Giving Compass' Take:

• Miriam Warren provides universal advice for funders who come from tech backgrounds and want to bring the best of their experience to philanthropy. 

• How does this advice align with your experience? 

• Read about the principles and practices of impact-driven philanthropy. 

Knowing staff members by name, understanding the challenges their organizations are facing, and being able to respond to their needs (including making relevant introductions to new sources of funding and potential board members) are all part of our process of “going deeper” that’s now much more possible with 15 grantees. This narrower focus also allows us to make the grantmaking process more equitable by doing our own due diligence, relying on publicly available sources to get the majority of the information we need. By the time we reach out to grantees, it’s to tell them we are awarding them a five-figure grant—and they don’t have to compete or complete any other make-work to get it. Respecting nonprofit leaders’ time is the first step toward balancing the inherently unequal power dynamic between grantors and grantees.

Funders should also strive to do the following:

1. Make the grant application as simple as possible. In the tech sector, we don’t believe in make-work, and we shouldn’t create it for nonprofits. In short, don’t ask for time or data you don’t need.

2. Make funding unrestricted and give multi-year grants. In his article on the power and pleasure of unrestricted funding, Kevin Starr asserts that unrestricted money makes an organization work smoothly, enables innovation, and provides fuel for growth. He also notes: “If you don’t think an organization is smart enough to use your money well, don’t give them any.”

There is also benefit in sustained funding. In their article detailing practical steps toward nonprofit financial resilience, Rebecca Coker, Neela Pal, and Miguel M. Salinas write that “projecting a budget over multiple years gives an organization much-needed visibility into its financial future.”

3. Expect general and administrative costs. Just as in for-profit work, getting a product or service out the door requires more than just the parts themselves. Does your company run on 10 percent overhead?

4. Get the money out the door when you say you will. Nonprofits plan how they will use grants as soon as funders promise them, but they can’t make crucial hires or order materials for campaigns until they have cash in hand. Wire transfer is the fastest, safest way to send cash and spares grantees days of mailbox monitoring.

5. Join a nonprofit board. Joining a nonprofit board is a good development experience for all private-sector employees, but especially for funders. It immerses funders in the challenges of the social sector and the experiences of nonprofit professionals, equipping us to be the best funders we can be.

Read the full article about advice for tech funders by Miriam Warren at Stanford Social Innovation Review.