Updated May 05, 2022
Over the course of the COVID pandemic, many nonprofits had to create quick solutions for working remotely and implement creative ways to continue serving their communities. Now that remote work is here to stay, organizations are taking the time to research cloud-based software that will upgrade their current processes and support their efforts over the long run — not an easy task.
To complicate things further, organizations must also ensure that they get buy-in from the board for their software selection. Many nonprofits have minimal funding available for such a project, so making a major software investment is difficult without additional financial assistance. The board or major donors may be willing to direct their annual gifts toward technology improvements or may be able to provide other revenue sources that can aid in a system overhaul.
However, board members and donors want to know that the money they invest in the organization for cloud technology will provide a high ROI, and they want to know that you made the savviest and most cost-effective choice when finalizing your software selection.
There is a sea of options among cloud business applications and trying to evaluate them can be overwhelming. To help you simplify your search, here are five factors to keep in mind.
Not all cloud solutions are the same. You want to choose software that was “born in the cloud.” This means the software was developed specifically for the cloud, and it’s going to perform better than a traditional legacy computer system that was upgraded to work with the cloud. If the legacy system was built to be on-premises originally, it’s not likely as easily connected to other business applications.
Examples of cloud-native software include Sage Intacct for day-to-day accounting, Workday Adaptive Planning for budgeting and reporting, and Salesforce for donor or grantee management. These platforms, and others like them, are designed for a web browser and mobile interface. A platform that provides a fresh, modern and simple-to-use experience is what many workers now expect when they adopt a new platform.
Multi-tenancy is when you have a single software platform that can serve multiple groups of users (or “tenants”) in different ways. Your view and usage of the platform is highly configurable to your needs, and your nonprofit’s data remains isolated and secure, even though users from other organizations could access the same software platform.
This means you can securely tailor your own environment but will be able to leverage the power of shared infrastructure through cloud computing. You also don’t have to worry about upgrades and falling behind on versions, because a multi-tenant system is structured so that every client is on the same version and upgrades are automatic.
This saves your nonprofit money, because you don’t need internal IT personnel to fix and maintain your system and servers, and your finance team doesn’t need to budget and plan for annual upgrades. You can also save by only paying to access the specific tools or resources you need, and the software scales when your needs become more complex. Finally, having all development efforts on a single code base within each system allows each software vendor to deliver innovation much more rapidly.
Best-in-class software is designed to serve highly specific needs in one discipline or area of business. For example, best-in-class tools designed specifically for accounting, planning or membership offer deep functionality, choice and flexibility as your organization evolves.
An all-in-one software suite is your other option, but it’s generally not as efficient or cost-effective as a best-in-class solution because it includes applications for many different business functions (payroll, human resources, operations, accounting, etc.) for which you may already have software solutions in place. Best-in-class software allows each department in your organization to make the best choice for its needs and maximum performance. It also reduces your risk of becoming overly dependent on one software vendor.
Nonprofits often work with business applications that address unique industry needs such as managing donors, grantees, members and other stakeholders. It is important to have modern cloud accounting, planning and payroll systems that easily integrate with your nonprofit software solutions through an open API (application programming interface).
For example, many nonprofits rely on Salesforce to track donors, programs or grantees. When your financial management system is also in the cloud, integrating the two becomes easier and saves time while improving data integrity by reducing manual work. Ease of integration should be a key consideration in your move to the cloud.
The nonprofit business model is unique and requires software functionality designed for your industry. You need someone that understands the differences in the business models — such as a foundation, a social service organization and an independent school, for example — as those three types of nonprofits have very different needs when it comes to tracking and reporting on revenue and fund balance. Without that technical expertise, you may end up relying on stand-alone solutions or spreadsheets to fill the gap. This can create data silos and increase the amount of manual work necessary. The cloud software vendor you choose should have nonprofit industry expertise and be able to provide you with multiple customer references.
These five points can help you quickly narrow down your list of potential software candidates. Ask vendors your questions, make sure you understand their platform’s features and what integration will look like, build consensus within your organization on your final selection, and then make your business case to the board. Before you know it, you’ll be reaping the benefits offered by the cloud.
Need help with the selection process or have questions about how to choose the right cloud solutions to scale with your organization? Contact our nonprofit experts
