Fundraising vs. Operational Efficiency: Nearly Equal for Nonprofits
For many nonprofits, weighing improved efficiency and increased funding is complex. In fact, the two priorities are tied, according to the AWS survey: Increased donations or revenues were cited as a top priority by 44 percent of respondents, and improved efficiencies were cited by 43 percent. Nonprofits are asked to manage both in their balance sheets.
Luckily, digital transformation makes room for organizations to have both solutions. Fryhoff points to Share Our Strength, a charity that aims to end childhood hunger in the U.S., which has embraced a data lake solution, allowing the organization to work more efficiently while uncovering new opportunities.
"With all of their data now in one place, they are able to break down data silos and generate real-time business intelligence and visualizations to help understand specific giving trends and donor behavior,” she says.
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Digital Transformation: Turning Talk into Action
One notable finding of the study is that while roughly three-quarters of respondents have been able to integrate digital transformation into their processes, roughly a quarter struggle to do so at all. Nearly 21 percent of respondents talk about digital transformation rather than acting on it, and 4 percent rarely discuss it.
For Fryhoff, nonprofits with slower digital transformation journeys experience a combination of leadership misalignment, goal-setting delays, insufficient training and choice paralysis.
“A lot of the biggest challenges for nonprofits to move to the cloud aren't technical; they’re about people and culture,” she says.
Still, most organizations plan to move forward. Of those surveyed, 53 percent expect their cloud use to increase incrementally over the next two years, and 34 percent expect a larger increase in cloud use long-term.
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Who’s Leading the Conversation?
The report also breaks down where different types of nonprofits fare on digital adoption. Mature nonprofits are at the stage of “innovating and accelerating,” intermediate nonprofits are at the phase of “launching and learning,” and less mature nonprofits are just “embracing and embarking” on their respective journeys. For each stage of adoption, there’s a slightly different nonprofit technology that might work best.
Finding the right technology solution depends a great deal on who is driving technology decisions. The IT department is the backbone of every organization, and this team is particularly influential, especially for nonprofits at the “innovating and accelerating stage.” In the next one to two years, 47 percent of these kinds of nonprofits expect to markedly increase their spending in digital transformation tech.
For nonprofits who are “embracing and embarking” on cloud adoption, the IT team shares the responsibility with the CEO or executive director and the fundraising development team. For the respondents in this category, “60 percent expect to see a small increase in spending on digital transformation.”
Fryhoff says it’s important to see cloud computing as a cultural change and suggests that a common pitfall of cloud implementations is not engaging stakeholders throughout the organization.
“That’s because the cloud is more than traditional technology infrastructure,” she says. “It’s transforming entire organizations and industries and positively changing organizational models. Cloud helps solve organizational challenges, not just tech challenges.”