Community funds plug in

By Todd Cohen

Big U.S. community foundations are pooling up to $4 million to develop Web-based technology that all community foundations can use.

By joining forces to develop shared technology, the foundations aim to make it easier to work with tech vendors and financial institutions, and to boost their own donor services, expand their investment options, strengthen their marketing, improve their financial reporting and better measure their impact.

“This is an effort to pull the field together to do joint investment in technology in an organized way that gets the field the functionality that it really needs to succeed,” says Sid Hartman, vice president of finance and administration for the Marin Community Foundation just north of San Francisco.

Spearheaded by Community Foundations of America in Louisville, Ky., and the Community Foundation Leadership Team of the Council on Foundations in Washington, D.C., 25 foundations formed a Technology Steering Committee in 2002 to raise money and oversee technology development for the community foundation field.

The effort had raised $3.3 million from 33 of the biggest community foundations through April, and expected to reach its $4 million goal by June, says Hartman, the steering committee chair.

Working with vendors, the committee aims to develop new applications and functions that community foundations can add to their existing technology, while also developing new systems that can be expanded easily.

“The field has not spoken with one voice to our vendors up to this point, and so vendors have been getting mixed messages,” Hartman says.

The tech initiative will focus on developing community foundations’ core systems, Web presence and accountability tools.

“Today’s reality is that the community foundation field finds itself at a significant and growing competitive disadvantage versus financial institutions offering charitable products,” says a steering committee proposal calling for a funding syndicate to support the tech initiative.

“These competitors have already invested and will continue to invest heavily in computing and software technology,” the proposal says.

It says a “technology gap” limits community foundations’ ability to serve donors, keeps foundations from teaming productively with competitors, makes it costly to retool existing technology and “throttles” foundations’ ability to make cost-effective tech investments to stay competitive in meeting new needs.

The initiative will invest 85 percent of the pooled funds in “core systems” that manage information on donors and prospects, and handle accounting and grants processing and reporting.

Community foundations, for example, have limited technology to connect information in their databases with groups that need it, including staff, donors, professional advisors and nonprofits, the proposal says.

It says foundations also need “customer relationship management” systems; “seamless” processing capacity that, for example, can link accounting systems to investment managers, brokers, banks and custodians; and “next-generation” software to replace current systems.

Another 10 percent of the pooled funds will be used to promote the use of accountability tools and searchable nonprofit data to help community foundations better assess the impact of grants and the effectiveness of grant recipients, and communicate that information to constituents.

The remaining 5 percent of the pooled funds will be used to promote the use of better Web presence by community foundations and help “deliver interfaces, branding, dynamic content and interactivity to key constituents.”

Carla Dearing, CEO of Community Foundations of America, says the steering committee wants to develop “open” and “shared” technology architecture for the community foundation field.

The goal is to make it easy for different pieces of software, such as accounting and grantmaking programs developed by different vendors on different platforms, to talk to one another, she said, and to make available to all community foundations any upgrades or new applications developed in response to emerging market needs.

That approach builds on CFA’s own efforts to develop back-office, Web and impact-tracking technology on a shared platform that provides automatic upgrades as soon as new features are developed.

More than two-dozen community foundations already use shared platforms developed by CFA.

“After two-and-a-half years,” Dearing says, “we’ve convinced people that’s how it can work.”

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