More than Bit Players

April, 2001, 45 pages. The Surdna Foundation.

More than Bit Players, commissioned by the Surdna Foundation, examines how Information Technology (IT) changes the way that organizations, including nonprofit organizations, work. The report offers suggestions for grantmakers who are assessing proposals for projects based on information technology and discusses ways to put costs and timing into perspective.

Most importantly, Andrew Blau, the report's author, encourages us to think about technology as a mechanism to build and support the nonprofit infrastructure, including back-office functions, technology-powered communications strategies, and organizations that exist exclusively in cyberspace. He cautions us to think about challenges such as the frequent lack of measurable gains in performance, the end of "geographic protection," and the implications of supporting too many project starts without providing sufficient resources to allow any one to succeed. This thought-provoking report encourages us to examine the ways that technology can cut across programmatic boundaries, and it contains many implications for arts organizations.

IT has changed our work environment in dramatic ways. It has created new opportunities for and new costs of doing business. IT projects are expensive, require significant training, and tend to become obsolete quickly. Even as costs for the hardware and software drop, overall spending on IT has grown significantly. In the report, Blau writes, "IT changes what an organization has to keep 'in house' and what it can let others do." Contracting for services formerly done in house has become more attractive as the costs of information management fall, and more Application Service Providers (ASPs) are responding to this opportunity.

Blau reminds us, however, that "one can't simply take the desirable parts — the speed, the lower costs, or the global reach — without the parts that can disrupt the ways an organization works.” IT requires thoughtful planning as well as significant financial resources, time, and an organizational commitment to reconsider the way work is performed. Research has found that IT implementation is not very successful when organizations simply copy one another. Success is found more often when organizations adapt to technology by simultaneously investing in new strategies and in new business processes.

IT will not only change the way that individual organizations work, and the way that grantmakers respond to their work, it will change the field. Blau says, “It is possible that the nonprofit landscape will come to feature a smaller number of larger, better financed organizations that are more adept at negotiating the networked noncommercial marketplace.” He writes, “Winners keep on winning,” and suggests that there is an important difference between the absolute size of the organization (the size the organization has to be) and its relative size (its size within a niche, community, or sector).

While institutions with significant resources will have a greater likelihood of success with technology projects, smaller organizations can gain enormous benefit from IT if they think about how to identify and connect with their audiences. This is especially true with arts organizations whose visibility is linked with their ability to present or produce high-quality work, sell tickets, and ultimately, to survive. Organizations that have built a large audience or marketing presence can become the dominant player.

Because audiences for Internet sites and applications can transcend geographic boundaries, IT challenges us to re-think our notions of geography. An organization can reach a much larger area without a rise in costs. Organizations that had been protected “naturally” by geography suddenly find themselves competing with regional or national organizations.

During the market's irrational exuberance around the “dot coms,” nonprofits felt pressure to compete in this arena. As Blau said in a recent conversation, “we wondered why the nonprofits couldn't do it too. We thought that maybe IT could help them transcend their own limitations.” The dot com collapse has forced us to reconsider our own expectations. Now that the bubble has burst, the pressure is off. It is clear that Internet companies weren't so successful either.

The story, however, is not over. “We are at the end of Act I,” Blau says. We are now in what he describes as a moment of “new freedom.” Early utopian hopes and pressures have vanished. IT projects are still very expensive and continue to challenge organizations and funders to adopt the technology and to use the applications to change the way they manage information and staff, and the way they interact with audiences.

Most importantly, however, the challenges that technology presents are the same that exist in the absence of technology. We've had many dreams in the arts about what these new technologies can offer. But many of the “new” dreams are “old” dreams. What kind of relationship do we want with our audiences and what does it mean to experience the arts in person, as distinct from listening to a recording or watching a taped performance? How do organizations balance the pursuit of new forms of artistic expression and experience without sacrificing the “old”? How will organizations who choose not to adopt IT define their niche and cultivate an audience in a crowded marketplace?
Technology forces us to think about the services we're providing and the goals we're pursuing. Blau encourages us to spend more time thinking about arts organizations' technology needs and how technology can strengthen the arts infrastructure.

Reviewed by Natasha Terk, Program Officer, David and Lucile Packard Foundation,