Much of the waste comes from the grants management process. Although foundations typically require the same kind of data for decision-making, they want to see the data in their own peculiar ways. Nonprofits have to tailor each proposal to meet each funder's reporting requirements. Solpath will automate that process, converting data into various forms, in just a few clicks. It will also make it easier for foundations to track grant applications through the approval process and beyond, automating communications along the way.
This is not a novel idea. Microedge has been selling grants management software since 1985. It now controls about 85% of that market. But Microedge may be losing its edge. “Its software is old and clunky,” Jason jabs. “And it's hard to modify. Foundations have a tough time tailoring it to fit their specific needs”.
It also cost upwards of $200,000. Solpath, on the other hand, will cost foundations nothing. “Foundations should spend their money on worthy causes, not on software.” A proponent of Open-source software, Jason believes that all software should be free. Solpath's mission is to create the nonprofit sector's first open-source grants management software.
Although free is good, it's not just about saving foundations money. Since its code is transparent, Solpath's principal advantage is that foundations can install, modify, and build upon the software as they see fit. In fact, anyone can – which is also good news for the cadre of open-source techies who work with nonprofits.
Jason founded Solpath in January 2006, after two years of planning. Solpath signed up its first funder just ten months later. The funders are also the test cases, so funding has to be diverse. “We want to test Solpath in a range of environments to ensure that it's flexible,” Jason said. Solpath will recruit nine more funders to raise the $500,000 it needs to build and release the software. These will include community foundations and family foundations, which stand to gain the most. They are at the point where they need grants management software, but they also have limited funds.
So how does Solpath make money after it builds the software and gives it away? “We don't” Jason said. His ulterior motive is to open the door for the development of other open-source projects to serve the nonprofit community. For one thing, he has his eye on developing a content management system that's really easy for anybody to use.
In retrospect, this is all Penny’s fault. "I was always interested in 'causes'," Jason said, but his first real introduction to the nonprofit world was when he moved to San Francisco in 1997 with Penny, who was to become his wife. “I was interested in design and technology, she was interested in saving the world.” Jason got a job as a design director, and Penny joined a nonprofit.
“The inefficiency was actually way worse on the foundation side than on the nonprofit side. They didn't have to be efficient, they had a ton of money.”
“I saw what it took to get the funding they needed to pay their tiny salaries. It was crazy - the amount of time they spent begging for change from multi-billion dollar foundations was staggering. Then, once they received their funding, the amount of time they spent writing reports and conforming to each foundation's different criteria was equally ridiculous.”
When Penny made the switch from the nonprofit world to the foundation world, Jason got to see things from the other side. “The inefficiency was actually way worse on the foundation side than on the nonprofit side. They didn't have to be efficient, they had a ton of money.”
Jason was brought on board as a consultant at Penny’s foundation. While designing their grants system, he looked into what the options were for off-the-shelf grants management software. “To my surprise, the options were limited, and the software was bad and expensive. I knew there had to be a better option”. And four years later, there is one.