Technology Challenges for Nonprofits

Technology services for nonprofits can be a little like a toothache—it’s always on your mind, and you know you probably need an expert to help, but with a busy schedule, you might push through the pain and ignore the problem. Until, that is, you wake up one day in excruciating agony and can’t function. Not only is the issue more expensive to resolve, fixing it also disrupts your daily schedule and efficiency far more than it would have if the ache was addressed when you first noticed it.

The comparison falls apart easily, of course, especially when you consider the scope of effort involved. Solving a toothache isn’t exactly comfortable, but at the end of the day, all you probably have to do is sit in a chair and let an expert do the work. Nonprofit technology needs, on the other hand, often must be defined and addressed by the staff of the nonprofit itself, from choosing the tech to setting it up and learning how to use it.

Wait…is that really the only option?

At Computers in Ministry (CIM), we support all types of nonprofits (not just the ministry, though that’s where we got our start) in upgrading to better and more useful technology without compromising efficiency, results, or the budget. We have seen technology use in nonprofit organizations become a game-changer for incredible organizations, helping them do more for their communities with the resources they already have.

Keep reading to learn what nonprofits need to know about technology to achieve the same performance as Fortune 500 corporations without becoming one—and how we can help get you there without the toothache…uh, we mean headache.

What Challenges are Facing Nonprofits?

Before we nerd out about the potential of technology, let’s examine some of the common challenges facing nonprofits in 2022. Because even though the technology is cool and has interesting features, it is ultimately only useful to a nonprofit when it can address the following challenges in the way they show up for that specific organization.

Challenge 1: Remote Collaboration

A study by The Bridgespan Group and The Lodestar Foundation found that 91% of nonprofits participate in one form of formal collaboration, and 54% participate in two or more types. What’s more, 84% of funders said their dollars are spent in support of these collaborations.

There are four main types of collaboration nonprofits often manage, including:

1. Associations: Associations are partnerships with other organizations, including collaborations and collectives. These agreements are formalized by a contract, but each organization governs itself and its own work toward the goal.
2. Joint Programs: In these collaborations, nonprofits work together to deliver programming. Though each nonprofit still governs itself, the work on a specific project or program described in the contract is carried out together.
3. Shared Support Functions: Shared support functions are collaborations on the administrative side, where nonprofits unite to contract a vendor for mutual needs like accounting or human resources. This means a high level of integration with one another for vendor management, though each nonprofit may still be a unique entity.
4. Mergers: The highest level of collaboration is a merger, where the governance of two nonprofits are legally linked. They may form one new entity or work together as affiliates or with one organization as a subsidiary.

Challenge 2: Grant Tracking

Though some level of spending documentation is almost always required by funders of a grant, many nonprofits still struggle with accurate and timely grant tracking. This process is essential for nonprofits to prove to grantmakers that their dollars were used responsibly and achieved the mission and intention for which the funds were given. This starts with setting up a budget for the grant, then tracking how well the budget is followed.

Challenge 3: Time Management

Nonprofits operate with limited resources, and time is no exception. About 50% of nonprofit administrators reported they are not able to complete all their essential tasks every day. Even volunteer time tracking can be a challenge and limit efficiency. Since around 40% of nonprofits have 5 or fewer employees, managing everyone’s workload and leveraging volunteers is essential to pulling off meaningful work.

Challenge 4: Cost Management

Cost management is a challenge for any organization operating on limited resources. In a survey of over 500 US nonprofits, around 75% have less than $10 million annually to achieve their missions. That might sound like a lot, but considering the costs of doing good work on a large scale, every dollar counts. The same survey found that 58% of these respondents saw a decrease in their funding in 2020. Now more than ever, cost efficiencies are essential for nonprofits to rebound from the pandemic and continue doing good.

Challenge 5: Cybersecurity

Did you know hackers attack every 39 seconds? Inevitably, nonprofits end up as targets. The trusting nature of nonprofit culture and low technical literacy among staff and volunteers make these organizations especially vulnerable to email phishing and viruses hidden in free software downloads. These types of attacks increased 64% in 2020, and as a result, more than 60% of companies suffered a ransomware attack.

Challenge 6: Scalability

Lastly, a more positive challenge on our list is a nonprofit’s need to scale its services and bring support to more people. This need to scale is often temporary, surrounding keynote events or fundraising, with less support needed between initiatives. This means nonprofits face a unique need to ramp up and then dial down their staff, technology, and other resources.

Defining these challenges helps us explain the importance of IT for nonprofit organizations in context. Technology is a tool to solve problems—and we promise, affordable tech exists to solve the problems we just described.

How Do Nonprofits Use Technology?

Nonprofits use lots of different technology to address their challenges. Here are eight of the uses we help our partners achieve.

• Hardware: Maybe your nonprofit provides desktops, laptops, and mobile devices, or asks employees to bring their own devices. But it’s virtually impossible to do business today without internet-connected devices. And as much as using hardware is essential, cybersecurity comes right along with it.
• Volunteer Management: How are you tracking volunteer recruitment, training, and scheduling? Excel spreadsheets can do the trick for a while, but only when you have a small-but-mighty crew of volunteers. Once you have recruited more than a few dozen, the spreadsheet becomes a lot more of a burden than a benefit.
• Donor Management: When a donor or grantmaker asks for information, your organization needs to be able to respond quickly. But reporting and compliance is just one benefit of donor management software. These solutions also help you identify trends and even make recommendations for how to increase donations from current and potential funders.
• Customer Relationship Management (CRM): CRM platforms are powerful automation engines that automatically collect information from sources like email and your website. This data is then translated into notifications and recommendations for employees and volunteers, as well as automatic activities performed by the CRM. For instance, if someone makes a donation on the website, the CRM can send a thank-you email and also notify an internal stakeholder.
• Project Management: Whether it’s delivering daily services or planning an annual gala fundraiser, project management software helps centralize all the necessary tasks and documents progress toward their completion. Multiple people can access the platform, even external stakeholders, to keep everyone on the same page in real-time.
• Administration: Functions like HR and accounting are essential operations, but that doesn’t mean every organization has the same needs and processes. This is one area of technical potential where it’s worthwhile to compare and contrast solutions to find one that fits your workflow rather that being required to adapt to the features of a free software.
• Marketing: Social media is certainly a technology that everyone is aware of, but do you know how successful your posts and campaigns really are? What about advice for them to get better? Marketing intelligence platforms pull in data from every marketing channel you use to show your team what is working and what isn’t. This helps you make better use of everyone’s time and the budget at once.
• Communication: Communication through chat and video platforms like Microsoft Teams, Slack, and Zoom was a necessary adaptation in 2020. Even as social distancing initiatives get more relaxed, these tools and others can still enable better collaboration across distances—whether you’re working from home or just don’t want to walk down the hall to the next office.

Sometimes, the process of achieving these uses is a challenge in itself. That’s where a nonprofit technology strategy comes in. 

How Do You Develop a Technology Plan?

Now that we’ve described the challenges nonprofits face and the opportunities on the other side, you are likely wondering how to create the plan that helps you get from the struggle zone to your full potential. Here are the steps you can follow to develop a plan for improving your nonprofit’s digital maturity:

1. Form Your Nonprofit Technology Committee: Start with identifying colleagues, board members, and even volunteers or donors who have a unique perspective on your organization. Working together as a team through the steps that follow will help prevent blind spots in your nonprofit tech strategy. At the same time, it’s important to define each person’s role and responsibilities at the outset so it’s clear how final decisions will be made.
2. Evaluate Your Current Nonprofit Tech Stack: With everyone on board, start by taking a comprehensive inventory of every technology solution your organization uses, from your email platform to social media to donor management and beyond. No technology or application is too small to make it onto this list, even if it’s just used a few times a year.
3. Set Short-Term and Long-Term Goals: Now that you see what you have—what do you want to be different? Make sure to think about these responses in both the short-term and the long-term. By this time, the discussion will have revealed gaps in your tech stack compared to your processes. Talk through them and even rank them in priority to guide which must be addressed first to support future improvements.
4. Bring On the Budget: Please take note that the budget is step four, not step one. Yes, we know budget is a major concern. But starting the conversation with the budget places limits on what you think is possible based on what you THINK you can afford. Remember that many major software providers like Microsoft and Apple offer discounts to nonprofits. Other platforms have already been developed and priced with nonprofits in mind. And consultants like CIM also know other strategies to help you access industry-leading technology without the high price tag. 
5. Evaluate Solutions: Comparing different nonprofit technology solutions is about finding the perfect mix between features, cost, and options for future upgrades and scalability as the needs of the organization might change. Don’t be afraid to ask for demos, sign up for free trials, and ask questions to find the right tool for your organization.
6. Set the Timeline and Expectations: Once you have chosen a product or products you think are the best option, make sure it’s understood how long it will take to implement and any additional training employees and volunteers will need. This includes understanding what will happen to your historical data and other records.
7. Present to the Board: Last, it’s time to take the ideas to the board for approval! Be prepared to answer questions and maybe even revisit the plan again—but we don’t need to tell you that.

How Can Technology Help Nonprofits? Let CIM Help You Find Your Personal Answer

If all those steps sound like a lot of work, we have great news. One of the first steps in partnership with CIM is developing a custom Technology Roadmap for your organization. This is the pathway from your present technological state to the goals you identify. Once you and your stakeholders understand and buy-in to the Roadmap, we then carry out the strategy for you and stay committed to continuous improvement. As your growth creates new needs, we work with you to leverage innovation and keep your technology supporting your mission.

Can technology transform the nonprofit sector? As CIM continues our work, we know it not only can, but it will. We’d love to partner with you to help your organization adapt to the times and prepare for the future. Contact us to set up a free consultation and talk more about the solutions to your challenges.