October 11, 2018; Government Technology
Funders shift their priorities and distribution processes for a variety of reasons. Some decide their own strategies will heretofore trump that of the grantees, others become addicted to philanthropic fads and fashions. Still others, like the Maine Technology Institute (MTI), shift to be more adaptive and to fit the needs of their grantees. Last week, with input from several stakeholders, MTI announced a major modification in their funding process, geared towards making the process easier for entrepreneurs and businesses in need of capital to grow. This example illustrates how listening to the needs of constituents can guide process decisions and improvements as a way of meeting and achieving an organization’s mission.
MTI as an organization is unique in several ways. It is a legislatively funded organization that works through a public-private partnership to build the economic capacity of organizations throughout the state of Maine. MTI was founded in 1999 by the Maine state legislature with the goal of providing services and investments that contribute to the state’s innovation economy. Since its inception, MTI has invested more than $230 million and leveraged nearly $1 billion in private matching support.
As a quasi-public entity, its governance structure and composition are different from traditional nonprofits, as is demonstrated by Maine’s governor’s role in appointing 10 of its voting directors. This board stewards its mission, and ensures that MTI meets its stated purpose, which according to the Maine Legislature revised statutes is to “encourage, promote, stimulate and support research and development activity leading to the commercialization of new products and services in the state’s technology-intensive industrial sectors to enhance the competitive position of the sectors and increase the likelihood that one or more of the sectors will support clusters of industrial activity and to create new jobs for Maine people.” Furthermore, it is subject to accountability and reporting, and is included in public evaluations such as the January 2018 Comprehensive Evaluation of Maine’s Research & Development and Economic Development Incentive and Investment Programs.
MTI provides critical support in developing infrastructure by distributing funds to support clusters of economic growth throughout Maine. MTI has a robust history of grants distribution and is responsible for the administering several million dollars funded by a voter-approved state bond. In April, for example, the organization distributed the remaining $10.9 million of the $45 million dollar bond dedicated to supporting and expanding Maine-based technology firms. The bond funded a program called the Maine Technology Asset Fund 2.0, which is managed by MTI and supports infrastructure, equipment, and technology upgrades for public and private entities. According to the organization, the total investment will generate 5,350 jobs and $1.37 billion in economic output for the state.
Given its role as a core component of the state’s economic development strategy, MTI is subject to pressures that many other nonprofits are not. Over the past year, the organization underwent a strategic planning effort, incorporating the perspectives and opinions of a wide range of constituents. Among the key findings, the planning process uncovered a disconnect in the application process. Specifically, many businesses seeking MTI funds found the process of requesting, soliciting, and receiving funds to expand their enterprises was too tedious and cumbersome. With set application periods, designated funds, and other requirements, many entrepreneurs did not have access to funding that they needed at the strategic times they needed it.
Examining this as an obstacle to meeting their mission, MTI proactively shifted their funding processes, with the goal of addressing these concerns. According to MTI’s president’s message regarding their new strategic plan, the new funding model allows for all funding opportunities to be accessed on a rolling basis and “replaces all of our existing programs including Tech Start Grants, Seed Grants, Cluster Grants, and Development Loans.” The truth for many businesses and enterprises working in technology is that they often cannot wait for months for funding to guide their business expansion activities.
Like other funders NPQ has reported upon that shifted funding processes through strategic planning feedback, MTI’s modifications are monumentally important for the organization to meet its mission. MTI’s focus on investing in rapidly changing technology sectors (biotechnology, composites and advanced materials, environmental technologies, forest products and agriculture, information technology, marine technology and aquaculture, and precision manufacturing) is critical to ensuring that the state has a competitive advantage for retaining businesses and talent regionally. This is especially relevant as many local and regional economic development strategies base their efforts on clusters based models (see the US Department of Commerce’s Economic Development Administration’s focus on clusters through the US Cluster Mapping Project, developed in partnership with Harvard Business School’s Institute for Strategy and Competitiveness).
By listening to feedback and understanding the strategic relevance of input gathered through the strategic planning process, MTI was able to make adjustments that will ultimately help it meet its mission by staying relevant. Nonprofits and funders that serve constituents from a wide range of communities can reflect on this example and this practice of integrating user feedback to drive process improvements. Using input to be adaptive, meet needs, and overcome obstacles can lead to being more mission driven.—Derrick Rhayn