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What Can Gov Tech Gain from Philanthropic Funding?

As the pandemic eases and elections loom, philanthropies and nonprofits are trying to make a larger impact in the state and local gov tech space. What is driving this activity, and where will it lead?

Even as venture capitalists, private equity firms and other investors pump money into the government technology industry, philanthropies and nonprofits are making their presence known — a trend that could gain speed in the coming years.

That, in turn, could give the people who buy and deploy technology at the state and local levels more options for funding and expertise as gov tech becomes increasingly digital.

A recent example of such activity comes from Schmidt Futures, a philanthropic group run by Eric Schmidt, a former CEO of Google, and his wife. The organization, alongside several others, has put up $13 million to fund what it calls a Social Safety Net Product Studio, which has 12 groups building scalable tools designed to expand access to social benefits — just one of the ongoing nonprofit projects focused on benefit access.

Think of that product studio almost as a sandbox, allowing tech innovators to create with a sense of freedom not available to all entrepreneurs, says Anjali Fernandes, the Schmidt Futures program manager who explained the program to Government Technology.

“We have the flexibility to directly support grantees that are trying things that may be a little riskier,” she said, “and that may not automatically secure a $10 billion government contract. We see ourselves as de-risking capital and offering proof of concept for other organizations.”


It’s hard to get an exact measure of how impactful philanthropies and nonprofits are among state and local gov tech, given that so much of the activity involves relatively off-the-radar projects that include not only funding but mentorships, incubators and networking help. But the people helping to drive technology decisions for public agencies are certainly noticing and expecting more such activity as governments emerge from the pandemic with all types of digital and modernization motivation.

“It’s starting to become more and more of a factor,” Salt Lake City CIO Aaron Bentley told Government Technology, pointing to the potential for local philanthropic efforts and partnerships stemming from Utah’s tech startup scene, which includes the Silicon Slopes nonprofit, a self-described “voice, hub and heart” of that business community. “It would be foolish of me to not include those groups in the equation. For too long governments have tried to make decisions in a box. The more we open the box, the more feedback and funding we can gain.”


The pandemic not only drove innovation and improvisation for local and state governments, but showed the significant need for digital expertise, often from outside experts working for nonprofits. So, too, are the coming elections, around which fears of security breaches and other problems abound.

One example comes from U.S. Digital Response (USDR), a nonprofit, nonpartisan group that offers grant tracking, procurement evaluation, data analysis and other free, volunteer-driven services to public agencies. It recently built in two days a public-facing wait-time tracker for six early voting sites for one client, Tina Walha, the group’s director of public digital, wrote via email. She added that other agencies also could use the tool.

USDR works not only on rapid response projects but what she called “deeper dives” with partners looking to build better digital technology. The group has worked on more than 330 projects across 38 states and territories, and has an “ecosystem … with organizations that span from vendors to direct service,” she said.

Federal infrastructure and other forms of funding flowing to state and local governments also are helping to spark ongoing gov tech work by philanthropies and nonprofits, Walha said.

“Following this investment, we held listening sessions with ecosystem partners across the broadband and digital equity landscape to understand their needs better when boosting high-speed Internet access and adoption,” she said. "These sessions helped design our newest program focus area, Broadband and Digital Equity, created to support state, local and tribal governments to increase broadband access.”


One of the guiding principles fueling philanthropic and nonprofit work in gov tech is public interest technology, described by the Ford Foundation as “a growing field made up of technologists who work to ensure technology is created and used responsibly.”

While traditional, for-profit investment seems increasingly bullish on gov tech — it’s viewed as a relative safe haven as a potential recession looms, with all-in-one platforms, managed services and other trends serving to make the field attractive to VCs and others — that type of capital can’t do all that is needed, said Jenny Toomey, who directs the Ford Foundation Catalyst Fund, a $50 million, three-year investment vehicle.

“Not every form of capital is well-suited to investing in infrastructure in the public interest,” she said in an email interview. “We are working to ensure the public interest tech lens, focused on prioritizing public interest values like transparency and accountability, can penetrate policymaking. This is happening through multiple mechanisms, including through fellowships, to ensure strategic tech expertise is available to leaders as they govern.”

She used the recent push for student loan forgiveness as an example of how the Ford Foundation views this space. The policy promises to affect millions of people, and relies on a website application designed to take minutes to fill out. Having what she called “effective service delivery” for such programs is part of the larger process of making policies “more effective and responsible.”

As Toomey explained, technology design is the new policymaker, using a quote attributed to Latanya Sweeney, a Harvard professor of government and technology.

“We are building a field that understands that technology is never neutral,” Toomey said. “Bringing values like justice, accountability and equity to the fore is critical to the work of a public interest technologist and to our philanthropic approach. This will also help the government hold those in the private sector accountable for improving communities, not harming them.”

Editor's note: This story has been corrected to show that the Social Safety Net Product Studio was funded by several organizations along with Schmidt Futures.
Thad Rueter writes about the business of government technology. He covered local and state governments for newspapers in the Chicago area and Florida, as well as e-commerce, digital payments and related topics for various publications. He lives in Wisconsin.