With its potential for viral success and massive wealth creation, the for-profit tech start-up looms large in the popular imagination. But what about nonprofit tech start-ups? In this guide to nonprofit start-ups, social entrepreneur Jim Fruchterman walks through the steps to create a social enterprise. The challenges of developing a viable idea and raising capital are similar in the for-profit and nonprofit worlds. But there’s one significant difference: Nonprofit start-ups need not make money to satisfy investors, which gives founders more leeway.
When it comes to technology investment, nonprofits are behind the times.
With their perennially tight budgets, nonprofits lack the wherewithal to invest in the latest technology. Many philanthropic organizations find themselves stuck a decade or more behind the technology curve. Visit a charity or government agency, and chances are the hardware and software are significantly outdated. While it’s crucial for any modern organization to invest in technology, the reality is that donors often consider tech tools as overheads rather than part of the mission.
Nonprofit organizations can take several approaches to technology. For many, adapting existing, widely-used tools like Microsoft Office or Slack will suffice. Big tech companies often extend discounted pricing to charities and public agencies. TechSoup Global compiles these cut-rate offerings, along with affordable tech training and other resources. Alternately, you can make your own custom software or purchase it from a vendor. Given the costs associated with developing your own tech solutions, the latter option is almost always the better choice — though it pays to have a tech-savvy...
Jim Fruchterman is a leading social entrepreneur, a MacArthur fellow, and the founder of Benetech, an award-winning nonprofit. He is the CEO of Tech Matters, a nonprofit that develops open-source software.
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