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Getting Nonprofits On Board With Technology
In 1985, I went to work at Monticello, the home of Thomas Jefferson in Charlottesville, Va. My office was in the 200-year-old Weaver's Cottage overlooking the vineyards that Jefferson had planted. Monticello lives and breathes history. And when I think about IT at Monticello during the mid-1980s, it seems pretty historic, too. The estate had only islands of IT usage: a bit of word processing here, an early accounting system there, even a custom-designed database that the archaeologists used to record their findings, such as pottery shards and other colonial-era trash.
Since Monticello, I have worked at the Phillips Collection, National Public Radio (NPR) and the Corporation for Public Broadcasting, each time installing or upgrading applications and, eventually, enterprise systems.
Sector Similarities
The first thing to note about nonprofits and for-profits is that, in terms of IT, there are more similarities than differences. When I joined NPR, I assumed that the general counsel did a lot of interesting First Amendment work (it was NPR, after all). But in fact, he spent most of his time on leases, employment agreements, phone contracts -- exactly the same focus as that of legal counsel at a for-profit. Only a small percentage of his work had to do with "sexy" NPR issues. The same can be said for IT work. Whether we work at a for-profit or a nonprofit -- we all need email, accounting systems and websites.
In two categories, there are major differences between nonprofits and for-profits. One is the nature of the equation: Revenue minus expenses equals net. In the for-profit world, the bottom line is the bottom line. For nonprofits, the action is in the expenditure line -- the money spent on the mission -- measured in terms of the dollars spent as well as the effectiveness of the programs. The other essential difference is cultural. Nonprofits are more likely to manage through consensus, so if a stakeholder doesn't support a technology project, dissent can more easily derail the endeavor.
Dollar for dollar, nonprofits are more complex. Consider two $10-million organizations, one for-profit and one nonprofit: While the for-profit provides different services (i.e., products), both organizations use the fee-for-service model. Nonprofits, however, have widely varying slices in the revenue pie: government support, individual giving, foundation grants, corporate support, among others. Revenue diversification has long been recognized as a best practice in the nonprofit world, but it comes at a price. Each one of those different revenue streams has different IT needs.
For example, to maintain government support, nonprofits have to focus on advocacy -- having experts who follow the issues, communicating to government officials and so on. There's a need for a good Web presence, work-sharing programs and real-time communication tools such as BlackBerrys. To target individual donors, on the other hand, a nonprofit needs customer relationship management tools much like those a for-profit uses for marketing and retail. For both constituents, nonprofits must use a dual strategy of online plus "on land," and they must process donations or payments securely.
Bringing Metrics to the Fore
In terms of fondation grants, sophisticated "philanthropreneurs" -- Bill Gates is the most visible -- want evidence of return on their effort. The Bill & Melinda Gates Foundation, for example, spends some 17% of its grants on exploring the results of its philanthropy.
Much like for-profits, nonprofits need to measure program effectiveness, which can be challenging. Water purity rates, reading scores and incidence of disease are all outcomes in the nonprofit sphere that can be measured. Driving technology to the "point of service" -- giving handhelds to doctors who collect birth weight information in health clinics, for example -- is an essential way for nonprofits to start effectively measuring outcomes.
New-style entrepreneurs are pushing nonprofits to better use technology so that these organizations can track results and deliver services. Great examples abound. One nonprofit uses supply chain management solutions to reduce waste in delivering humanitarian aid. Another uses Internet-based voting to determine allocation of grants.
Many obstacles -- from funding to culture -- stand in the way of more effective use of IT at nonprofits. But I'm optimistic. Major changes within the workforce will drive technology change at nonprofits. As baby boomers are replaced by a younger generation that is more tech-savvy, much of the resistance to technology will disappear.
Elizabeth Griffith is an associate managing partner in the Washington, D.C., office of Tatum LLC, an executive services firm.
Write to her at InsiderView@ciodecisions.com.
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