Women And Minorities Are Leading The Charge For Socially Impactful Tech

"The most successful founders typically have social experience with the problem at hand."

Women and minorities are leading the way for tech companies that pursue social good, a new report from Fast Forward shows.

Fast Forward, a "startup accelerator" that exclusively helps boost nonprofit tech companies, recently unveiled a report titled, "The State of Diversity and Funding in the Tech Nonprofit Sector." In it, the report identified a far higher percentage of minorities and women who had founded tech nonprofits than those who founded traditional tech companies. 

"Entrepreneurs typically build tech for problems they've personally experienced," Christina Shatzen, a co-author of the report, told A Plus in an email. "Most often, women and people of color are the individuals who experience social issues first-hand, so it makes sense that they would lead the charge in building the tech products to deliver solutions to these problems."

Below is a chart from the report that visualizes the number of women and minorities in tech nonprofits vs. tech for-profits.

Fast Forward
Fast Forward

Shatzen defined tech nonprofits as a "tech company building original hardware or software, but leveraging a 501c3 nonprofit model so they can focus 100 percent on social impact." Specific examples of tech nonprofits that Shatzen offered were Wikipedia and Khan Academy.

The report pulled information from an online database called The Directory, which shows off the finer details of tech companies like their founder demographics and budget size. Fast Forward looked at information on 348 groups in The Directory, and also pulled information from CTO's for Good, Fast Company reported.

According to the report, 47 percent of all nonprofit tech founders are women, compared to just 17 percent at more traditional tech startups. Minorities made up 30 percent of the nonprofit founders, but just 13 percent of the founders in traditional startup fields. 

"What we've seen in our work funding and supporting social entrepreneurs at Fast Forward, is that social issues are inherently harder to solve," Shatzen said. "And the most successful founders typically have social experience with the problem at hand."

84 percent of the tech nonprofits that Fast Forward has funded have a founder or co-founder who is a woman or person of color. Shatzen listed Alexandra Bernadotte as a prime example of someone who created a company to solve a lived experience. She immigrated to the United States from Haiti, fought to get into college and become a first-generation college student in her family at Dartmouth.

Fast Forward
Fast Forward

But Bernadotte discovered that college was actually more difficult than getting in, and she had trouble acclimating to the college environment. Once she overcame her challenges and graduated, she founded Beyond 12, a nonprofit company that leverages technology to help other first-generation college students graduate on time. 

"Alex is building a tech solution to this issue because it's something she deeply understands," Shatzen said. "She is able to build the right product for other students like her because she's been in their shoes." 

The report also picked up on some trends related to what kinds of people had the largest breakthroughs in funding in what industries. Women and racial minorities broke the $1 million funding threshold more often than white men in health care and public service, while white men raised $1 million in funding at a higher rate than women and minorities in sectors like human rights and education.

Shatzen said she was surprised to find that while gender and race may indicate what industries tech nonprofits were fundraising in, they did not strongly impact the amount of funding raised for a tech nonprofit. 54 percent of all tech nonprofits had less than $500,000 in funding, and only 34 percent had budgets over $1 million. 

"We were also surprised to find that despite more diverse founding teams, the technical staff at tech nonprofits is only marginally more diverse than tech teams at the world's leading tech companies," she said.

Cover photo: Shutterstock / Mark Nazh

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