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Report underscores nonprofits’ need for technology investment

Is your nonprofit organization considering a big investment in new technology? If so, you probably have a lot of questions like:

  • How much should we budget for this?
  • Who needs to be involved in this decision?
  • Which products make the most sense for us?
  • What have other nonprofit organizations done?

We now have a good answer to the final question—and that may help answer the others.

The 2024 Nonprofit Digital Investments Report by Heller Consulting and NTEN sheds light on some of the priorities and pressures nonprofits have today around technology investments.

More than 300 nonprofits were surveyed for the report, encompassing a diverse range of missions, staff sizes and budgets. The aim was to understand “how nonprofit teams make decisions about technology spending, the prioritization of projects, and the balance of internal and external needs.”

You’ve probably heard the adage that the nonprofit industry is a good decade (or two) behind the corporate world in terms of technology. You’ve also likely noticed the incredible speed with which technology is now advancing.

That’s why understanding where nonprofits truly are today—in their attitudes and practices around technology investments—is so important.

Here are a few of the many findings of the report:

How technology projects are underfunded matters

Nonprofits are investing in technology projects, but they are underinvesting in success.

For example, training is roughly just 1% of technology budgets. And nonprofits often do not report on or discuss technology spending with the external stakeholders whose support could be instrumental in producing improved technology solutions and practices.

 

 

Most nonprofits feel they’re spending enough (or too much)

With the above in mind, it is somewhat unfortunate that the majority of nonprofits surveyed (55%) feel they are already spending about the right amount or too much. Only 45% feel they should be spending more, and 77% of that group feel constrained by their available budgets.

 

 

The need for technology investment is widely recognized

While the report highlights some areas for improvement in how nonprofits invest, it also makes clear that nonprofits take the need for investment seriously. Roughly 3 of 4 respondents (73%) include technology planning in their strategic plans either explicitly or generally.

 

 

Data and data systems are the highest focus for current tech investments

Nonprofits will need high-quality data systems and data sets before they can truly begin to explore mission-supporting AI tools. So, we may have AI to thank for an increased focus on data in recent years.

The number of organizations placing a priority on data and data systems has nearly doubled, from 22% prior to 2020 to 43% in 2023-24. Going hand in hand with data is an increased focus on security—up from 14% before 2020 to 41% today.

 

 

Nonprofits are also prioritizing efficiency

There is a common perception that nonprofits are only willing to invest in products that support fundraising. However, the report found a strong interest in technology investments that can help staff accomplish more by becoming more efficient, regardless of the department they sit in.

“Improving inefficient processes” (75%) and “saving time for staff” (61%) were the highest priorities for decisions about technology.

 

 

All in all, the findings from the 2024 Nonprofit Digital Investments Report emphasize a critical crossroads for nonprofit organizations regarding technology adoption. Despite budget constraints and a cautious approach to spending, the data underscores a clear recognition of the importance of technology.

As a nonprofit leader, it's essential that you not only keep pace with technological advancements but also ensure that your investments are strategic, well-informed and aligned with your organization's mission. This includes making a concerted effort to allocate sufficient resources towards training and development, which can significantly enhance the effectiveness of new technologies.

Remember, technology is not just a cost to be managed but a strategic tool that can propel your organization towards its goals.

Daniel Buckley

With nearly two decades of experience in nonprofit fundraising and digital marketing, Daniel is an expert at crafting omnichannel strategies that build relationships with donors and help organizations increase their reach. Daniel joined RKD Group in 2024 as Associate Director, Digital Strategy.

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