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Finding the money for technology

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Ret Boney

Almost 10 years into the 21st century, technology is becoming a core part of doing business for nonprofits, not only in the back office, but on the front lines of delivering programs and services.

But computers, websites, software and the training and maintenance to keep it all working are expensive and can take a backseat to outwardly visible, mission-related activities like delivering food to the hungry or providing aid to flood-damaged neighborhoods.

Virtually all nonprofits have made baseline technology, like accounting software or email, a priority. It’s the enhancements, like a renovated website and marketing strategy designed to reach potential clients, that can be harder to fund.

While technology for technology’s sake can be a waste of money and energy, it is possible to find the funding for true technology needs, says Marc Osten, founder and senior internet strategist with Summit Collaborative in Amherst, Mass.

The key, he says, is to develop a powerful case statement and then make technology tools and strategies a top priority within the organization.

That’s true whether a nonprofit is trying to get funding allocated within its operating budget, or whether it needs to go outside the organization to raise money through gifts or grants.

Return on investment

“The entire thing comes down to positioning,” says Osten. “It’s only from the total value and total cost approach that an organization positions itself to make an informed decision.”

To quantify the value side of the equation, a nonprofit must look at the improvements it’s trying undertake, and then determine whether technology needs to play a role in that.

If technology is deemed a critical element, the group then estimates what Osten calls the “total benefits of ownership,” which goes beyond efficiency improvements, taking into account all related benefits, both tangible and intangible.

“To determine the total value of ownership, you have to be able to determine what the value is in improving collaboration, partnership-building, staff morale, fundraising, efficiency, etc.,” he says.

The flip side is determining the total “cost” of ownership, which includes hardware, software, planning and assessment, training and support, and maintenance and upgrades over time.

But don’t forget to calculate the intangibles on the expense side, too, says Osten.

Bringing new systems online can impact how work is done throughout an organization, and that can have likely, yet unintended, ripple effects.

“There are changes that are brought on by technology that aren’t about dollars and cents,” he says. “They’re about morale and employee retention. You can mitigate that if you’re prepared for it, but you can’t if you don’t know.”

With that detailed understanding of the return-on-investment in hand, it’s time for the organization to decide where the project falls in the hierarchy of priorities.

“If you do this work effectively up front, the dominoes are going to fall the way you want them to,” says Osten. “Really, the question is not about the money. It’s about determining whether there’s a rationale for you to do x, y or z.”

That’s as much about deciding when something is not a priority as determining when it is, says Osten.

“We’ve gotten to this point that there’s a general acceptance of technology,” says Osten. “We’ve got organizations that slip into bad habits, like ‘keeping up with the Joneses.'”

Budgeting

Traditionally, nonprofits lump tech-related expenses, from initial purchases through maintenance and training, into a single line item in the budget under administration or operations.

But that separation is risky, says Osten, given that it creates a gulf between technology and the organization’s sacred mission-based activities.

“It’s always easier to cut administrative expenses than it is to cut program,” he says.

Another result of distancing tech expenses from the mission can be that nonprofits don’t invest the needed amount in upgrades and training, and may be reluctant to seek out the consulting support they need to make strategic use of their technology.

Osten recommends each department within an organization determine its specific technology needs, then move those expenses out into departmental budgets.

Bridging that gulf between technology and mission also makes it easier to raise money in the first place, given that funders are better able to see the connections between operations and program, says Osten.

“You’ve got to tie technology to your program budget,” he says. “If you don’t have the dollars for the technology, you won’t be able to deliver the programmatic impact.”

Making tech pay off

Making the case for technology and raising the money to implement it are central, but it’s equally important to make sure the investment of time and money pays off.

Too often, says Osten, money that goes to technology is not followed up with the training and support needed to make it successful.

That not only means time and money wasted, but it can undermine relationships with donors.

“First, you never see the benefits of your investment,” says Osten. “And you won’t be able to go back and say ‘you’re dollars really helped move us forward.'”

Going beyond the dollars, a nonprofit’s working style, its DNA, will have an impact on the success or failure of an investment in technology.

“Organizational culture is where this stuff really begins and ends,” he says. “If the organization has a culture that values learning and deliberation, then automatically they’ll be thinking about how to leverage their technology investment. And when they talk to funders, they won’t be talking about tools, they’ll be talking about [mission].”

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