Depending on the nature of their mission, nonprofits face various common and unique challenges when trying to integrate technology into their organization’s strategy. The nonprofits that attended Pillar’s event highlighted a variety of issues they have faced in their digital transformation journey. Many of these issues overlapped between the nonprofits that attended and to be honest they have rung true with the nonprofit organizations that we have worked with. Below, we have summarized majority of the challenges that were voiced by the nonprofits and included some of our recommendations to best address these issues.
Data Tracking & Paper Processes
The main concern expressed by the nonprofits is that majority of their donor forms and data-tracking are completed through paper processes. For many nonprofits it may be the case that paper processes may be required permanently and cannot be moved entirely to the cloud. That being said, adopting a hybrid approach that involves maintaining their paper processes while still enabling real-time data-tracking and collaboration provided by moving to the cloud. Manual timesheets, donor forms, and other paper documentation can be read electronically, and then the relevant data can automatically stored into their organizational database. This greatly reduces the time needed for data entry and allows the management team to view the data of the organization at any moment. This is particularly useful for grant and donation reporting, as managers can clearly illustrate where and how each dollar and resource is being used by the organization at a moment’s notice. Nonprofits can almost entirely eliminate the time required for the organization’s data collection and grant reporting processes by adopting this hybrid approach.
A major realization of nonprofits at this event was the management of technical debt. Technical debt refers to the “debt” incurred by an organization when it neglects to stay up to date with technology for their processes. By choosing a cheaper and limited solution now instead of using a better and more expensive approach that would take longer to implement, your technical debt rises. The technical debt comes from the implied cost that is required to rework these “quick-fix” solutions in the future when they are no longer feasible to use. Having high technical debt is particularly troublesome for nonprofits as they have limited budgets and using their resources inefficiency will result in less than optimal impact for their mission. If technical debt is not repaid, it can accumulate interest, making it harder to implement changes down the road. To mitigate technical debt, nonprofits should be constantly evaluating their processes and the associated technologies, comparing to the best practices in industry.
Compliance and Reporting
Let’s talk compliance. A common challenge with the nonprofits present during the event was the difficulty to maintain proper compliance and governance for their organizations. Nonprofits must constantly ensure they are properly abiding by all government rules and regulations as well as any grant or funding guidelines they may have. Several nonprofits mentioned how the process of collecting the data for compliance paperwork was a tedious and intricate task that was not only frustrating but inefficient. A particular nonprofit even mentioned how due to the complex nature of grant approval, their organization missed out on a grant because they could not input the data on time. Technological improvements can be implemented to automate a nonprofit’s data collection and reduce the time needed to organize the required information for grant reporting.
High rates of employee turnover in nonprofits also presents technical challenges as new employees need to be constantly trained how to use the organization’s systems. Automating all possible tasks and making your technology infrastructure the easiest to use for your employees can help mitigate these challenges. Making all your technology interfaces and hardware as user-friendly as possible improves the productivity of each task and allows for your employees to get more done in the same amount of time. Easy-to-use processes allow for new employees to learn faster and make the job easier on your existing employees. Additionally, if a nonprofit can make training videos for all regular tasks, the training will be more effective and does not require another employee to use their time conducting the training. Making a single upfront investment to automate this process could save significant money and time for the organization over time!
Open Source Resources
There was confusion as to whether open source resources can work for nonprofits and if using open source resources is their most cost-effective route. There is no clear answer to this question as it is entirely dependent on what you need the application to do, your current technology infrastructure, and the technical expertise of your employees. When investing in technology for nonprofits, it is important to note that your most cost-effective option is the option that increases your organizational impact the most. If you are using low-cost open source applications that are not helping increase your impact or are introducing inefficiencies, you are most likely leaving money on the table. Alternatively, if you pay for an expensive and overly complicated software to complete a simple task, you have misused some funds that could have been used to further the mission. A good analogy used at the event to describe open source software: “Free open source software are about as free as getting a free puppy, it may not cost anything initially, but there a variety of costs associated with maintaining and owning it.”
Lack of updates on useful technological changes
Many nonprofits are currently unaware they be running on software or hardware that is out of date and no longer receiving support. If your organization is using outdated devices, they are not protected and are subject to security vulnerabilities. For example, when talking to a nonprofit manager at the event, she was unaware that Windows 7 had recently stopped receiving support in 2020, and that her organization’s data was currently at higher risk than a month prior. Nonprofits should be aware when their infrastructure stops receiving support and should be proactively planning to replace it before expiration.