SAN FRANCISCO – The ripple effect of the dot-com downturn has begun to hit dot-orgs. But according to representatives from online nonprofits gathered at a conference in San Jose on Tuesday and Wednesday, the bust actually has some strong upsides for do-gooders.
There is less money to go around now, and donors are looking for a demonstrable return of “good” for their investment. But the cash hasn’t dried up, and dot-orgs are suddenly flooded with applicants, office space is getting cheaper and donations of orphaned computers and office equipment are pouring in.
TechSoup.org is a nonprofit crammed into a Victorian house in the South of Market district of San Francisco. With big-time corporate funding from Microsoft and AOL, the organization – which helps other nonprofits solve their IT problems – needs more space. The downturn has made a move possible.
“We can afford to move now,” said Kristin Rothballer, working the TechSoup booth at the conference. “We’re busting out at the seams.”
TechSoup also managed to talk sites like AOL and Listen.com into donating unused ad space and scored 7 million free impressions in all. Last year that kind of online presence would have cost over $100,000.
“We decided to take advantage of the downturn and get free stuff,” Rothballer said.
They have also been giving excess office equipment that comes their way to other nonprofits. “We just slap a TechSoup sticker on it and give it away,” she said.
Of course, there are negative impacts as well. The consensus at the conference seemed to be that donors are definitely getting tighter with their money – especially foundations that give away investment profits earned on endowments.
“All foundations have taken a hit,” said C.J. Van Pelt, director of the Cisco Foundation.
Sarah Meyer, who oversees Microsoft’s charitable donations, said the company hasn’t cut back on donations in this year’s budget. But she conceded that while in past years the budget has grown from year to year, this year it has remained flat.
Plus, if Microsoft employees give less this year, the company will give less under its donation-matching program, which represented about half of the $35 million it gave away last year. Meyer attended the conference to announce $335,000 in cash and software awarded to Silicon Valley nonprofits.
As layoffs mount, dot-orgs that do get funding suddenly have a much bigger talent pool to choose from. Cisco just announced a plan to pay employees who work for a nonprofit for a year a third of their salary. Many organizations reported a dramatic spike in the number of applicants compared to a year ago.
Marks’ organization also runs a program called Compumentor that sends volunteer IT pros to help nonprofits get hooked up. There are a lot more volunteers now, she said.
Magda Escobar is executive director of East Palo Alto’s Plugged In, dedicated to bridging the digital divide. She agreed that the downturn has brought more applications from qualified people to her organization, and Plugged In was one of the groups to receive a grant from Microsoft this week.
But she was concerned that the cultural impact of the dot-com bust may have quashed the enthusiasm of young people who thought they were going to change the world, only to discover that business is business. And that will make it harder to find people willing to attack the status quo.
“During the boom, people were optimistic that the world could change,” she said. “It was drenched with optimism and energy. Now people’s dreams are sort of diminished. I’m worried the cultural and social divide will get bigger.”
Another sign of the times at the third annual session of the conference, called “Succeeding As a Dot-Org,” was the lack of for-profit companies hawking their wares to the dot-orgs. Last year, roughly 20 dot-coms showed up, mostly application service providers offering to manage the online presence of dot-orgs for a reasonable fee.
This year there were almost none. One of the few for-profits there was Grassroots Enterprises, formerly known as Grassroots.com. While it used to be a political website where visitors could learn about candidates and issues, now the company makes software that helps groups to mobilize their members in support of a cause.