Why have philanthropic funders traditionally shied away from tech nonprofits?

In a recent Forbes article, Shannon Farley suggests that this is the right time for funders to look to nonprofits that use tech to solve large-scale societal problems, especially where there has been a market failure.

 High-potential tech nonprofits, like their for-profit counterparts, have a proven product-market fit and are on the path to being revenue self-sustaining.

According to Farley, there are approximately 1,000 high-potential tech nonprofits today. Yet there remains a lack of catalytic philanthropic investment in these organizations.

Funders have long decried the need for nonprofits to generate sustaining revenue. Here is the opportunity.

The mission focus of these high-growth tech organizations often means that they are looking at the market differently—for example focusing on the marginalized populations not well served by the market.

That does not mean that the scope and scale of the market is not significant. It might mean that the revenue is generated through third-party payors or through a B to C model.  T

There are a growing number of philanthropy organizations that are taking a venture approach looking for high growth potential, technology, and a compelling social impact.

If you are a social impact organization that leverages technology and is pursuing dynamic funding, contact me at Agile Fundraising and Strategy Consulting lpoller@agilefundraisingstrategy.com for a brief introductory conversation.

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