the first place, but they also can’t access resources on an ongoing basis to address any crises or changing conditions that may arise.
It’s clearly time to shift our collective thinking about what it means to be a society that provides equal opportunity. As a black female tech founder serving the nonprofit sector, I don’t expect my experiences and outcomes to be exactly the same as my white male and female peers. What I expected when I started my company and raised venture capital was that doors would be open for me to walk through. I knew it was up to me. What I shouldn’t have to deal with is the need for back channels, a secret network of white, Ivy League-educated classmates or twice as much proof of my capabilities in order to cross the threshold. Yet, the latter is the reality for most black founders or leaders — both in the for-profit and nonprofit sectors.
Using the nonprofit sector as a proxy (and it’s a fair one, as the sector accounts for 5.6% of U.S. GDP and more than 12% of the workforce), it’s a good time to step back and look at the role technology plays in crossing these divides. At a time when nonprofits are working to address major issues like Covid-19 and racial injustice, technology is necessary for leveling the playing field and ensuring that equity exists for organizations of all shapes, colors and sizes.
Grantors that are preparing to deploy capital should ask themselves this question: Are we doing our best to create an equitable capital allocation process? It’s important to look for technology solutions that can alleviate barriers to entry for nonprofits, but education is a crucial part of this process. For example, organizations often think (incorrectly) they lack access to the resources that can help them track and report outcomes. A recent report conducted by BDO and The Nonprofit Times found that the top three reporting challenges cited by nonprofits are no consistent framework for collecting and sharing data, a lack of human resources and the inability to gather information on the impact of programs.
This is why part of the mandate for grantors should be to identify these types of nonprofits (often led by community organizers from underrepresented groups or people of color) and equip them with the right technology so they can begin to track important benchmarks. Will this take extra effort on behalf of the grantor? Yes. But holding a nonprofit accountable for outcomes, much like you would a for-profit company, is the first step in generating lasting impact.
The goal of any program is to secure positive outcomes and sometimes neutralize or alleviate the undesirable ones, but without accurate data, these outcomes are impossible to track. Since evidence of effectiveness is required for obtaining grants and funding, this must be the primary focus for nonprofits. Digital tools will allow them to rigorously track and report outcomes, communicate with grantors and ultimately secure funding. The collection of concrete data is a way to eliminate bias in the distribution of resources. When grantors can see objective measures that demonstrate an organization’s effectiveness, they will be more inclined to support it. Full stop.
Digital platforms can offer transparency on both sides, engender trust and build connective tissue within what often feels like a hierarchical and systematically biased system. While technology can’t solve every problem, its existence alone is proof of progress. When we choose to use it for the greater good — in this case, to help update worn out systems that don’t provide equity in the process of securing nonprofit funding, which leads to worse outcomes for organizations and communities alike — we can at least know we’re moving in the right direction. Perhaps this will lead to a future in which BIPOC-led nonprofits have taken enough steps to finally walk through the door.
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