Now is the time for philanthropy to invest in closing the digital divide

Just 0.05% of philanthropic funds went to digital equity in the last decade. That has to change.

Now is the time for philanthropy to invest in closing the digital divide

This piece by Chris Worman was originally published by Philanthropy News Digest. It is based on a Connect Humanity research brief written with analysis and data from Candid.

An unlikely hero of the COVID-19 pandemic? The parking lot. Sitting in cars by shuttered schools, fast food restaurants, and libraries across America, children without internet at home were able to connect to Wi-Fi to access online classes and continue their schooling.

The crisis demonstrated not only the scale of the digital divide that remains across the United States—more than 120 million Americans still don’t use the internet at broadband speeds—but underlined how critical internet access now is to so many of life’s essentials, including health care, remote work, and, of course, education.

To understand how the COVID-19 crisis affected the work of civil society, the nonprofit technology provider TechSoup surveyed its membership and found that, of the nearly 12,000 organizations that responded, four in five said their services were disrupted because their communities lacked internet access.

Nonprofits and funders take note: Whether you work on climate change or child health, hunger or human rights, your work is almost certainly impacted by those you serve having fast, reliable internet access (or not). As our economies digitize, access to government services, education, and work will increasingly require digital access. Quality of life for those without will suffer. And, as the basic productivity tools that nonprofits and foundations rely on move to the cloud, our ability to operate as a sector will be compromised by lack of high-speed internet. Digital equity is, and will increasingly be, critical to the goals and aspirations of civil society.

How much philanthropic funding goes to addressing the digital divide?

Despite the critical importance of digital connectivity for civil society to do its best work, philanthropic funding to bridge the digital divide has not met the scale of the challenge.

New research based on data from Candid finds just 0.05 percent of giving from large U.S. foundations between 2010 and 2019 went to close the digital divide. That’s an average of just $15 million per year to address one of the great sources of inequality facing America.

While the internet plays an increasingly central role in our world, the level of funding flowing to digital equity causes has been fairly constant over the past decade.

just 0.05 percent% of giving from large U.S. foundations between 2010 and 2019 went to close the digital divide
Total funding dollars and number of grants from large US foundations for digital divide causes

Taking three-year averages, large foundations awarded an annual average of $15.6 million from 2011 to 2013, $11.3 million from 2014 to 2016, and $20 million from 2017 to 2019. That’s a slight increase in grant dollars across a decade in which applying for jobs, benefits, and bank accounts became an online task, remote work went from being a niche to a norm, and schooling and health care were digitalized. In other words, while the costs of being on the wrong side of the digital divide escalated dramatically, the funding to close it barely moved.

One caveat: because our dataset ends in 2020, this analysis does not account for the increase in funding to get people connected as the internet became a lifeline during the pandemic. Anecdotally, we know there was more funding for the digital divide–primarily for important but short-term solutions like hotspots. With all that at stake, we must use the renewed focus on the issue as a springboard for progress.

A 1 percent funding target to transform broadband in America

The philanthropic sector should consider scaling giving to close the digital divide from 0.05 percent of total grantmaking to 1 percent. It’s a big increase but from a small base. An investment on this scale would help ensure that all individuals and communities across the U.S. have the internet connectivity, digital tools, and skills they need to thrive in today’s world.

Funding for digital equity is catalytic and cross-cutting. It would help create jobs and grow businesses; make health care more efficient; create new opportunities for learning and personal development; and help government and businesses run services more effectively. Increased digital equity giving would help civil society organizations working across a range of issues deliver on their mission.

Broadening the funding pool

Meeting this 1 percent target will require many more organizations to include digital equity investments in their portfolio. Today, funding currently comes from a concentrated pool of foundations. Between 2018-2020, the top 10 digital equity funders contributed half of all dollars—$58.3 million. More than a third of this came from the Ford Foundation alone, which gave $20.8 million across 41 grants. As more foundations understand digital equity as intersecting with their priority issues, we can bring more funders to the table to fund connectivity.

Now is the time to get involved

Philanthropy has never had more opportunity to make a positive impact. The U.S. government is about to deploy $42 billion to expand broadband through the Broadband Equity, Access, and Deployment (BEAD) Program. Experience tells us that without civil society playing an active role, these funds are unlikely to get to the communities that need them most.

Funders have a role to play. Here are two key ways to help:

1. Provide matching grants. To win BEAD funding, communities must contribute a 25 percent match. The communities most in need rarely have that money to hand. Foundations can provide grants and other finance to help their communities overcome this barrier.

2. Fund digital equity master plans. To bring broadband to their area, communities need to create a broadband plan with the technical, financial, and market analysis to prove that a network is viable. They won’t get BEAD funding without one. Funders can finance these plans and ensure their communities are fully prepared to put in a strong BEAD application.

Stepping up support for this issue does not require foundations to become dedicated digital equity funders. Nor do they necessarily need to develop deep competency on digital issues. But they must understand how the digital divide impacts their goals and work with organizations that have the knowledge, programs, and relationships to get communities connected.

At this moment, funders have an unparalleled opportunity to shape the state of broadband in America, play a major role in closing the digital divide, and enable more progress across the many urgent issues we face. Together, we can get it done.

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