Nonprofits can benefit from a leap in cloud technology
The nonprofit sector faces unique challenges and an online hub for data and services can provide a way out of today’s complexity
The non-profit sector is under pressure from all sides. Players compete with other charities for donations and funding, they must adhere to changing regulations, they must manage campaigns effectively and serve a large number of stakeholders with a modest number of internal staff. And like any other for-profit business, they must turn to technology for the automation, operational excellence and flexibility they desperately need.
And all the evidence we see indicates that they do. According to our 2023 research, 59 percent of British and American nonprofits say they are increasing technology spending and 23 percent say they are increasing that spending “significantly.” That willingness to invest also includes core systems: 57 percent plan to select or implement a new ERP within 12 months.
Developed on mostly modest budgets, nonprofits must modernize and harness the power of a technological leap forward. Paper-based processes or data islands on piecemeal software offer a poor combination for attracting staff or meeting complex needs. As with any organization, the constraints of legacy IT are a barrier, and like most organizations today, nonprofits are turning to the cloud for a unified approach to managing their operations. In our experience, for nonprofits, moving core services to the cloud is a matter of “when,” not “if,” and the cost of change is far outweighed by the cost of not changing.
The benefits of continuous software improvements, program and data integration, universal accessibility and utility-based pricing are a great fit for what nonprofits need today. But the cloud also offers opportunities for process transformation and a way out of the legacy.
Nonprofit Growth Director at Unit4.
Best practices
For nonprofits thinking about IT changes, our experience shows that there are some clear best practices to consider.
Organizations must first have a vision of their future situation and the reasons for transformation. They must also adopt a process-oriented approach, where thinking is guided by the need to make processes simpler and smoother. As owners of highly sensitive data, they need a clear plan on what data to collect, what to do with it and how to handle it securely.
Change must be iterative and driven by a formal approach to change management, as research from change management leader Prosci shows this will lead to a sevenfold improvement in the likelihood of success. We’ve seen a lot of success in hybrid technology change models, which involve an overarching waterfall model based on linear sequential phases, combined with sprints that boost morale and make iterative changes visible and tangible.
Smart nonprofits pursuing change should be led by business leaders and experts with change experience and realistic budgeting and resourcing plans. But they also need to involve their internal employees from the start, explaining the reasons for the change, what will change, how that change will happen, and how the changes will affect them. Internal teams should be heavily involved in workshops on designing and automating tasks because they are the ones who will be using these tools. Technology is crucial, but people and processes are even more important.
Change effects
Moving to the cloud and uniformly modernizing core systems is a boon for an industry that is often pressed for time and resources. Automation and well-coordinated processes are necessary to remove manual input from processes and limit the risks of staff burnout.
The unification of assets typical of a cloud implementation helps bring together the disparate aspects that nonprofits need, such as the need for greater stakeholder engagement, managing fundraising programs, and demonstrating accountability to regulators. Our research supports this by showing that digitally mature organizations significantly outperform laggards and lead to four times more motivated staff, three times better culture and double staff confidence in their employer’s future. Collaboration capabilities (so essential for what are often multinational and broadly funded organizations) accelerate by 28 percent and performance by 35 percent.
Cloud is also a good fit for today’s nonprofits where concerns are led by cybersecurity and data privacy, the ability to quickly add new programs, enable staff to work remotely, and integrate data to make gathering and analyzing insights easier . Just over half of nonprofits say they can collect data, but just under half are confident in their ability to analyze that data and track campaign effectiveness. By creating a central point for that data and a common data model, cloud ERP simplifies the process of going from data point to actionable information and capitalizing on opportunities in near real-time.
Simply put, nonprofits that use cloud ERPs can retain their people, keep them motivated, and do more with less. The nonprofit sector does wonderful things for the people who are most vulnerable in this world, but it is also a competitive arena where the efficiency of the digital data-driven world is desperately needed. Just as the slow adoption of technology has contributed to the collapse of many businesses, nonprofits must modernize and seize the day.
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