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Is grant-making fit for the digital future?

As pretty much everyone has noticed, we’re in the middle of a great revolution driven by digital technology and the internet. It permeates almost every aspect of our lives—as consumers, citizens, friends, communities, donors and workers.

And while the charity sector, and those that fund and support it, are somewhat lagging in embracing new technology, there’s no doubt that the revolution’s on its way. In the words of William Gibson, ‘the future’s already here—it’s just not evenly distributed yet’.

But what should grant-making trusts and foundations make of this coming digital revolution?

There are huge questions to grapple with. How to support human rights in an age where personal data is owned by the tech giants and monetised remorselessly? How to keep abreast of developments in technology to be able to make good decisions about funding that involves tech? How to think about funding in the context of products and solutions that can easily be reused and shared, unlike services delivered by people or using physical assets?

And in particular, how should they fund it if they want to be as effective as possible in supporting those trying to bring social benefit to people through technology? I believe that answering that question well may spark the greatest disruption in grant-makers’ practices that we’ve ever seen. Because their existing approaches just don’t work for technology.

Here are just a few of the reasons why tech could be so disruptive to current funding practices:

Applications ask for certainty about what we’ll do
But we know that tech development is iterative. It uses continual learning and adaption to develop better products as we see how users interact with prototypes.

Applications ask for clarity about who we’ll work with
But often tech products work best for user segments we hadn’t identified as our target user group initially.

Reporting asks for progress against initial outcomes
But if we’re learning and adapting as we go, what we’ll want to report on after a year may bear no relation to what we’d have said at the start.

Reporting encourages a focus on successes
But to learn we need to fail. Often, and quickly. If we don’t, we’ll deliver products that no one wants, and no one uses.

Grants are inflexible in their amounts and timescales
But tech development requires funding at different scales as products iterate, develop and are adopted. And it requires funding over timescales that can be hard to predict.

Grants fund individual organisations
But tech products can be reused with no or limited marginal cost. And therefore should be reused when they’re developed by social purpose organisations, whose purpose is public benefit.

Grant decisions are made or overseen by quarterly board meetings
But tech moves fast, and requires rapid responses to learning and failure. We’d struggle to pivot when we find a new insight into how our product works best, if our resources are on a three month delay. It’s like driving a Mars rover from Earth—dangerous.

Of course I’m generalising about standard grant-making practice—there are many exceptions. But ultimately, where these challenges do exist, they are not insurmountable.

Far from it—and some of those working in the field have already shared lessons and insights from their own work about how to fund digital technology. For example, Learning from the Labs: How to fund and deliver social tech for charities and social enterprises is full of valuable suggestions and recommendations.

But responding to the challenges will not result in grant-making processes that look just incrementally different. They’ll be radically different.

Some funders will find that they can run their own tech-friendly processes, based on adaptive and agile approaches that allow for uncertainty, adaptation, learning, and sharing. And some will even find that they can adapt their governance structures and processes to deliver the agility that’s required.

But many will find that such a radical overhaul cannot be undertaken on their own. I believe ultimately that will lead us to many more collaborative funding ventures than we see today—like the Paul Hamlyn Foundation partnering with Comic Relief on their tech for good programme.

Ultimately, we would like to see the opportunities for technology being identified at a sector level, not just project by project and organisation by organisation. Funders are in a great position to help make that happen.

A version of this article originally appeared in Alliance Magazine. NPC readers are eligible for a 20% discount on new digital and print subscriptions to Alliance Magazine. Simply enter npc-20 at the checkout to claim your discount.

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