A Silicon Valley Engineer Looks to Scale Tech Solutions for the Nonprofit Sector

Jacob Lund/shutterstock

Silicon Valley engineer and social entrepreneur Jim Fruchterman has launched a new organization called Tech Matters. With $1.7 million in funding from the likes of Schmidt Futures, the Peery Foundation, Facebook, Twilio, Okta and Working Capital, Tech Matters will implement systems-level changes for nonprofits in need of a technology upgrade.   

According to Fruchterman, it is crucial that the nonprofit sector begin adopting the same mindset and methodology towards implementing tech solutions as the for-profit sector. “Every modern for-profit industry has widely available cloud platforms,” explains Fruchterman. For example, if you own a golf course there’s five different cloud-based software systems you can choose from to manage your business. In other industries, like construction or restaurants, there are many more choices. The wide availability of these systems “make it possible for a company in that industry to focus on their core value proposition, not whether the software works. But that’s not the case in the nonprofit sector."

Vital But Neglected

Nonprofits have long pleaded with funders for more support for tech infrastructure, as part of broader appeals for help with organizational capacity building—an all-important priority that’s often neglected by a foundation sector that doles out the majority of grants in the form of program support to advance favored causes.

Some money does go out the door for tech systems, to be sure. According to data from Foundation Center, over the past year, more than 1,600 grants totaling nearly $500 million were made to organizations for system and operational improvements, technical assistance and IT. That’s not nothing. But contrast this figure with the over 47,000 programmatic support grants, which amounts to over $15 billion, granted during that same time period.

Not surprisingly, funders from Silicon Valley are more attuned to the tech challenges of nonprofits than typical foundation program officers—as Tech Matters’ slate of backers shows.

Still, finding funding for the organization has taken some work, says Fruchterman, even though the Silicon Valley engineer has a decades-long history of raising money. While one of the funders of Tech Matters, the Peery Foundation, was a previous backer of Benetech, the other supporters are new relationships for him. “Based on past experience, there are major donors who are willing to make grants to systems change efforts, or invest in field-level capacity, but the tech has to be far along,” he says. “We’re building shared infrastructure for nonprofits, and these early donors were willing to place a bet that we could turn a concept into a new social enterprise that would serve hundreds or thousands of nonprofits.”

Getting Started

Tech Matters’ first partnership is with Child Helpline International (CHI), an organization which provides hotlines for children in 145 countries who are facing hardships such as drug and sexual abuse. CHI takes 30 million calls a year. According to Fruchterman, each hotline built its own platform, at great expense, even though in aggregate they accomplish roughly the same thing. “Imagine if every $1 million/year restaurant felt they needed their own software!” he exclaims.

Fruchterman wants to implement systemic change, which implies scaling solutions to benefit multiple organizations. To accomplish that, he needs to confront what he terms “the cult of custom”—which is the widespread belief that each nonprofit is different, and therefore requires customized software solutions. “If we build a platform that 50 of them adopt,” says Fruchterman about CHI, “we’d be building tools that help them reach tens of millions of kids.” Once fully-implemented, the software can then be scaled even further, to adjacent fields such as domestic abuse, mental health and disaster response helplines. Scalable solutions increase efficiency and lower costs, which translates into more dollars being allocated to programs as opposed to overhead.  

Nonprofit leaders tend to lack the technical savvy to manage the process of onboarding new tech, which is something Fruchterman aims to remedy. He recounted various horror stories from nonprofits—like funding new apps that didn’t end up working, hiring expensive IT people to handle unnecessary tech upgrades, and accepting bad advice from strategy advisors, which often led to the aforementioned problems in the first place. “We need to overcome these negative attitudes and memes with real stories of how technology has unlocked major social impact, where impact per dollar spent on programs went way up.”

A Veteran Player

Fruchterman has been at the forefront of technology and social impact since the late 1980s, when he launched Benetech. Among other initiatives, the ‘software for social good’ platform digitized reading materials for the blind, which helped it secure hundreds of millions in funding.

Fruchterman notes how it’s easier to raise money these days when appealing for technology upgrades, given how ubiquitous software solutions have become. “We raised almost no money in the ’90s from philanthropy. It was only in the early 2000s that we raised our first $5 million in funding from Silicon Valley foundations created by new donors, like Jeff Skoll and Pierre Omidyar,” explains Fruchterman. “It’s easier for me to raise money now, as a long-time fixture in the social good field who is doing something new.”

While the COVID-19 pandemic has scrambled everything lately, Fruchterman believes the crisis will only further serve to fuel his efforts. “Most experienced disaster responders know that the best way to prepare for emergencies is to invest in the capacities of the agencies and organizations who will be on the front lines of the response.” Given the current moment, it’s possible that giving for infrastructure and scalable IT solutions becomes a topic of concern for grantmakers—or at the very least a more palatable allocation of resources.

Fruchterman hopes so, given that his long-held dream is to establish a fully-functional “crisis contact center in a box” solution. “I was already talking to the major cloud tech company in the contact center field, Twilio (full disclosure, they made a grant to CHI for the project we’re working on), to explore the possibility of standing up a new contact center in a day. Or two hours. Today’s tools make this kind of speed conceivable. You could have a new toll-free number, a WhatsApp and Facebook Messenger connection, and the ability to have 100 operators (volunteer or staff) taking calls and collecting needs in a database, all inside of a day.”

Fruchterman says his “crisis center in a box” solution will take two years to implement. But that means should another pandemic—or similar global crisis—strike, we would already have a reliable system in place; one that has been properly tested at scale, which addresses security and privacy concerns, and contains minimal variable costs. For that reason, Fruchterman believes open-source software designed for crisis response, and implemented in partnership with crisis response agencies, is the wave of the future. “I am optimistic that coalitions of nonprofit leaders (who are mainly not technical), paired with technologists who understand social impact, will be able to get large funding from donors backing systems change efforts. In fact, I can’t imagine a large systems change effort starting now without including a significant tech component for learning and measuring impact.”