Why Are Foundation Leaders Slow to Adopt New Technology?

Foundation executives are behind the times when it comes to adopting new technology, according to the results of a recent survey. The report may leave you wondering if there isn't a missed opportunity for grantmakers to amplify their work – and in turn, their grantees' work – through the smart use of new technology.

“Grantmakers are not keeping up with the pace of technology,” said Michelle Greanias, executive director of the Grants Managers Network (GMN). “This can lead to a host of issues that affect not only funders but their grantees, who have to work within the technology constraints of foundations.”

Only 23 percent of foundations indicated that their executives totally understand the benefits of technology and 66 percent said their executives were “supportive but not very knowledgeable,” according to the report, produced jointly by the Technology Affinity Group (TAG) and GMN.

The majority of foundations report that technology is causing some change within their organizations, but less than 20 percent describe that change as “transformative.” And almost half of survey respondents described their technology adoption as “lags behind,” according to the report.

To be sure, technology does not cure all. And it makes good sense for foundations to place the utmost priority on program-related business. It may be time for some foundations to look more closely at how technology can support their programs.

“While many foundations are very progressive with respect to their grantmaking programs, they are not nearly as forward-thinking with respect to the strategic use of technology in their business practices,” said Lisa Pool, executive director of TAG.

Take grants management software: Foundations are gradually becoming paperless operations as they continue to implement online grant applications, electronic workflow, and document management software. Twenty percent of foundations reported they have an entirely paperless grants process, up 6 percent from 2012.

But with a less than enthusiastic embrace of new technology, are foundations getting the most out of their grants management systems? Not likely, according to Pool.

There have never been as many grants management tools available, said Pool, but it’s hard for staff to take full advantage of the software’s potential given the lack of strategic vision and comfort with technology reported for most foundation leaders.

Underscoring the point, it seems that the majority of foundations don’t see the value in technology planning for the future.

Only 23 percent of respondents said they have a technology plan that has been updated within the last two years, while an additional 15 percent reported they have a plan but it has not been updated, according to the report. “A Total of 62 percent of respondents reported they did not have a technology plan at all.”

All these results point to foundation leaders – and foundations themselves – not being ready for newer technologies that are replacing familiar but outdated systems, the authors conclude.

A side note: There has been a huge increase of foundations using dashboards and other tools to track outcomes. The use of operational dashboards increased from 16 percent in 2012 to 67 percent in 2014. Interestingly there has been a small decrease in the use of programmatic dashboards. Forty-two percent of respondents said they used a business intelligence or analytics tool.

But why aren’t foundations more foreword thinking when it comes to adopting new technology on a broader scale?

Though cost and staffing concerns play a significant role in foundations’ resistance to new technology, there are other factors to consider.

Foundations have limited external accountability, which in many ways, is a great strength. It gives foundations the independence and freedom to do something bold, unpopular, unconventional, according to the PhilanthropyRoundtable. But this also can leave foundation leaders in an “if it ain’t broke, don’t fix it” stance when it comes to new technology. They may not feel the urgency the same way a bottom-line driven business does. Or they believe every minute spent focusing on technology is a minute spent away from achieving their core mission.

It's clear, though, that how foundations view new technology is beginning to change to some degree, as the survey results show. For example, 68 percent of foundations will have replaced their grants management software between 2007 and 2015. That’s a lot of new technology implementation going on.

If the corporate and consumer markets are any indication, the rate of adoption will only grow exponentially. And the products to serve them will only improve.