The New Tech Startups
A conversation with Fast Forward’s Shannon Farley about the promise of nonprofits in a changing tech sector
When you speak with Shannon Farley, it is impossible to leave without a sense of great excitement for the future of tech organizations whose bottom line is the greater good.
After co-founding a juvenile-justice nonprofit, the W. Haywood Burns Institute; and leading Spark, which connects a network of young philanthropists to grassroots women’s organizations worldwide, Shannon partnered with tech entrepreneur Kevin Barenblat to launch Fast Forward, the first-ever accelerator program for tech nonprofits.
Fast Forward adapts the for-profit accelerator model to identify and champion groups creating tech-based solutions to advance health, education, civic engagement and more. Fast Forward has provided seed funding, training and mentoring to 31 teams of entrepreneurs and has built an ecosystem of support for this quickly growing sector. The Rita Allen Foundation has been supporting Fast Forward since 2016 as part of our commitment to investing in innovative approaches to strengthening civic engagement.
“We’re seeing people start tech nonprofits every day,” she said when I spoke to her recently. “That wasn’t true four years ago when we started Fast Forward. As the models and the leaders of the sector become more visible, more people can see themselves running this type of organization.”
In the conversation that follows, we discuss the challenges and opportunities tech nonprofits face, advice for fundraising, diversity in tech nonprofits, and a few of the inspiring startups in the Fast Forward family.
—Elizabeth Good Christopherson
President and Chief Executive Officer
Rita Allen Foundation
What did it take to navigate through this last year, and what’s going to fuel your thoughts going forward?
This year our Accelerate Good Global Summit was huge—600 people registered, and the conversations were really fruitful. We had some of the largest scaled tech nonprofits in the U.S., like Crisis Text Line and Code for America, along with several organizations that had started only a month before. It was really exciting to see how much the sector has grown even in a year—in a particularly crazy year.
Last year, a great deal of the discourse was about the negative side effects of tech, like housing prices going up and income inequality, and there was deep concern about what tech companies were doing to our communities. This year one of the things that’s crazy is that many fringe technologies have gone mainstream. For instance, simple, inexpensive applications of the “internet of things,” like Google Home or Alexa, are now less than $50. And much misunderstood but talked-about technologies like blockchain are on the nightly news. Technology is getting cheaper, and it has become ubiquitous regardless of income level.
At the same time Silicon Valley is in a crisis-of-conscience moment, between the tech fallout from fake news to generations of “bad boy” behavior that has been in our industry. People are no longer just questioning the side effects of technology—they’re also questioning the value of the tech itself. They’re wondering, is it addictive? Does it lead to depression? Does it destroy democracies?
“It’s a real opportunity for tech nonprofits to model what we expect from tech companies—all of them.”
We think it’s a great moment for tech nonprofits to rise. What tech nonprofits do is they start with impact and then they build a product. And now the for-profit industry is realizing that all tech has impact. Most for-profit tech has a sort of minimal-viable-governance approach to technology. What they’re realizing is you can’t sell tickets to the show and then not care about what happens on the stage. You’re also on the hook for that. It’s a real opportunity for tech nonprofits to model what we expect from tech companies—all of them.
And it’s a great time to apply these really cheap technologies to use cases that simply were not economically possible before.
If we talk again in a year, what sort of outcomes do you imagine?
Chatbots have gotten really cheap, like Twilio or Facebook Messenger. Most people in the developed world, and increasingly many people in the developing world, have mobile phones and are on Facebook, so suddenly you can use chatbots to communicate with people who were hard to reach previously. We’re seeing interesting translation applications that use the WhatsApp interface.
Machine learning is also getting cheaper. There are lots of off-the-shelf products to do basic artificial intelligence, and we’re seeing really interesting applications in the journalism space and civic tech space. We have alumni in our group called JustFix. It is technology for housing justice. It allows people to document terrible housing conditions, and then hold their landlords or the property developers accountable. In housing court 90 percent of landlords are represented by lawyers, and 90 percent of tenants are not represented. So JustFix empowers anyone to be able to document what’s happening within their home and report it out.
The housing justice community knows that it’s just a handful of really terrible landlords that are forcing people to live in these conditions. It’s been an open secret for years that those landlords have shell corporations. In their legal registration they just make slight tweaks to their documentation. Maybe they misspell something, or they move a number in their tax identification code. It looks like a mistake, but they do this intentionally, so they can have a lot of terrible properties out there and continue to make money.
One of the things JustFix did, thinking that these were the same landlords who were getting reported on all the time, is they used machine learning to build a fuzzy search algorithm to allow people to search and see. And they’ve been able to surface in New York City the handful of bad actors. Suddenly housing advocates and individuals living in these houses have not just better documentation, but evidence of patterns of abuse. That’s a powerful civic engagement tool that has never existed before and wouldn’t exist if the cost of the technologies had stayed so high.
That is really exciting. Do you see opportunities for continuing to spread people’s ability to create change through innovation? What other promising signs are you seeing?
Another piece of it is that nonprofit business models really lend themselves to open-sourcing—rather than holding your code and keeping it proprietary, you can open it up to the community so other people can use parts of it. Open-sourced fuzzy search algorithms are one of the ways that JustFix was able to quickly launch their search algorithm. As we see more tech nonprofits and more organizations committed to open-sourcing their code, we’re going to see applications in all kinds of fields, and I think that’s really exciting.
“One of the reasons there are more diverse founders in the tech nonprofit space is that people experience these problems, and then they go out to solve them. As people of color and women are disproportionately experiencing social injustice, we see them solving it with technology.”
Nonprofits can also open their data. At this year’s summit we heard from Crisis Text Line, one of the largest, most scaled tech nonprofits in the world. They open-sourced all the data they were getting from their emergency hotline, and it’s informing new kinds of scientific research. For example, they found that someone who texted the word “ibuprofen” was 16 times more likely to need an ambulance because of potential suicide attempts than someone who texted the word “suicide.” These nonprofits are allowing people to have insight into massive data sets that they wouldn’t otherwise have.
How do you see issues of access, diversity and inclusion in the tech nonprofit space?
The tech nonprofit space is particularly diverse. Forty-seven percent of tech nonprofits have a co-founder who’s a woman, compared to 17 percent in the for-profit space, and the number of organizations with a co-founder who’s a person of color is more than twice that of the for-profit space. So there is certainly a more diverse group of founders in the tech nonprofit space, and we think that’s exciting. [To learn more, read Fast Forward’s report, “The State of Diversity and Funding in the Tech Nonprofit Sector.”]
There are still issues of diversity on engineering teams. Even in the tech nonprofit space they are predominantly male and white, but it’s better than the for-profit space, so we hope that trend continues. One of the reasons there are more diverse founders in the tech nonprofit space is that people experience these problems, and then they go out to solve them. As people of color and women are disproportionately experiencing social injustice, we see them solving it with technology.
You are focusing on early-stage investments. Why is this early stage so important to you?
Early stage is really fun, because your dollars have outsized impact. One of our accelerator teams that scaled the fastest is CommonLit. It’s a literacy platform designed by a former Teach for America teacher, Michelle Brown. She wanted to create a free reading curriculum for teachers. When we met her, she had been in operation for about a year, her total budget was $90,000 and she was serving about 80,000 students. We gave her a $25,000 seed grant to go through the accelerator and build out her platform, and within a year she hit a million users. Eight months later CommonLit hit 4 million users. When you think about our early-stage investment in this organization, the return on impact is exponential, and there’s no signs of stopping.
Still, there aren’t that many funders in the space, so there’s a real opportunity for foundations that are interested in technology to try investing in tech nonprofits. I think too often foundations are risk-averse, even though philanthropy should be the ultimate risk capital: You’re not going to get it back, so you probably should take some pretty big bets. I hope that if we talk a year from now I can tell you there’s been growth in the number of foundations investing in tech nonprofits.
Is that the central barrier to getting more investment—that foundations tend to be risk-averse?
I also think the foundations we talk to feel ill-equipped to evaluate tech models. They don’t have tech people on their teams, other than maybe IT staff, to think about whether an app is going to work and what the go-to-market strategy is. So, there’s a piece of training that’s needed in the investor space. I have hope that we can get there. I would like to see more foundations both funding technology within organizations and bringing tech advisers into their decision-making pool to help them evaluate these opportunities.
Earlier this year you took part in a webinar discussion on the civic tech sustainability report we commissioned with the Knight Foundation. Can you tell us a bit about what happens with tech nonprofits in the next stage? What lessons or insights can you share?
I think there are a couple of rules of thumb for any startup. One is that you have to cross the million-dollar Rubicon. It’s very hard for organizations to raise a million dollars until they have a million dollars in annual revenue. So, whatever you have to do to get that million dollars within a year, you have to figure it out quickly.
We often see that early-stage organizations think one sort of buyer is going to be their path to success, and they don’t try enough in the beginning. We teach teams to do a little bit of the “spaghetti method”: Just throw it up on the wall and see who bites, and then you can find your product market fit through that.
The other thing that nonprofits don’t think about early enough is that fundraising isn’t something you do on the side. It’s actually just sales, and all businesses have to sell. How are you going to set up your business so that you find the right customer to sell to? I hear nonprofits say, “Well, it’s so hard, the person you’re selling to is not the person using your product.” But that’s how lots of businesses run now: Facebook sells to advertisers, but the users of the product are not paying for the service. The more nonprofits can think about how they design their offering for a dual audience, the faster they will be able to cross the million-dollar Rubicon.
Tech nonprofits really lend themselves to earned revenue models. Of our accelerator’s 31 alumni, all but two have buyer revenue: They’re white labeling their product or licensing it out, or they’re working with corporate partners to feature their products within the community where the partners work. There are lots of ways to generate sustainable revenue.
The problem comes in builder capital. There still aren’t that many organizations that are willing to invest in the research and development of tech nonprofits, and that’s a shame. We’re basically leaving impact on the table.
I think this is an incredible moment of opportunity in the civic tech space. There are eyes on Washington like never before. There are a ton of people who are interested in developing civic tech nonprofits, but I’m worried we’re going to miss the opportunity because we haven’t figured out the financing of these organizations yet. If we can’t figure out a way to get early-stage money into these organizations, they’re going to die on the vine.
Is there a recent project that especially inspires you?
I love entrepreneurs. Being around that kind of boundless energy and sometimes radical vision is just really fun. One such person is Brandon Anderson, the founder of Raheem. Brandon lost his lifetime partner to police violence. His partner was shot and killed in a routine traffic stop. Brandon, rather than being simply devastated by the loss of his love, decided to do something about it. It turns out the cop that shot his partner had similar incidents of violence on three separate occasions, but there was no way to publicly track the data on that particular cop.
So Brandon got about 20 volunteers from top tech companies, from Stripe and Square and Twilio, to build a Facebook Messenger chatbot to allow people to document their interactions with police, both positive and negative. Before Raheem, still had to go into a police station during business hours and file a paper report on how an interaction went—not exactly state of the art. Now they can do it on their phones. He piloted it in the Bay Area, and in just three months Raheem collected twice as much data as San Francisco and Oakland had in the entire previous year. And his total budget was $3,000. He was moonlighting as a Lyft driver to cover the cost of the initial build.
“This is an incredible moment of opportunity in the civic tech space. There are eyes on Washington like never before. There are a ton of people who are interested in developing civic tech nonprofits, but I’m worried we’re going to miss the opportunity because we haven’t figured out the financing of these organizations yet.”
So that’s the kind of technology that certainly has civic impact. It will allow police departments to think about the training and resources they provide cops. It will allow them to report both the positive interactions that people are having with police, because we so often hear about the negative interactions, and it allows people to see where policing may be helping or hurting a community. That kind of transparency has never existed between police departments and communities.
The chatbot will eventually be open-source, so any community could take it on and run with it. It’s a really exciting opportunity. And a wonderful way to transform pain to something positive.
Thank you for that. That’s a really wonderful story. Is there anything else you want to add?
The other thing that is amazing about tech nonprofits is that people are starting them everywhere. It’s not just in tech hubs like San Francisco, New York, and Austin. We get applications from Pittsburgh, Pennsylvania; and Richmond, Virginia; and Montana. They are everywhere. Technology can be created anywhere. It is possible to have vibrant tech ecosystems where tech is being applied in new ways in different places. As the country is concerned about what’s happening in Silicon Valley, the good news is that there’s great tech happening outside of these tech centers. People close to the problems in rural communities and small cities are solving them with technology.