The mission-driven nature of nonprofits often masks the enormous challenges they face to be financially viable. Resources get stretched thin, and funding is unpredictable, making it difficult for some month to month. While fundraising donations have increased by 4.1% compared to 2022, inflation has caused the overall impact to be smaller. While many Americans generously donate their time and money, a tighter economy means less to go around.
Nonprofit sustainability is more than simply balancing the budget; it requires being competitive with for-profit businesses of similar sizes. Effective use of technology plays a crucial part, but knowing where to start and what solutions to use isn’t easy. That’s why many nonprofits are turning to a managed service provider (MSP) for help.
Nonprofit Sustainability Is an Ongoing Challenge
Nonprofit organizations are often dedicated to achieving various practical, social, cultural, and environmental goals. Even though U.S. nonprofits made up $1.5 trillion of the economy in Q4 2022, they operate within tight budget constraints, striving to maximize their impact with limited resources. The pursuit of sustainability, both in terms of financial stability and long-term effectiveness, is a constant challenge for most.
IT Mistakes Can Lead to Nonprofits Shutting Down
IT mistakes can have severe consequences on nonprofits. That includes operational disruptions, financial losses, and in worse-case scenarios, forcing them to shut down permanently. Mistakes can come in many forms, like lack of IT compliance, data management issues, or poor technology investments. Whether dealing with a data breach or someone simply deleting the wrong folder, IT mistakes can be costly without proper guidance.
MSPs Can Provide Expert Insight Into Nonprofit Technology
Internally analyzing and assessing technology is too complex for most nonprofits to do independently. Hiring an in-house IT specialist is too expensive, leading to some making the mistake of using cheap and ineffective solutions that ultimately do more harm than good long term. That’s why managed service providers (MSPs) have been critical to nonprofits. They have extensive experience in software, network management, cybersecurity, cloud computing, data analytics, and more.
How To Evaluate Nonprofit Sustainability
Evaluating nonprofit sustainability involves assessing various vital factors contributing to the organization’s ability to deliver on its mission over the long term. Here are some key areas to consider as part of the process:
1. Financial Health
A nonprofit is only viable long-term if it’s able to function within a limited and ever-changing budget. Maintaining a savings buffer is essential, especially with 30% of annual donations happening in December each year. That means not overspending during times of excess to make up for slower donation periods. It’s also why reviewing financial health is so important. That involves examining expenses, fundraising efficiency, operating reserves, revenue diversification, and future projections.
2. Strategic Planning
No matter the size, every sustainable nonprofit should have a strategic plan to act as a roadmap for smart decision-making. They outline the overall mission, vision, values, and steps needed to achieve predefined goals. Evaluating these involves looking at current progress and overall viability. Some organizations may need to rebuild their strategy if circumstances change or they lose money.
3. Technology Effectiveness
The effectiveness of technology plays a significant role for many nonprofits. It can streamline operations and free up staff time by handling routine tasks, improving overall productivity. It can also be a key part of fundraising, as having the right tools makes outreach either, helps with tracking donations, and ensure that fundraising reaches markets where it’s most effective.
4. Business Leadership
Every business, nonprofit or otherwise, benefits from having a solid leadership core. Since most nonprofits rely on donations and volunteer contributions, it requires a different touch than a traditional workplace. For sustainability, it’s vital to maintain staff morale, communicate clearly, and align day-to-day activities with the strategic plan. Mismanagement can lead to wasted time and resources, increasing the overall chance of failure.
5. Impact Measurement
Every nonprofit is created to serve a different purpose for others, whether a direct service or otherwise. That means a lot of their value comes from their positive impact on others. Measuring impact involves looking at all the current programs and services provided, the return for their cost, and how those connect with future initiatives. Ineffective ones may need to be cut or reworked, while others may need fine-tuning.
6. Resource Management
Resources can come in many forms, whether technology, donated goods, or a volunteer’s limited-time contribution. Effectively using resources is essential to nonprofit sustainability, as they rarely have the luxury to be wasteful or make many mistakes. Reviewing resource management means looking at past, current, and projected resources, how they’ve been utilized, and if there are any improvement opportunities.
The Value of Volunteers for Nonprofit Sustainability
The volunteer workforce is difficult to understand or use effectively, especially for larger or more complex nonprofits. Over 60 million Americans volunteered between September 2020 and 2021. The economic value of that volunteer work is around $122.9 billion. However, poor use of volunteer hours can cause many nonprofits to get less value for the contributed time. The role of technology with volunteers can vary by business, but everything from project management tools to communication software plays a part in using them effectively.
The Role of MSPs in Evaluations and Strategic Planning
Evaluating nonprofit sustainability can seem intimidating for any business. Fortunately, MSPs can provide support with evaluations and strategic plan development. Since they’re tech experts, they can offer expert input on everything from budgeting to impact measurement, making them a valuable part of the process. Once the evaluation data is gathered, they can use that to help nonprofits develop a technology roadmap to focus their resources on areas that provide the most benefit.
Let ITonDemand Guide You to Nonprofit Sustainability
Recognizing the complex nature of technology and the financial burden of hiring in-house IT specialists, many nonprofits have turned to MSPs like ITonDemand for expert insight into nonprofit technology. An MSP has extensive experience in software management, network infrastructure, cybersecurity, cloud computing, data analytics, and more. That gives businesses access to the necessary resources to navigate technology challenges effectively.