How Much Do Nonprofits Typically Spend on Technology?
Can technology transform the nonprofit sector? Yes, it absolutely can. Obtaining grants, donations, and other funding is becoming increasingly competitive. To stay ahead, nonprofits need to use technology to their advantage. This involves using technology to gather and present concrete data proving that they’re using donor investments to enact real change. However, very few nonprofits are successfully integrating technology into their organizational strategies. Much of this is due to lack of funding and difficulties accessing affordable resources. Here are a few examples of what the average nonprofit budget looks like according to the 10th Annual Nonprofit Technology Staffing and Investments Report:
- Very large nonprofits spend an average of $235,445 on technology.
- Large nonprofits spend an average of $101,064 on technology.
- Medium-sized nonprofits spend an average of $45,184 on technology.
- Small nonprofits spend an average of $7,595 on technology.
Although this may look like a lot of money at first glance, these numbers are significantly smaller when compared to the IT budgets of for-profit companies. Since nonprofits operate with tight budgets, they have to be calculated and purposeful when it comes to implementing new tools and updating their nonprofit technology helpdesk.
With this in mind, we put together this short guide to nonprofit technology budgeting. In the sections below we’ll elaborate on the different ways you can affordably fund your nonprofit technology needs.
What Should Be Included in a Technology Budget?
When discussing technology in nonprofits, there are specific tools and services that are absolute must-haves. Here are some of the top expenses you should consider when setting up your tech budget.
- Software: Nonprofits, just like for-profit businesses, need different software programs to keep everything running smoothly. This involves budgeting for software licenses and service subscriptions from third-party providers. Constituent Relationship Management Systems (CRMs) and Content Management Systems (CMS) are both examples of the types of software nonprofits need to invest in. We’ll dive into what each of these systems do later on in this guide. Although software expenses are unavoidable, nonprofits do not always have to pay full retail price for the best software. Organizations like Techsoup provide access to discounts and donations for various technology products and services for nonprofits. Learn more about Techsoup’s offerings here.
- Project Management: IT project management is critical for achieving your technological goals. Once your goals are outlined, you can begin to budget for specific IT projects. When it comes to these individual IT projects, nonprofits should factor in consulting, labor, administrative, and other project-specific costs.
- Hardware: All nonprofit organizations need to account for hardware technology expenses for their entire team to use. This includes paying for infrastructure updates, computers, phones, tablets, and any other devices necessary for your specific purposes.
These are just a few examples of what a nonprofit organization should consider when mapping out their tech budget. However, if you are struggling to figure out exactly what you need and how to achieve your technology goals, consider CIM. Our IT strategy and consulting services for nonprofits can help you with technology roadmaps, gap assessments, IT policy development, and more.
How Do Nonprofits Use Technology?
Although there is a wide variety of options when it comes to implementing technology in a nonprofit organization, here are just a few examples of how technology can be applied in a nonprofit setting.
- Email Marketing: Investing in email marketing technology is one simple but effective way to increase your outreach to constituents. When a nonprofit invests in an email marketing software, you have the ability to send personalized, automated emails that help spread your message. Email marketing can be used for volunteer recruiting, donation campaigns, and much more.
- Social Media Presence: Social media is one affordable way for nonprofits to establish a strong digital presence. Simply being active on your social accounts and showing off the good work your organization does can positively impact your donations. Additionally, for better fundraising outreach paid targeted digital ads can be used to increase your engagement even more.
- Content Management System (CMS): As we mentioned in the section above, a CMS platform is critical to your nonprofit’s digital success. A CMS is designed to help organizations create, update, and maintain their website. CMS platforms are especially important in regards to receiving donations and tracking how your constituents use your website. Lastly, CMS platforms are designed to help you manage the search engine optimization (SEO) of the content on your website so your information gets more traffic on the internet.
- Constituent Relationship Management (CRM): To keep track of your donors, volunteers, and other key groups you need a CRM. A CRM database stores all relevant information to help you track your relationships with constituents. Having all of this data in one central location allows you to focus on high-quality leads, create targeted messaging for outreach campaigns, understand your donors, and better serve your community.
CIM: Solving Technology Challenges for Nonprofits
We understand that nonprofit spending rules are different from regular businesses, and we take your unique needs into account. As your IT partner, we are dedicated to helping to achieve your ministry goals and making the most of your technology investment. Let us help you take your tech to the next level and connect with us today.