Is it time for FoundationTech?

We’ve all heard of biotech, fintech, and insurtech. Is another institutional ecosystem ripe for technology disruption? As I reflect back on conversations I recently held with leaders at a few foundations, it sparked some observations I thought I would share with you.  First, a few facts and figures. 

• There are over 90,000 private foundations in the US and over 260,000 globally (according to The Harvard Kennedy School of Government).  
• Private Foundations are a subset of philanthropic giving (over 1 million US public charities) with over a trillion dollars of assets in the US alone.
• Private foundations are typically founded and supported by an individual donor, a donor family or corporation.
• The top five areas of foundation funding are health, education, human services, economic development, and arts/culture.
• The vast majority of private foundations are grant-making institutions with some administering programs.

So, given the current global challenges across a wide spectrum of problem sets (energy independence, climate change, pandemic preparedness, food insecurity, and economic equity/justice), it’s not surprising that large foundations receive thousands of applications for grants every year. What is surprising is how little has changed over the past twenty-five years in terms of foundation processes and technology. A large number of grant reviews are still manually researched, assessed, and processed. Moreover, there is usually very little detailed real-time feedback about program outcomes or mechanisms in place to optimize synergies across programs.

One can envision how technology can play an outsized role in increasing a foundation’s efficiency and more importantly, its impact. Machine learning (ML), natural language processing (NLP), and artificial intelligence (AI) can be leveraged to process, score, and recommend grant proposals increasing the efficiency and scale of what currently is, a manually intensive process. 

Many foundations have antiquated infrastructures (by today’s mobile standards) with poor integration across systems making harnessing the power of data assets very challenging. Cloud computing, API-first designs, and advanced data analytics are well established technologies that are ripe for foundation use cases. 

Lastly, many technologies can be employed to enable more proactive engagement with and across grantees by leveraging their considerable network knowledge base to improve grant outcomes. These new capabilities can help foundations catalyze the full potential of their grants and serve as a force multiplier.