Why Tech Nonprofit? 2 Questions Every Social Entrepreneur Must Ask Themselves
Almost every week we get the question, “Why tech nonprofit?” from individuals who are new to Fast Forward’s work. Our long term vision is to build an ecosystem in which every nonprofit organization structures their impact model around a core tech product, rather than thinking of tech as IT. Stronger technology increases an organization’s ability to scale and impact more lives. In this post we break down critical questions social entrepreneurs should consider when evaluating if a nonprofit business model is right for their startup venture.
Who is the intended customer?
Today it’s cheaper than ever to launch a tech startup. Low-cost infrastructure tools like YouTube, AWS, and Twilio make it possible to bootstrap a tech product for $5,000, while the same product might have cost millions of dollars to develop ten years ago. The barrier to entry for initial tech development is at an all time low. Our alumna, Heejae Lim, actually bootstrapped the MVP of her product TalkingPoints by taking $5,000 from her student loans to build a parental engagement platform using Twilio and Google Translate.
While startup costs have lowered, founders should still think critically about their end user before even beginning product development. Tech startups should opt for a nonprofit business model if their product is serving a particular population’s unmet needs or solving an issue in which market solutions have failed. If the product is intended for a low-income customer or a community that couldn’t otherwise afford your offering, nonprofit status will enable you to reach your target user. If the product or service is designed for the general public, 501(c)(3) status may not be the right business model.
Unlike direct-service nonprofits, such as soup kitchens or after-school programs, which require one-to-one interaction with the populations they serve, tech nonprofits achieve impact through original tech products. These products can now reach marginalized, hard-to-reach communities thanks to the ubiquity of the Internet and smartphones.
Is mission your true north?
We’ve found most successful tech nonprofit entrepreneurs are solving problems they’ve personally experienced to some degree. Lived experience equips entrepreneurs to build solutions like nothing else. It also puts mission at the forefront of your business.
Many of our fellows are building and scaling the products they wanted for themselves. Sixto Cancel founded Think of Us, a digital personal advisory board for foster youth. It’s the tool he longed for when he was growing up in the foster system, and struggling to manage all the supportive adults in his life. Similarly, Rey Faustino founded One Degree, a Yelp for social services, after experiencing the difficulty and frustration of sourcing social services resources growing up in a low-income family.
Nonprofit status keeps social entrepreneurs mission-focused because impact is the ultimate success metric. Scaled tech nonprofits like the Wikimedia Foundation or Code.org would likely be different organizations today if it weren’t for their nonprofit status. This instills trust among their communities and keeps them mission-aligned, whereas for-profit founders may be swayed by pivoting for funding opportunities or vanity numbers.
Last but not least, social entrepreneurs should consider trust when structuring their organization. Users, community partners, and funders know that fundamentally, nonprofits prioritize mission over margin, while for-profit companies (yes, even social enterprises) ultimately prioritize their bottom lines.
If this all sounds like you and your organization, we encourage you to apply for our 2017 accelerator program. Through the Fast Forward accelerator, you receive a $25,000 grant, 100+ mentors, introductions to funders and the tech nonprofit community, curated training, and ongoing support.
