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Investment hurdles

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Funding for nonprofit technology remains elusive.

By Todd Cohen

Getting and paying for technology still poses a challenge for nonprofits, experts say.

Funding actually has declined for technology, according to The Foundation Center in New York City.

Grants for computer systems and technology fell 30 percent in 2003, the most recent year for which data were available, from more than $94.5 million in 1999, while grants for electronic media and online services fell nearly 6 percent from nearly $140 million in 1999.

While grants and donation programs have put more software in the hands of nonprofits, acquiring hardware still is a big challenge, says Daniel Ben-Horin, founder and president of San Francisco-based CompuMentor, the leading distributor of donated technology.

Funders might be more willing to support technology through matching grants that create an incentive for nonprofits to set aside funds each year to help cover the cost of maintaining and replacing their technology, says Chris Jenkins, vice president for program and product development at the Nonprofit Finance Fund, a New York City-based loan fund and financial advisory service for nonprofits.

Such a plan might work like a 401k retirement plan or a matching-grant program the Nonprofit Finance Fund designed for a foundation making capital grants for buildings.

“Technology is a short-lived asset with very high carrying costs,” he says. “And it represents an increasing percentage of many nonprofits’ operating budget.”
Nonprofits “should be putting money aside to be able to replace equipment when it runs out or gets old,” he says. “It’s not overhead. It’s an essential part of doing business.”

Ben-Horin says paying for technology, including training, upkeep and replacement, is a long-term undertaking akin to a capital campaign.

“You’d only start if you knew you could finish it,” he says.

Ultimately, making more effective and strategic use of technology will depend on leadership, says Kathleen Enright, executive director of Grantmakers for Effective Organizations in Washington, D.C.

“If you don’t have the right leadership in place, strong and deep, both board and staff, you’re going to have to refix a lot of the technical and managerial systems over and over again for the organization to remain strong,” she says. “Leadership development is emerging as the next frontier in capacity-building that funders are going to be really serious about.”

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