- Introduction: Momentum is building
- Executive Summary
- Findings
- Everyone agrees that digital has become a priority
- Recommendations
- About CIRA
- Appendix A: Twenty funders were interviewed for this project, with one wishing to remain anonymous. Participating organizations included:
- Appendix B: NetGain Partnership case study
Table of contents
- Introduction: Momentum is building
- Executive Summary
- Findings
- Everyone agrees that digital has become a priority
- Recommendations
- About CIRA
- Appendix A: Twenty funders were interviewed for this project, with one wishing to remain anonymous. Participating organizations included:
- Appendix B: NetGain Partnership case study
Introduction: Momentum is building
The internet has revolutionized the ways that Canadians learn, work and keep in touch—but its benefits have not been felt universally. Millions of people still lack the skills, resources and connectivity required to participate in our increasingly digital society.
Right now, five per cent of Canadian households have no residential internet connection. Only half of rural and a third of First Nation households have access to the “basic” speed target of 50 megabits per second (Mbps) download and 10 Mbps upload set by Canada’s communications regulator in 2016.
In 2022, decent internet access isn’t a luxury – it isn’t even optional. When left unaddressed, digital speed and skills gaps cause people to be left behind.
What we’re talking about is digital equity—the condition where everyone has enough information technology capacity for full, meaningful participation in our society, democracy and economy.
And right now Canada is a country rife with digital inequity—and digital inequity takes many victims:
Rural school children can’t complete homework because they lack internet access at home.
Nunavut residents pay internet bills as high as $1,000 a month for the slowest internet in the country.
Low-income Canadians sacrifice food and medication to stay connected.
Innocent internet users are scammed out of millions of dollars each year online.
The list goes on and on. When left unchecked, digital inequity is a huge enabler of disadvantage and systemic discrimination for marginalized communities across the country.
On a broader level, there’s also a policy and advocacy imbalance that favours the perspectives of industry over communities and not-for-profits when it comes to designing public policy for the internet.
To help correct this imbalance and increase local control over how users access the internet, community groups and not-for-profits across the country are taking the lead on digital-development projects to help achieve digital equity. While the potential for meaningful community-level impact is high, the demand for funding is even higher – and growing.
At CIRA, our success running Canada’s top-level domain registry—.CA—and providing leading cybersecurity, DNS and registry services has made it possible to generate revenue that we invest in community-led internet initiatives in Canada. Since 2014, CIRA has funded 185 projects with $9.2 million through our Community Investment Program grants.
A few years ago, while refreshing our strategy, we were curious about the digital funding landscape in Canada. Many people we had spoken with believed there was more than enough funding for digital initiatives in Canada. They thought that various levels of government were taking care of Canadians’ basic connectivity and skills needs.
That prompted us to undertake in-depth research in 2020. By surveying the landscape, we found that the reality of the situation was quite different than perceived.
Through interviews with more than 100 not-for-profits, Indigenous communities, academics and others, we unearthed serious systemic policy and funding issues that result in a digital gap in Canada. We published those results in Unconnected: Funding Shortfalls, Policy Imbalances and How They Are Contributing to Canada’s Digital Underdevelopment.
CIRA’s grants program emerged as one of the few digitally focused funding programs accessible to non-profits in the country.
Since then, some progress in awareness around digital development needs has been made. The COVID-19 pandemic has pushed every facet of life online, and funders have found themselves staring at unacceptable levels of digital inequity among grant recipients and communities across the country, especially among those who have poor or no connectivity and have limited capacity and limited opportunity to get their voices heard on the larger issues.
It seems clearer to many people now, after two years of restrictions and a spike in online activity, that there’s a direct link between funding digital development and solving digital inequity and the social injustices it exacerbates.
Momentum among funders to address these gaps has slowly begun to build. Community Foundations of Canada, for example, included a specific focus on digital solutions in their Healthy Communities Initiative, a program funded by the Government of Canada. And Technovate is a consortium of donors actively working to mobilize a funding response to the digital divide in the not-for-profit sector.
Apart from these nascent efforts, funding for community groups leading digital development projects still remains largely ad hoc and inaccessible. We were keen to find out why.
This year, we conducted more research to learn directly from a variety of Canadian funders about their perceptions on digital development funding initiatives, including what they see as opportunities and barriers along with their ideas about how best to build funding capacity for initiatives.
This report presents findings from 20 in-depth interviews with a variety of different funders—some of whom are pioneers in the digital funding space and some of whom are new to it. While the funders overwhelmingly agree that digital equity is a priority, their level of commitment to it varies. Overwhelmed by the sheer scale of the problem, or unsure where or how to start, many seek education and leadership to inform their approach.
The research is clear on one point: the funding demand for digital initiatives is huge, and the apparent supply is small.
Many more players need to join Canada’s digital funding effort: community and private foundations, corporate giving programs, and tech philanthropies, to name a few. Our humble goal for this report is to plant a flag for digital equity in this country and encourage Canada’s philanthropic community to make digital equity a strategic priority in everything they do.
The research results show that digital development in Canada is underfunded, piecemeal, ad hoc and unorganized despite stakeholders sharing many of the same goals
— CIRA’s Unconnected report
Executive Summary
It’s shocking. In early 2021, there were more than 11,100 private and public foundations in Canada (see Figure 1). The most recent tax data shows that their assets tripled to $116 billion in the 10 years before 2019—and that they disbursed approximately $7 billion that year, but very little of this money is going to digital development.As we reported in Unconnected last year, “digital development in Canada is underfunded, piecemeal, ad hoc and unorganized.”
Digital development is just not a funding priority. If you look at the top 12 sectors or activity areas in terms of donations using the most recent data from 2018 (see Figure 2), you won’t see “digital” anything. The top three sectors have consistently been Education, Health and Social Services. Each of these were deeply transformed during the pandemic as millions of Canadians migrated online to study, work, use health services, and seek every other kind of service.
Yet, when you search “internet” or “digital” on Imagine Canada’s Grant Connect comprehensive funder database, a resource used by fundraisers, you’ll find fewer than 100 options out of approximately 4,500 grantmaking funders. This is in spite of the fact that not-for-profits in Canada believe they don’t have enough funding to make greater use of existing software/hardware and to access new digital tools.
On behalf of CIRA, the Strategic Counsel conducted a total of 20 interviews from November 11 to December 10, 2021. (See Appendix A for a list of the funders interviewed.) What follows below is a summary of our key findings.
Key Findings
Private funders have historically not prioritized digital development. A scan of the funding sector over the past decade shows very little goes to digital funding.
The pandemic forced funders to confront digital development challenges, and they now agree it’s a priority, though the level of commitment varies.
Some funders are reluctant to fund digital equity because they lack subject-matter expertise and confidence that they will engage at the right level.
Funders feel there’s an opportunity to create a coalition and develop a community of practice and shared vision. And they’re seeking leadership on this.
Some funders see opportunities to pool resources into a shared fund or to explore collaborative funding approaches to tackle the issues head on.
Several participants encouraged funders to shift their thinking from ‘tech as overhead’ towards ‘tech as enabling infrastructure’, and from project-based funding towards models based on trust between funders and practitioners.
Findings
After two years of digital ups and downs during the pandemic, funders see the connection between the digital world and social infrastructure. They realize that digital development is essential to the communities they support, yet there are problems and barriers.
During the pandemic, funders were inundated with requests related to hardware, software and digital services, and now, they’re seeing those in the context of the larger issues related to digital equity, basic needs and human rights.
Everyone agrees that digital has become a priority
Our findings suggest that funders are keen to play a role in supporting community-led, digital-development efforts. Whether the number-one issue for a funder is climate change or racial justice, mental health or community development, or any other social-impact area, they recognize that the number-two issue has to be digital equity. Canadians need to be able to get online to engage with issues and to make progress on them, and digital development is essential to making positive change in communities.
This view was echoed during interviews with 20 funders. We interpreted their comments and placed each funder on a scale to show approximately how much each prioritized digital funding (Figure 3).
For 11 organizations, funding for digital was a “reactive” or “emerging” priority. An additional six organizations, mainly in the tech industry, were “strategic” in choosing digital funding as “completely” a priority—and three organizations were close to those six.
Funders face barriers when approaching digital
Funders identified three main barriers keeping them from integrating digital into their funding approaches.
The first
is a lack of knowledge about basic digital issues, as well as little awareness and familiarity with digital development. “There’s a lack of expertise within grant-makers themselves,” explains Doug Gore, Partnership Development Lead at the Ontario Trillium Foundation. “We lack the knowledge about whether a digital-funding decision is good or not.” This reflects views across the country, and not only among funders. A recent CanadaHelps survey of approximately 1,400 not-for-profits, including foundations, revealed that most lack the knowledge and skills for digital development.
The second
barrier stems from the first: how and where, specifically, does a funder “show up” in this digital space if they believe they lack knowledge and expertise? “For a funder, it can often be nerve-wracking to fund into a space if you aren’t confident about your knowledge of who else is in there and how the ecosystem works,” explains Chad Lubelsky, Acting Chief Program Officer at the McConnell Foundation. He cites not only a need to build up the funder knowledge base about the issues, but also to build relationships among the players, suggesting that a neutral broker can play an important role here.
The third
barrier relates to larger infrastructure needs, such as community-level broadband or satellite rollouts that add or improve internet access for Canadians. Funders expressed little interest in pouring funds into large-scale, digital-access projects, because of the perceived magnitude of the need. They feel that these are the purview of government and industry. As Lubelsky put it, “Funders shy away from projects that feel like we’re trying to boil the ocean.”
Funders can support digital development within existing priorities
There’s a direct link between digital equity and achieving social justice. For instance, communities in rural or Northern areas need increased digital access to meet basic needs like schooling, work and health, as well as to advocate for fundamental human rights. Anyone with a mental health issue or healthcare issue in general, such as COVID-19, needs access to online news and resources.
Organizations and communities focussed on social justice or policy issues need access to legislative and consultative processes, not to mention online communications tools. No matter what funders focus on, they can’t have meaningful conversations about programs and long-term impacts without digital development being a part of the conversations. Remaining connected virtually is a crucial part of achieving social justice.
Furthermore, digital infrastructure, while offering essential social supports, also comes with an evolving array of pernicious new social problems: harassment campaigns, COVID-19 misinformation, voting manipulation, online scams, and social media violence, to name only a few of the crises that have emerged online. Whether they like it or not, social impact funders can’t ignore these and other issues exploding in communities across Canada.
Funders are in a good position to address some of the larger issues. “Imagine you have digital solutions that make programs accessible at the push of a button, that accelerate reach, impact and transformation,” says Mark Buell, Regional Vice President in North America for the Internet Society. “Those solutions would allow for greater inclusion and participation.”
In short, making digital development a priority doesn’t necessarily mean creating new programs within funders’ organizations. It means funding to address digital inequity within existing programs and integrating digital development within broader social objectives. As Allan Enriquez, Manager of Data & Systems at Community Foundations Canada puts it, “I think many funders are pretty specific in what they fund, and digital is, quite honestly, not the focus of many. But digital intersects with any focus area. It’s the underpinning.”In this sense, funders agree that digital priorities underpin all program priorities, and they don’t see the need to set up digital priorities as a standalone pillar.
Wanda Brascoupe, Strategic Advisor with the Indigenous Peoples Resilience Fund, explains it this way: “If you think about it, who’s responsible for digital equality? Is it philanthropy? Probably not. Could funders take part in it though? Yes, through policy, through raising their voices to share and say, ‘Hey, we’re finding significant gaps related to Indigenous Peoples from coast to coast. We’re seeing the consistency in the digital divide.”
Funders don’t need to ‘boil the ocean’
There’s a role for the philanthropic sector to fund digital development and thereby address digital inequity. In the interviews for this report, we asked funders to comment on some of the findings in our Unconnected report, which focused on identifying funding priorities for internet-related projects in Canada.
In that report, not-for-profits and community stakeholders told us that infrastructure projects and digital literacy were the highest priority areas for funding. Community leadership—which is understood as supporting groups and organizations to effectively advocate for equity in Canadians’ digital capacity—was also flagged. Inevitably, these diverse needs overlap, but community leadership, in particular, spurs policy advocacy and is essential to making change in the other areas.
We asked funders which areas aligned best with their funding interests, and heard that there’s interest in engaging in all three priority areas (infrastructure projects, digital literacy and community leadership), but those funders who hadn’t focused on digital development before were most interested in digital literacy and/or community leadership.
While there are many examples of funders supporting local connectivity initiatives, they perceive infrastructure projects as too expensive and unrealistic for philanthropy to take a significant role.
Overall, interest very much depends on how each area intersects with funders’ philosophies and core priorities. For example, the McConnell Foundation is a systems-change funder. “Community leadership, and for certain not technical infrastructure, would be a priority,” says Chad Lubelsky, Acting Chief Program Officer at the McConnell Foundation.“The work that we try to do, as a systems-change funder, builds resilience. Part of our theory of change includes supporting leadership initiatives within communities, and issues related to digital equity would touch on that.”
Funders can play an important role in community-led internet initiatives to educate, protect and empower internet users. The philanthropic sector doesn’t necessarily need to fund broadband infrastructure itself; it could fund community-based programs that, in turn, would advocate for digital equity and access to affordable, faster internet services and systems.
Funders seek a community of practice
Canadian funders want to work together to move forward in the digital space, but in contrast to digital funders in the U.S. and Europe, those in Canada lack a collaborative community or process.
Our findings show that funders want to build increased, sector-wide capacity to fund digital development and establish a community of practice in Canada, similar to the European Artificial Intelligence Fund (a philanthropic initiative to shape the direction of AI) or the US-based NetGain Partnership which focuses on digital rights and is particularly impressive. NetGain brings together program staff and foundation leadership from eight foundations including the Ford Foundation, MacArthur Foundation, Open Society Foundations and others. Media Democracy Fund is the strategic and operational partner to NetGain. Each year, NetGain selects a theme, commits to learning about a complex topic at a systemic level, and supports, through direct and pooled giving, a range of activities and organizations aligned with the annual theme (see Appendix B for more information).
In Canada, a forum, event or initiative involving a mix of tech organizations and those from social sectors could start to build bridges and provide foundational work, so that funders could start to understand the big issues and main players.
We can increase impact by pooling resources
There’s an opportunity for a coalition of funders to fill gaps in the system—for example, to fund consultations and initiatives that amplify the voices of rural, Northern, Indigenous and urban equity-seeking communities that are in search of their own connectivity solutions—as well as an opportunity to address knowledge gaps and avoid a duplication of efforts among funders.
Our findings show that an event to focus learning and build a community of practice could include proposals to pool funds and share experts, tools and resources. As one anonymous research participant told us: “It could be easier to get Board approval if we could say, ‘We’re going to contribute to a bigger fund that’s going to help fund the digital transformation of organizations.’ The pooled fund could have the necessary technical resources, so that there isn’t an onus on each funder to assess a program of this nature. Some kind of collaborative or pooled funding could go a long way, because it could streamline the resources you need in terms of identifying and funding impactful programs.”
The needs of groups working in this sector are far too great for one organization to address alone. CIRA, an actor keen to see growth in funding for digital initiatives in Canada, was frequently referenced in the findings as a neutral entity with a fundamental interest in Canada’s digital development that is well placed to take a lead in convening a community of practice.
Funding digital is a lot more than funding tech overhead
Funders raised an important, additional point during interviews: ensure that funding for digital development is understood as integral to digital equity and social justice—as funding that’s more than administrative overhead.
“Our own policies and systems get in the way in the sector, things like the perception that tech or digital is a ‘nice to have,’ so it gets bucketed within the 15% for administration. Like many others, it’s been ‘if you need some technology, some hardware, some software in order to accomplish the programmatic stuff, that might be included’, but in terms of dedicated funding for digital approaches, we don’t have that,” explains Doug Gore, Partnership Development Lead at the Ontario Trillium Foundation.
Willa Black, Vice President of Corporate Affairs at CISCO Canada reflects on how this trend affects communities and the not-for-profit sector. “For many years, many funders and donors looked at digital development as an operations issue. And they didn’t really understand technology as a strategic tool to drive scale, to help deliver programming more cost-effectively… I think we really have to get serious about technical and digital investment, and excellence, and understand what the benefits of that really are. Right now, I see a very high degree of underdevelopment.”
“Here’s what we found when our communities would apply, whether they were in cities, in rural areas, or in the far north: connectivity was a part of mental health, and a part of food sovereignty, and it supported elders in the community–and connectivity was a part of everything…” explains Wanda Brascoupe, Strategic Advisor with the Indigenous Peoples Resilience Fund. “You could, in your application process, much like you do with administration amounts, devote a line item to ‘the amount needed for connectivity,’ which would be outside of admin. So, it would be 10 per cent for administration and maybe 10 per cent for connectivity. And funders could be open to this approach.”
Jehad Aliweiwi, Executive Director of Laidlaw Foundation considers how funders can change their perspective: “What I think would be useful is to ensure that this is a component of our granting strategy. It’s an eligible expense, but more than that, trying to clarify from applicants what is their digital strategy… It’s about access and equity. There is an opportunity for us to think about this in the way we address racism, or class analysis in our work. We need to make sure that we are conscious of the digital divide and pay attention to it… It should become a lens by which we assess everything.”
Funding should evolve beyond project-based support
A number of funders also suggested a shift from program- or project-based models of funding to more relational and trust-based funding approaches. ‘Trust-based models’ create deeper partnerships, consider different ways of being, allow for more unencumbered funds, and rely less on performance indicators and impact reporting.
Many funders expressed that communities best know how to direct funds for digital development. Trust-based models address barriers faced by grant seekers, foster deeper relationships with Indigenous and marginalized groups and go a long way to shifting traditional mindsets.
Funders also shared a number of other ideas in assessing digital-first requests, suggesting best practices that go beyond traditional ‘grantor-grantee’ models and could increase impact:
- Provide support to a mix of organizations and individuals.
- Treat grantees and fellows as cohorts (i.e., invest in building a network and support cohort leadership programs).
- Embed a senior fellow or expert in cohorts to act as an advisor and documenter.
- Think long term and support multi-year initiatives.
- Be clear about target audiences and their needs but avoid being too prescriptive when creating buckets or streams of support.
Recommendations
This report has a humble goal: to plant a flag for funding digital equity in Canada.
It summarizes research from 20 interviews with some of Canada’s leading philanthropic funders. We put forward these conclusions and recommendations, based on their leadership and feedback:
Funding digital development must be a priority
Those who don’t make digital development a priority risk irrelevance. Digital equity and social justice hinge on digital development funding that’s proactive and strategic, not reactive and ad hoc, especially when addressing inequity and amplifying voices from marginalized communities.
Funders need to be brave
Some participants in our research expressed discomfort with their organizations’ lack of tech knowledge and with the prospect of stepping into a new issue area, but the needs are urgent, and many funders know that the unconnected will be left behind. Internet users face real threats, and funders can play an important role in community-led internet initiatives without feeling like they have to solve massive digital infrastructure problems alone.
Canada needs a community of practice for digital funding
To help bring new funders into the community, organizations with expertise in digital development can play a role in educating the sector about the digital inequities facing Canadians.
Funders need to pool resources
For example, as part of a community of practice and a shared vision for digital equity in Canada, funders could partner on initiatives, while one organization could manage their collaborative funding and collective resources. Funds could be distributed as grants for digital-development projects, as well as for educational opportunities for participants.
Funders should embed digital equity in their individual strategies
As funders undertake strategic reviews and long-term planning, they need to look at digital development as more than administrative overhead. Digital development should be considered as part of every strategic initiative. CIRA offers this report and Unconnected as essential conversation starters.
About CIRA
CIRA is a member-based, not-for-profit organization best known for managing the .CA internet domain on behalf of all Canadians, with more than three million registered .CA domain names. CIRA builds programs, products and services that leverage all the internet has to offer to help build a trusted internet for Canadians.
At CIRA, we do everything we can to help Canadians thrive online. Our team works hard to ensure that the internet is a force for innovation, connection and trust. But we recognize that the benefits of the web haven’t been shared universally. That’s why we contribute our expertise, resources, and convening power to help solve the internet’s problems through our Community Investment Program, including:
- Grants for community-led internet projects, such as Indigenous-led internet service providers.
- Free tools to protect Canadians online, like our Canadian Shield service.
- Projects that promote fast, resilient internet access, like our Internet Performance Test.
- Events to engage Canadians in important internet policy debates, like our Canadian Internet Governance Forum Talks series.
Appendix A: Twenty funders were interviewed for this project, with one wishing to remain anonymous. Participating organizations included:
- Canada Council for the Arts
- Canadian Tire Jumpstart Charities
- Centraide du Grand Montréal
- Cisco Canada
- Community Foundations Canada
- IBM Canada Ltd.
- Inspirit Foundation
- Indigenous Peoples Resilience Fund
- Internet Society
- J.W. McConnell Family Foundation
- Laidlaw Foundation
- MakeWay
- Mastercard Foundation
- Medavie Health Foundation
- Mozilla Foundation
- Ontario Trillium Foundation
- RBC Foundation
- Real Estate Foundation of BC
- United Way of Calgary and area
Appendix B: NetGain Partnership case study
Funders in Canada say they want to collaborate to support digital development, learn more about digital inequity and establish a strategic vision and community of practice, similar to collaborations in other countries. NetGain Partnership, in the US, is a good example of funders coming together and pooling resources.
In 2015, NetGain was founded by the CEOs of a small number of foundations, and launched as a unique initiative to advance digital rights. Today, it’s supported by eight partners who share principles and strategies: the Ford, MacArthur, Knight, Mozilla, and Skoll foundations, as well as the Omidyar Group, Open Society, and the Wallace Global Fund.
Each year, they select a strategic theme at the intersection of technology and philanthropy (such as how to strengthen tech talent in civil society or how to address the harms wrought by Big Tech), and they commit to learning together about an emerging topic at a systemic level, so that even if NetGain’s work isn’t aligned with an individual foundation’s program strategies, the partnership creates an environment for shared innovation and collaboration. The collaboration makes investments from individual funders more efficient and allows the group to address topics that are too large for any one funder to tackle alone.
More specifically, each NetGain partner pledges $500,000 annually, half of which is pooled and managed by Media Democracy Fund (MDF) and the remaining half of which is counted towards grants made by each foundation through its own grantmaking system and in alignment with the year’s NetGain theme. Not a member of the partnership but rather a partnership coordinator and convenor, MDF manages administrative and programmatic activities, including virtual briefings, commissioned research, communications, website management, and the design and management of the pooled grants fund.
NetGain activities include shared research and learning, including an annual learning retreat; regularly scheduled partner calls among program staff to discuss strategy; and grantmaking.
More information about NetGain and its activities and results are here.
