Astride the Digital Divide

Many charities struggle to make effective use of new technology

At the start of the 21st century, the nonprofit world is far from ready to take full advantage of the flowering of the Information Age.

A few groups have found that by exploiting the Internet and

other information technologies they can slash expenses, extend the reach of their programs, and transform the way they work. But many others have been frustrated as they wrestle with increasingly complex hardware and software, hampered by a lack of technical expertise, unable to raise funds to get the equipment and training they need, or perhaps merely skeptical about the need to change.

This growing gap in the technological capacities of nonprofit organizations has attracted increasing attention from policymakers, corporations, grant makers, and nonprofit groups themselves. Many observers worry that organizations on the wrong side of this “digital divide” risk being stranded in a technological backwater as the rest of the world sails by on a silicon chip.

“Technology will be the driver for resolving a lot of problems in the future,” says Tony Wilhelm, communications policy director at the Benton Foundation, in Washington. “But people first have to see technology as a primary means for resolving social ills.”

Many nonprofit groups are already pioneering innovative uses for technology. Health workers in remote areas use telecommunications to relay patient X-rays and other test results to specialists in urban hospitals for diagnosis. Counselors use pagers to stay in touch with kids with spotty school attendance records. A group that helps battered women puts a personal computer in a hospital so victims can apply for court injunctions against their abusers from the safety of the emergency room.

Yet other organizations find it difficult to envision benefits sufficient to justify the investment of scarce resources in high-tech equipment.

“Low-income communities have not been engaged in how to use this technology, so people don’t really get that this can impact their day-to-day lives,” says Dirk Slater, who runs the Low Income Networking and Communications Project for the Welfare Law Center, in New York. He is trying to change that by developing material interesting and useful enough to lure low-income organizers online, spreading the word that such information exists, and generally helping groups imagine how technology can further their missions.

“We had enormous trouble when we started this project with low-income groups seeing technology as the enemy, and the Internet as something that keeps folks from talking with one another,” Mr. Slater notes. “If you’re an organizing group, face-to-face interaction is what you thrive on.”

Mr. Slater and others believe that technology is a crucial component in effectively helping many traditional nonprofit constituencies — the poor, the disabled, the elderly, and residents of rural areas — that are disproportionately represented among the more than 100 million Americans still offline. Grassroots activists are more effective, they say, when they can collaborate with one another and lobby public officials online and broadcast their message directly to the public. Yet many of the nonprofit groups created to serve those same constituencies find themselves ill-equipped to lead the way into the Digital Age.

“It’s clear there’s been an organizational digital divide,” says Joan Fanning, executive director of NPower, a Seattle organization started by several companies and philanthropies to help other nonprofit groups make better use of technology. But the nature of the gap has changed.

Several years ago, that gulf separated organizations that had new hardware and software from those that did not. Today, falling prices and rising donations from computer companies and other grant makers have placed high-tech equipment within reach of all but the poorest organizations. Yet other disparities remain, dividing the groups that have figured out how to use the new technology to improve their effectiveness from the ones that have not.

Two recent surveys confirm that impression. Many nonprofit leaders find the Internet confusing and difficult to navigate, and use it primarily for e-mail, according to a report issued last year by the Pew Partnership for Civic Change. And a just-published survey conducted by Gifts In Kind International shows that many nonprofit groups still fall far short of the criteria Gifts In Kind considers necessary for being “technology healthy.” Many groups had acquired the requisite technology: Only 47 percent of the more than 2,000 groups surveyed had a Pentium computer for every staff member, but 66 percent had a Web site, 70 percent had voice mail, 87 percent were using e-mail, and 89 percent had access to the Internet.

But far fewer groups had done the kind of planning and obtained the support needed to take full advantage of their technology. Just 33 percent of the groups had a long-term technology plan approved by the board, for example, and a minority had an on-site staff member to handle technology (employed full time at 23 percent of the groups and part time at 14 percent).

Upgrading Equipment

Given the changing nature of the problem, experts are prescribing various remedies. High-tech companies that donate equipment are increasingly helping charities figure out how to use it effectively as well. Cisco Systems, for example, is adapting for its nonprofit grantees and customers a seminar on state-of-the-art Internet solutions that it offers its corporate clients who wish to improve their productivity. Senior management teams travel to Cisco’s headquarters in San Jose, Calif., to see how the company uses the Internet creatively and thereby saves itself an estimated $1.4-billion a year.

“Most people in the nonprofit world still look to the Internet as a fund-raising tool, not a management tool to improve their efficiency,” says Michael Yutrzenka, Cisco’s senior manager for community investment. But online computing can do much more to increase a group’s productivity, he says, permitting it to focus its resources on its central mission rather than on its back-office administrative functions.

The first charity to take Cisco’s seminar was City Year, a Boston organization that recruits young people for a year of community service in 13 cities around the country. With the help of Cisco and other corporate donors, the charity in the past several years has dramatically upgraded its technology and integrated the Internet into its daily operations, putting it to a variety of uses including conference planning, toll-free long-distance phone service, financial accounting, and recruiting volunteers.

Cost savings and greater efficiency are only some of the benefits, though significant ones, says its president, Michael Brown. For example, training staff members how to recruit middle-school students for its youth corps once involved flying staff members from other cities to the group’s headquarters in Boston and putting them up in a hotel for a week. Now the training can be done over the charity’s intranet — a high-speed private communications network that links its 13 offices together.

“We’ll save enormous amounts of time and the cost of moving people around the country,” Mr. Brown says. As a bonus, program participants learn computing skills that may pay dividends in their future careers after their year of service is over.

But when the group shifts its financial accounting to the intranet, the charity will experience a more fundamental change, he says. Its officials will be able to monitor financial details and track trends on a daily, rather than a quarterly, basis. That ability will reinforce the organization’s predilection for openness, says Mr. Brown.

The result will be greatly beneficial, he predicts. “Technology allows you to create an organizational culture of high transparency and accountability,” he says. “It’s having a revolutionary effect here. Our mantra is, Everything to the Web.”

Systematic Measures

Such a transformation can be expensive, but City Year has attracted generous corporate support. Compaq has donated 400 computers, while Cisco has contributed $1-million in cash plus routers and servers worth about $500,000.

Other companies and foundations are underwriting efforts by such organizations as CompuMentor, NetCorps, NPower, and TechSoup to help nonprofit groups identify their technology needs and implement plans for improvements. Some grant makers have gone so far as to hire roving experts, known as “circuit riders,” who seek to craft similar solutions for their grantees.

The federal government, for its part, awards grants to nonprofit groups and local government agencies that use technology creatively. Last year, the Technology Opportunities Program gave $15-million for 35 projects — and will give $42.5-million this year.

Such efforts, however, remain “a drop in the bucket” in the face of overwhelming need, says Mario Morino, founder of the Morino Institute, in Washington. He says the growing digital divide is unlikely to be bridged in such a piecemeal fashion. What’s needed, he believes, are more systematic measures on the scale of a domestic Marshall Plan.

Mr. Morino, a former software executive whose institute focuses on harnessing technology to serve the poor, says both government and private resources must be increased substantially to tackle the problem. He suggests that a Digital Peace Corps be created to serve poor urban and rural areas. Its members, who would combine technological skills with strong expertise in a particular field like education, health care, or small business, could advise organizations on better ways of integrating technology into their programs. Companies could sponsor such members for two years of service, after which the experts would agree to go to work for their sponsors.

Some technology advisers are encouraging small or medium-size organizations to consider hiring so-called application service providers — groups or companies like NPower, 3rdsector.net, or Convio — to provide technological support for a range of services as varied as accounting, payroll, and managing donor records, so charities can free themselves from many of the hassles of trying to stay at the leading edge of technological change.

Charities that use such a service would connect online to access information stored in the computer facility’s database. But the service provider would be responsible for ensuring that the software is up-to-date and that the charity’s data is properly stored and backed up.

“Nonprofits can’t afford to develop robust infrastructures,” says Ms. Fanning, of NPower, “so A.S.P.’s can provide access to those services while nonprofits concentrate on their core competencies.” Application service providers generally also offer the high degree of data redundancy and protection necessary for groups that are entrusting them with critical functions like case management, client tracking, or donor relations.

Ms. Fanning notes that NPower this spring will begin a pilot program offering such services to 30 Seattle-area nonprofit groups. If successful, it hopes to expand the service to other regions.

Such a move can trim costs as well as headaches. Subscribing to computer applications delivered by an outside service provider saves a charity about 20 to 50 percent of the cost of providing them in-house, Ms. Fanning says. “That’s why the nonprofit market is flooding to it,” she adds.

Grant makers, too, can make their money go further. “If I’m a funder, with the same amount of money I can provide for 20 grantees to do it by themselves or for 100 organizations to participate by subscription” with an application service provider, she says.

Bridging the Divide

Properly used, say its proponents, technology can improve the efficiency of community groups and other charities, thereby saving them money they can plow back into their programs. It can also magnify their voices in policy debates and make it easier for them to communicate with supporters, collaborate with one another from distant locations, and expand or improve their programs in countless ways.

But achieving such gains will require serious spending on training and planning. “It’s easy to install technology, but it’s difficult to change what people do in order to apply and benefit from that technology,” says Mr. Morino.

In equipping a charity with computers, for example, hardware and software expenses should consume only about 30 percent of the project’s budget, Mr. Morino says. The remaining 70 percent should go toward staff and program development. “Before we put technology in, we may have to shore up other aspects of the management team or take other measures to improve the organization.”

While several grant makers have recognized the need for improving technological capacity in the nonprofit world and have committed resources to doing that, says Mr. Morino, many more have not made the connection between social problems and the technological backwardness of many groups working on those issues.

“What’s got to happen is a massive shift in thought and action that will lead to a major infusion of technology and resources into low-income areas of the United States,” he declares. The divide that matters most, he says, is the long-standing social and economic one separating rich from poor.

He adds: “Computers aren’t going to replace broken families, or ineffective schools, or any other social issues that are holding kids and families back.”

USE OF TECHNOLOGY BY NONPROFIT GROUPS