Posted on December 28, 2012

Tech Innovation Increasingly Seen as Driver of Nonprofit Impact

Google's announcement earlier this month of grants totaling $23 million to spur innovation in the nonprofit sector is illustrative of a new kind of funder who sees technology as an instrument for social change, the Associated Press reports.

Although few funders in the past have made it a point to support technology-driven innovation among nonprofits, a growing number of foundations and individual donors, many of whom made their fortunes in the tech sector, say they can get more bang for their buck, and do more good, by funding nonprofits that are using technology to multiply their impact. Through its new Global Impact Awards program, for example, Google awarded $5 million to charity: water, a nonprofit started by New York City-based event promoter Scott Harrison in 2006, to develop remote sensor technology that allows the organization to monitor, in real-time, water flow at each of its project sites. That capability, in turn, enables the organization to determine which projects are sustainable, raise more money for the ongoing maintenance of existing projects, and, through data sharing, empower its partners in developing countries.

Jacquelline Fuller, Google's director of charitable giving, said that even though new technologies come with risk and may not live up to their potential, the company decided it could have a more "transformational impact" by funding innovation in the nonprofit tech space rather than through support for specific issue areas or existing projects. "Informed risk is something Google understands," said Fuller. "There's actually very few dollars available that's truly risk capital, lenders willing to take informed risk to help back some of these new technologies and innovations that may not pan out."

Indeed, the willingness to embrace risk and fund ideas rather than existing projects turns traditional notions of philanthropy on its head, said Matt Bannick, managing partner of Omidyar Network. "Rather than looking for organizations that could do this specific work that we're hoping to get accomplished," he said, "let's look for fabulous entrepreneurs...[who] have a new and innovative idea that we can get behind."