Fundraising for technology really isn’t such a mystery. Follow a few simple rules and you are likely to succeed:

  • Relate it to your mission
  • Talk about the project in client-centric ways
  • Have a clear plan for implementation
  • Set aside money for long term maintenance
  • Get recommendations from a professional
  • State it as a capital investment

This last is the subject of today’s post. Non-profits need to make it clear that any external funding will be supported down the line by operational costs that are provided by stable revenue streams. This isn’t particularly difficult to do with “traditional” technology projects. It costs $X to design a website, $X to buy and install a file server, $X to purchase and customize an off-the-shelf database solution. Long term support and maintenance for the entire infrastructure is generally a tiny percentage of implementation costs and, in my experience, represents less than or about equal to 5% of the organization’s budget.

But “traditional” technology isn’t what nonprofits need. They need on-demand computing. They need services based in the cloud. The need databases that are customized as needed and sold as a service. They need to be as agile and connected as possible. SaaS, cloud computing, and similar consumption based services are the future. The problem is, they make capital investments operational costs. This is great for for-profit enterprises. Spreading large costs over a number of years has obvious benefits when you are paying for it yourself anyway. But the same does not hold true for non-profit organizations.

Donors just don’t won’t to fund operational, long term, costs. From their perspective it makes perfect sense — even a nonprofit organization should be self sufficient. Money should be reserved for increasing the reach and breadth of services offered, not for paying for office supplies and basic support. SaaS often does help organizations achieve their mission and increase services — and it can do it at a lower cost and with greater efficacy — but how can we communicate this change with investors?

And even if we can convince investors, the perceived risks of moving to a hosted solution may prevent nonprofits from doing so. After all, capital investments can be seen as more flexible. A server can limp along for five or six years after its scheduled replacement date, and support can (and, trust me, is) easily dispensed with in tough economic times. On the other hand, hosted systems have definite expiration dates. The amount of money may be the same either way, but up-front costs are often more attractive to the risk-wary non-profit.

I’m not sure what the solution is, but it is clear that education must begin soon if non-profits are going to jump on-board with the reliability, cost, and efficacy benefits SaaS can provide. We need to work with funders to help them understand the risks and benefits of a new kind of computing.

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