Nonprofits should see tech as a growth investment, not a cost center
Yet again, nonprofit leaders are looking for ways to do more with less. Nonprofits everywhere are facing extreme challenges like cuts to federal grants, political uncertainty and broad competition for donor dollars — not to mention a government shutdown with no immediate end in sight.
However, the right tech can help nonprofits not just survive but thrive. The right tech tools are not actually a cost center but rather an investment that drives growth and multiplies your ability to serve your constituents.
Keep reading to learn more about how nonprofits can implement an innovative, effective tech strategy to maximize impact even with limited resources.
Outdated mindsets make it harder for nonprofits to adapt
Nonprofits have traditionally approached tech reactively — searching for Band-Aid solutions only after a problem becomes too urgent to ignore. As a result, many nonprofits lack a coherent tech strategy, which means that leaders tend to see tech as just another painful expense.
This challenge is also made more complicated by the fact that most nonprofits lack strategic tech leadership in-house. Organizations frequently have a capable IT staff, but those team members are focused on keeping existing systems running, not rethinking how the nonprofit can use tech to better accomplish its mission.
During more flush economic times, your organization can probably get away with this approach. But as resources grow more scarce, tech is often the key to performing your mission with a smaller budget.
That’s why it’s so helpful to flip the script and start thinking of tech as an investment that will help your organization to serve more people, more effectively. The key to doing this is pursuing a holistic, big-picture tech roadmap that isn’t just about fighting today’s fire but rather building a foundation for your nonprofit to thrive over the next five to 10 years.
Start by questioning the status quo. Ask things like:
- What specific organizational problems are you consistently running into?
- How can you do things more effectively and efficiently?
- How are your current systems holding you back?
You don’t have to have answers yet, just be willing to consider the questions. And ideally, your whole team should be doing this, with open lines of communication to and from leadership.
Also essential: Understanding and communicating ROI
Another reason organizations struggle to pull off a successful tech upgrade is that many nonprofits don’t know how to estimate the ROI of tech investments. Nonprofit leaders may grasp the overall utility of better tech but struggle to show projected ROI to the donors needed to actually fund the transition.
One reason for this is that it’s often unclear where IT ownership falls within the organization. Ideally, the entire executive team should have some responsibility, but it’s also key to identify a technology champion and a governance structure that clarifies who is responsible for what — and many organizations haven’t done that.
This is one area where it can be helpful to work with an advisor. An advisor can both assess your specific needs and also help you actually put numbers behind your strategy to create a detailed, thoughtful plan you can take to your donors.
What tech solutions should nonprofits upgrade to?
The first step to upgrading your tech isn’t buying new tech. Far more important is to assess your organization’s specific needs to create a roadmap for your holistic tech strategy. Some nonprofits might need new enterprise software, while others might have many of the right tools already in place but need help connecting fragmented data sources.
A tech strategy is ultimately about strengthening your core processes, not accumulating the latest shiny toys. That’s why it’s so important to start with an innovative mindset and a clear governance structure to oversee a tech transformation within your organization.
However, there are also essential tech solutions that most nonprofits need. Some of the major ones include:
1. CRM (customer relationship management platform)
A CRM platform allows you to more easily connect with your constituents and donors. Nonprofits can use a CRM to oversee individual constituent or donor relationships, send to email lists, access contact information and automate many elements of communication. Some organizations may use an AMS (association management software) or volunteer management system for this purpose.
2. ERP (enterprise resource platform)
An ERP (enterprise resource platform) is a financial and operations system that offers your nonprofit clearer financial reporting and performance data and can integrate information from a host of different sources into dashboards. This saves your accounting team significant time and helps your organization to make smarter decisions based on a more accurate understanding of your circumstances.
3. AI and automation tools
AI is more than ChatGPT and Copilot. Fully leveraging AI means using more targeted tools that solve specific problems. For example, you might use an AI tool to build a website in minutes, or experiment with using an AI agent to fill out intake forms automatically. The real value here is usually automation, because if you can automate a lower-value task, you’re freeing up your team members to do higher-value work.
How does tech help nonprofits grow?
Implemented as part of a thoughtful strategic roadmap, a tech upgrade can help you scale up your operations, cut back on inefficiencies and better engage with both your constituents and donors. This gives you a foundation to not just survive challenging times but grow.
- Expanded reach: Let’s say you can use automation tools to cut down the time it takes to sign up a new constituent for a package of state benefits and services from 10 hours to one hour. Suddenly, your team may be able to serve significantly, perhaps even exponentially, more constituents than before.
- Cost savings: In the long run, better tech can actually save money. If you replace a dozen different Band-Aid software solutions with one new, integrated platform, you will spend more upfront — but may cut down your monthly subscription costs substantially once your new platform is in place.
- Increased donor engagement: You can use tools like a CRM to market your events or fundraising drives. Plus, donors like to see organizations running on effective, efficient tech, because it means more of their donations are going toward your core mission rather than operational overhead.
- Greater financial clarity: Better tech gives you more clarity into where your money is going and what your current financial picture looks like. This helps leaders make smarter strategic decisions and frees up your accounting team to do more useful, big-picture work like scenario modelling.
How do nonprofits create a culture of innovation?
Creating a culture of innovation or an innovation pipeline will help your nonprofit develop a more effective tech strategy and make better use of any new systems you do invest in. But how do you go about doing that?
It’s often helpful to host innovation workshops where you bring departments together to talk about problems and brainstorm if and how tech can help solve them. Having an ideas box can also be useful (if you actually pay attention to it).
But the most effective tools are simply listening and communication. Specifically, your leadership needs to ask the whole organization to explore new ideas and question established processes — and then actually listen to feedback that comes out of that journey.
Then as changes begin to take place, leaders need to continue to communicate. Your team needs to know what’s changing and why it’s happening. And this communication should be ongoing.
Taking this communication-centered approach will help your team to better identify problems, come up with creative solutions and implement those solutions in a way that delivers maximum benefit to your organization.
How Wipfli can help
We help nonprofits do more with less. Ask us to assess your needs and work with your team to upgrade your core processes so you can deliver greater impact with your existing resources to better serve your constituents. Start a conversation.
Let’s make your nonprofit stronger
