As the financial vice tightens on local governments, there’s a widespread assumption that technology can help agencies maintain critical services with less money and fewer employees. It’s true that automation done correctly can help, but there’s no avoiding the fact that it usually takes upfront investment to implement what ultimately may be money-saving technology. For local governments mired in the depths of a recession, that’s a tough proposition.

Colorado’s Statewide Internet Portal Authority (SIPA) -- a quasi-governmental organization that runs the state website -- is addressing this Catch-22 through a new program that gives micro-grants to the state’s cities and counties. The idea is to give away small, but vital, amounts of money to fund technical innovation through a very simple grant process. So far, it appears to be working.

In January, SIPA announced cash awards for 24 applicants totaling just shy of $100,000. Another 40 applicants were offered free services from SIPA -- things like website development, payment processing and Google applications. In all, 89 eligible government entities applied and 64 went away with something.

John Conley, SIPA’s executive director, says applicants tended to be small cities and counties in rural parts of the state -- many of which are struggling to meet basic technology needs. For instance, one applicant received $549 to buy an accounting program that will let the city post government spending information online. Another will receive cash to purchase GIS software to support 911 dispatchers.

“The average citizen would think these are fundamental services that governments already are supplying and funding,” Conley says. “But if you’re doing zero-sum budgeting, even small amounts of technology spending mean a city council may need to cut somewhere else.”

Other projects go beyond meat-and-potatoes software purchases. One small town won $8,000 to buy video gear to conduct telemedicine appointments. And $1,350 will help launch online class registrations in another rural village.

All awardees were chosen with an eye toward incenting further e-government innovation, but pressure for results was kept intentionally low. Grant applicants needed their elected official’s blessing to apply -- local leaders must sign off on what’s called an "eligible governmental entity" agreement--but the SIPA money comes with lower expectations than funds carved painfully from city or county budgets. Indeed, some of the projects may fail -- and that’s OK, Conley says.

"We want every applicant to succeed, but if two or three or five of them don’t, we’re still getting people to think creatively," he says. "We’re going to accept a level of failure, because we want them to take those lessons learned and use them on their next project. This is intended to be an incubator of innovative thought in local, rural governments."

Befitting the small grant amounts, SIPA kept the application process as simple as possible, asking just 13 questions designed to be answered in less than an hour. The cash comes from leftover budget money the self-funded authority has amassed over the past five years. SIPA, which supports itself through fees on electronic driver’s license renewals and other Web transactions, intends to plow that money back into communities through the grant program over the next few years.

"I grow weary when people think government doesn’t work anymore," Conley says. "This is a way to show that this stuff does work if you put some resources in the right hands."

In other words, a little bit of help from SIPA might go a long way.