Re-evaluating Your Nonprofit Budget Is Vital To Incorporate Board Technology

October 28, 2020

Re-Evaluating Your Nonprofit Budget for Board Technology

Written by Lena Eisenstein

Regardless of what type of programs and services your nonprofit provides, and regardless of how large your nonprofit is, you need some type of technology to function in today’s world. Even if your board members aren’t tech-savvy, your stakeholders are. To survive and thrive, you need to be able to communicate and interact with the following individuals and groups electronically:

Donors
Grantmakers
Vendors
Volunteers
Members
Affiliates
Peers
Community members
Employees

Budgeting is an important issue for nonprofits. Donors and grant-makers are looking for proof that your nonprofit manages its money well before they’ll make a commitment to supporting you. Technology can be a bit of a double-edged sword for nonprofits. You need it to function, but you don’t want to invest in technology so much that donors might view it as wasteful.

So, how much should you be spending on technology? How much is too much and how much is too little? More importantly, how can you justify to your supporters that your board is making prudent decisions about your spend on technology?

Part of the answer lies in keeping your budget for technology in line with what nonprofits of a similar size spend and the other part of it depends on helping your donors and stakeholders understand how the right technology provides efficiency and security for your nonprofit.

What Do Other Nonprofits Spend on Technology?

The 2017 Nonprofit Technology Staffing and Investments Report gives your nonprofit board some solid data to help you understand what nonprofits of a similar size are spending on technology. The report classifies nonprofit organizations into the four categories of struggling, functioning, operating, and leading.

Here’s a snapshot of what each category spends their technology budget on and the percentage of their budget they’re using for it:

Struggling. 6.53%-The nonprofits in this category acknowledged that they’re struggling with technology. Their infrastructure is failing. They’re spending much of their budget on workarounds and repairing outdated or old equipment. These types of problems cause them to have to spend time duplicating tasks.

Functioning. 22.86%-Their systems are hanging on with the minimum. They have the basic technology to support their immediate needs. Their board makes the decisions around technology and they focus on efficiency. Most indicated they weren’t likely to get input from a consultant of their staff.

Operating. 50.2%-This group of nonprofits claimed to have a stable technology infrastructure. They were likely to have established a specific set of policies and practices around technology. The board and leaders make technology decisions based on industry standards. Many of them had taken steps to get input from technology experts or consultants before making decisions about technology investments.

Leading. 20.41%-This category of nonprofits considers themselves to be innovators. They realize that it’s vital to invest in technology. They’re inclined to incorporate technology costs into their strategic planning. Their boards are continually following technology trends and tools that pertain to the nonprofit world. They’re deeply committed to using technology in the best ways possible to fulfill their missions.

Size also plays a factor in how much nonprofits typically spend. Here’s a chart of how the report classified nonprofits by the size of their overall budgets:

Small < $1M
Medium $1M < > $5M
Large $5M < > $10M
Very large > $10M

This is an actual dollar figure of how much money the various size nonprofits spend annually on average on their technology efforts:

Small $7,595
Medium $45,184
Large $101,064
Very large $235,445

Finding the Right Balance with Your Nonprofit Technology Budget

You’ll be more successful with budgeting for your nonprofit when you take a proactive approach to identify the programs and services you need and ensuring that you have the right security measure to support them. A laid-back approach can get cost you money and maybe even get you into legal trouble.

Here are some of the more important things to focus your technology budget on:

A backup and redundancy plan. Your nonprofit collects and stores data for your donors, constituents, employees, and volunteers. Spend some of your technology budget on making sure you have a redundancy plan for your data.

Security. Before you implement any type of technology, make sure that you have the proper security measures in place to protect it. Nonprofit organizations can and do get hacked.

A board portal system. A board portal system is a wise investment because it gives you all the features you need to run your board efficiently and effectively.

When you choose BoardEffect as your board portal provider, you also get state-of-the-art security. That means you don’t have to invest in separate security systems in addition to it. BoardEffect’s board portal system is a fully contained electronic platform that supports all of your board activities including creating board books, managing meeting minutes, collaborating, and storing documents.

The cost for your portal is fixed which aids you in budgeting for technology. With BoardEffect, it will be easy for you to demonstrate to your donors and stakeholders that your board is making wise choices about how much you’re budgeting for technology.

Benefits of Investing in a Board Portal

Your nonprofit likely has a laundry list of things that you’d like to spend your technology budget on. A board portal system provides a single source technology solution for your board that’s cost-effective and efficient. It’s a great way to provide for your nonprofit board’s needs while stretching your budget for technology.

Here are some of the ways that your board will benefit from a board portal:

Strong, built-in security
Unlimited cloud storage
Monthly fee aids in budgeting
No upfront costs for equipment
Minimizes labor costs for adding and deleting users
Granular permissions
Lower costs for ongoing maintenance and support
Supports good governance
User-friendly and intuitive
Trusted by donors and stakeholders
Supports meeting planning and minutes

Regardless of how much of your budget you have to spend on technology, you want to get it right. With BoardEffect, you get all the features you need to fulfill your board duties responsibly, and you get them at a cost that fits just as responsibly within your budget.