Tag Archives: nonprofit software

How to determine nonprofit software costs

fundraising, FUNdraising Good Times, nonprofit technology, nonprofit software, donor software, software evaluation, SaaS, software pricingSoftware is at the heart of so many nonprofit functions. You can’t afford down time. And you don’t want to find out your new system won’t talk to an existing one after its up and running. What’s a nonprofit leader to do? In search of guidance we talked with Janna Finch of Software Advice an online firm that reviews nonprofit technology.

Here’s her suggestion. “Many vendors have developed their products to integrate well with commonly used third-party software—especially accounting programs—so look for a list on their website or ask a sales rep. The vendor’s developers should also know which products integrate well, which integrate with some work and which don’t integrate at all. If the product you’re evaluating doesn’t work with the programs you need, you can choose to operate them independently, evaluate different software, or replace the software you’re currently using with something you know will work with the new software.”

It’s one thing to purchase software, it’s another to manage it. Finch reminded us that the type of person a nonprofit needs to manage their technology “depends on the complexity of the system, your organization’s needs and whether or not the software is hosted on- or off-site. Usually, the larger the organization, the more complex its IT requirements.”

Yet with hosted services such as software as a service (SaaS) smaller organizations don’t have to worry about updates and keeping the system up and running. They now have access to high quality software without the maintenance responsibilities.

But there are still costs, and these are impacted by the pricing model you choose. According to Finch, “Both perpetual license and subscription pricing models have upfront costs, typically set-up and data migration fees. Sometimes new equipment, such as credit card readers, is necessary and that’s also an upfront cost. With regard to the perpetual license model, the license fee is also considered an upfront cost.”

“Beyond upfront costs,” she continued, “you’ll have recurring costs to cover support and upgrades, or, in the case of subscription software, the monthly or annual subscription fee itself.”

There are also annual costs which Finch points out vary wildly depending on a nonprofit’s size and the complexity of its software. Here’s some benchmark information. “The Nonprofit Technology Network (NTEN) determined that the average nonprofit spends 3.2 percent of their budget on technology. The smallest nonprofits can expect to pay, at minimum, about $500 (one-time) for a fundraising and donor management program installed on one computer, or as little as $30 per month for hosted software. Factor in an additional 15 to 20 percent of the annual license cost toward training, support and other costs.”

Take the time to make an informed decision. You can compare software systems and learn more at www.SoftwareAdvice.com

Have you read: Three ways to evaluate nonprofit technology

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Mel and Pearl Shaw are the authors of “Prerequisites for Fundraising Success” and “The Fundraiser’s Guide to Soliciting Gifts.” They provide fundraising counsel to nonprofits. Visit them at www.saadandshaw.com. Follow them on Twitter: @saadshaw.

Three ways to evaluate nonprofit technology

Part one of a two part series

Janna Finch, fundraising, FUNdraising Good Times, nonprofit technology, nonprofit software, donor software, software evaluation, Software Advice“The main reason nonprofits look to update or implement technology is to acquire additional functionality that will automate more tasks, which they hope will free up time to work on more strategic projects.” – Janna Finch

Technology plays a critical role in the life of nonprofits, large and small. Accounting, fundraising, social media, admissions, recruitment, ticket sales, and human resources are only a few of the areas that depend on technology solutions. To help you navigate the maze of software solutions we interviewed nonprofit market researcher Janna Finch. She works with Software Advice, a donor management and fundraising tech resource for nonprofits. www.SoftwareAdvice.com.

Here are Finch’s three suggestions for software evaluation.

  1. “Most importantly, write down what you and the people who will use the software need it to do. Be specific. “Automatically generate 3,000 annual giving statements and email them to recipients,” “support recurring donations,” “integrate with our current fund accounting software,” and “allow 11 staff members and volunteers to access the system at the same time” are examples of how specific you should get.”
  2. “Learn about the types of pricing models offered by software vendors and calculate the total cost of ownership (TCO). The two most common pricing models are perpetual license and subscription. With a perpetual license, you typically pay a larger amount upfront to cover the license and set-up fees, then a smaller amount (around 20 percent of the license cost) annually for periodic upgrades and support. With subscription pricing, those same costs are spread out and paid for in smaller amounts monthly or annually for as long as you use the software. Subscriptions often start around $50 a month, but can scale much higher.”
  3. “Finally, you need to make sure that everyone who will use software can use it. To do this, take advantage of vendors’ demos and free trials to give the software a test-drive before committing. It may look like the perfect solution on paper, but hands-on experience may uncover that it has a learning curve greater than expected. If that’s the case, look at different software or add training costs to your budget.”

But, how do you know when to migrate to another platform? Here’s what Finch has learned from working with buyers. “There are a few situations when you should consider scrapping what you’ve got for a new vendor or product. The most obvious time is when a vendor goes out of business or stops supporting the product you’re using. Another is when your operations have outgrown the software’s capabilities and your options for customizing it are limited or cost prohibitive. Nonprofit professionals I talk to sometimes mention that unhelpful or unpleasant customer support is the reason they’re considering a switch.”

Next week: how to determine nonprofit software costs

Mel and Pearl Shaw are the authors of “Prerequisites for Fundraising Success” and “The Fundraiser’s Guide to Soliciting Gifts.” They provide fundraising counsel to nonprofits. Visit them at www.saadandshaw.com. Follow them on Twitter: @saadshaw.