Research Hub > Developing a Holistic Data Strategy for Nonprofits | CDW

December 16, 2024

White Paper
12 min

Developing a Holistic Data Strategy for Nonprofits

Nonprofit organizations manage an enormous amount of sensitive donor data, often with limited budgets and IT staff. To overcome these challenges, many turn to trusted third-party IT partners.

IN THIS ARTICLE

Technology plays an ever-increasing role in the nonprofit sector, and as a result, organizations are generating, storing, managing and protecting more data than ever before. This presents new fundraising and mission-oriented opportunities for nonprofits, but it also creates several new challenges — some of which mirror those of the for-profit sector, and some that are unique to nonprofits. Nonprofit leaders must carefully shepherd limited resources in making their investments, while also seeking to satisfy a wide array of stakeholders, including boards, donors, employees, volunteers and constituents. Emerging technologies such as artificial intelligence are creating opportunities for nonprofits to engage with their data in new and creative ways, but organizations must ensure that these solutions sit on top of a secure and reliable IT foundation. A trusted third-party partner is often key to helping nonprofits manage, safeguard and maximize the value of their internal data.

Learn how CDW can enable your organization to manage donor data.

Technology plays an ever-increasing role in the nonprofit sector, and as a result, organizations are generating, storing, managing and protecting more data than ever before. This presents new fundraising and mission-oriented opportunities for nonprofits, but it also creates several new challenges — some of which mirror those of the for-profit sector, and some that are unique to nonprofits. Nonprofit leaders must carefully shepherd limited resources in making their investments, while also seeking to satisfy a wide array of stakeholders, including boards, donors, employees, volunteers and constituents. Emerging technologies such as artificial intelligence are creating opportunities for nonprofits to engage with their data in new and creative ways, but organizations must ensure that these solutions sit on top of a secure and reliable IT foundation. A trusted third-party partner is often key to helping nonprofits manage, safeguard and maximize the value of their internal data.

Learn how CDW can enable
your organization to manage donor data.

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The Growing Role of IT in Nonprofits

In some ways, the challenges facing nonprofits are no different from those facing enterprise organizations operating in fields such as finance or retail. There’s work to be done. Workers need access to state-of-the-art technology to do their jobs, and organizations must thoughtfully implement tools and practices that will safeguard sensitive data. The infrastructure required to support, say, a video collaboration environment or a customer relationship management system is the same, whether an organization’s work is motivated by mission or money.

But in other ways, nonprofits face a unique set of challenges. Many have small IT staffs, limited IT funding and outdated technology infrastructure. Nonprofit leaders are responsible for identifying potential donors and maximizing donations, improving operations and service delivery, attracting and retaining top talent and more — all on tight budgets. Every dollar spent by a nonprofit must be accounted for and justified; nonprofit board members and donors may not understand how new IT expenditures will advance the mission of the organization.

Already, nonprofits rely on a wide range of technology solutions. Cloud-based donor management systems, for instance, have become essential for tracking contributions, managing relationships and coordinating fundraising campaigns. Many nonprofits also utilize data analytics platforms to better understand donor behavior, identify giving patterns and optimize outreach strategies. Artificial intelligence and machine learning are emerging as important areas for nonprofits to watch. AI and ML tools can automate routine tasks, identify opportunities for personalizing donor communications and possibly even predict future giving trends. As with enterprise companies, these automation tools can help nonprofits improve their overall operational efficiency, allowing them to focus more of their time and resources on mission-related work.

Cybersecurity solutions are critically important for nonprofits, whose data privacy needs might be considered even more pressing than those of enterprise organizations. Nonprofits must vigorously safeguard the financial information of their donors — just as businesses must protect customer data — or else risk potentially catastrophic damage to their reputations. Additionally, many nonprofit organizations operate in highly regulated sectors such as healthcare or education and may store sensitive information about the often vulnerable populations they serve, which could include children.

77%

At organizations where leaders say too little is being spent on IT, 77% say that available budgets present a hurdle to investment, while 47% identify a lack of grant or funder support as a barrier, 44% cite organizational culture and 12% say a lack of board support presents a challenge.

Source: NTEN, 2024 Nonprofit Digital Investments Report, April 2024

For many nonprofits, it simply isn’t feasible or cost-effective to internally implement, manage, monitor and refresh an ever-evolving IT environment. Working with an established, trusted third-party partner such as CDW can provide crucial advantages. CDW’s solution architects offer comprehensive IT support, vendor-agnostic expertise and decades of experience working to solve technology and cybersecurity problems for countless organizations across all sectors. These experts can help nonprofits navigate difficult technology decisions, ensure compliance with relevant regulations and implement solutions that align with their budgets and their mission objectives.

As technology continues to evolve — and as cyberthreats grow in both volume and sophistication — having a reliable technology partner can mean the difference between a smooth-running IT shop that serves the mission and a scenario in which an organization’s staff members are constantly forced to divert attention from their daily tasks to put out IT-related fires. In an effective IT partnership, nonprofits will be able to bridge the gap between their available resources and their technology needs, ensuring they can leverage modern solutions to maximize their impact.

Learn how CDW can enable
your organization to manage donor data.

The Growing Role of IT in Nonprofits

In some ways, the challenges facing nonprofits are no different from those facing enterprise organizations operating in fields such as finance or retail. There’s work to be done. Workers need access to state-of-the-art technology to do their jobs, and organizations must thoughtfully implement tools and practices that will safeguard sensitive data. The infrastructure required to support, say, a video collaboration environment or a customer relationship management system is the same, whether an organization’s work is motivated by mission or money.

But in other ways, nonprofits face a unique set of challenges. Many have small IT staffs, limited IT funding and outdated technology infrastructure. Nonprofit leaders are responsible for identifying potential donors and maximizing donations, improving operations and service delivery, attracting and retaining top talent and more — all on tight budgets. Every dollar spent by a nonprofit must be accounted for and justified; nonprofit board members and donors may not understand how new IT expenditures will advance the mission of the organization.

Already, nonprofits rely on a wide range of technology solutions. Cloud-based donor management systems, for instance, have become essential for tracking contributions, managing relationships and coordinating fundraising campaigns. Many nonprofits also utilize data analytics platforms to better understand donor behavior, identify giving patterns and optimize outreach strategies. Artificial intelligence and machine learning are emerging as important areas for nonprofits to watch. AI and ML tools can automate routine tasks, identify opportunities for personalizing donor communications and possibly even predict future giving trends. As with enterprise companies, these automation tools can help nonprofits improve their overall operational efficiency, allowing them to focus more of their time and resources on mission-related work.

Cybersecurity solutions are critically important for nonprofits, whose data privacy needs might be considered even more pressing than those of enterprise organizations. Nonprofits must vigorously safeguard the financial information of their donors — just as businesses must protect customer data — or else risk potentially catastrophic damage to their reputations. Additionally, many nonprofit organizations operate in highly regulated sectors such as healthcare or education and may store sensitive information about the often vulnerable populations they serve, which could include children.

For many nonprofits, it simply isn’t feasible or cost-effective to internally implement, manage, monitor and refresh an ever-evolving IT environment. Working with an established, trusted third-party partner such as CDW can provide crucial advantages. CDW’s solution architects offer comprehensive IT support, vendor-agnostic expertise and decades of experience working to solve technology and cybersecurity problems for countless organizations across all sectors. These experts can help nonprofits navigate difficult technology decisions, ensure compliance with relevant regulations and implement solutions that align with their budgets and their mission objectives.

As technology continues to evolve — and as cyberthreats grow in both volume and sophistication — having a reliable technology partner can mean the difference between a smooth-running IT shop that serves the mission and a scenario in which an organization’s staff members are constantly forced to divert attention from their daily tasks to put out IT-related fires. In an effective IT partnership, nonprofits will be able to bridge the gap between their available resources and their technology needs, ensuring they can leverage modern solutions to maximize their impact.

77%

At organizations where leaders say too little is being spent on IT, 77% say that available budgets present a hurdle to investment, while 47% identify a lack of grant or funder support as a barrier, 44% cite organizational culture and 12% say lack of board support presents a challenge.

Source: NTEN, 2024 Nonprofit Digital Investments Report, April 2024

Learn how CDW can enable
your organization to manage donor data.

Money Matters

95%

The percentage of nonprofits that draw from their general budgets for IT spending. A large number of nonprofits also pay for technology investments with the help of foundation grants (47%), major donations (47%) and government grants (42%).

Source: NTEN, 2024 Nonprofit Digital Investments Report, April 2024

54%

The share of nonprofit IT spending that goes toward hardware. Additionally, 14% goes toward software and licenses, and 12% goes toward consulting and services. Only 1% of nonprofit IT spending goes toward training.

Source: NTEN, 2024 Nonprofit Digital Investments Report, April 2024

45%

The portion of nonprofit leaders who say their organizations are spending too little on technology. Only 6% say their organizations are spending too much.

Source: NTEN, 2024 Nonprofit Digital Investments Report, April 2024

Money Matters

95%

The percentage of nonprofits that draw from their general budgets for IT spending. A large number of nonprofits also pay for technology investments with the help of foundation grants (47%), major donations (47%) and government grants (42%).

Source: NTEN, 2024 Nonprofit Digital Investments Report, April 2024

54%

The share of nonprofit IT spending that goes toward hardware. Additionally, 14% goes toward software and licenses, and 12% goes toward consulting and services. Only 1% of nonprofit IT spending goes toward training.

Source: NTEN, 2024 Nonprofit Digital Investments Report, April 2024

45%

The portion of nonprofit leaders who say their organizations are spending too little on technology. Only 6% say their organizations are spending too much.

Source: NTEN, 2024 Nonprofit Digital Investments Report, April 2024

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Optimizing Performance on a Limited Budget

Value is an important consideration for all organizations, but nonprofits must be especially judicious with their IT spending. While a large enterprise might be able to absorb a failed experiment with new technology (writing it off as the cost of doing business), such a misstep would be a significant setback for most nonprofit organizations, leaving them in a poor position to effectively pursue their mission. Strategic planning around core IT infrastructure can help keep technology initiatives under budget while also ensuring that these efforts provide nonprofits with a significant boost to their most important work. In addition to making strategic investments in the following technologies, nonprofit leaders might consider cost-conscious moves such as recruiting technology experts to serve on their boards and partnering with technology providers who understand the unique needs of mission-driven organizations.

CUSTOMER RELATIONSHIP MANAGEMENT: The imperative of effective donor management makes customer relationship management systems such as Salesforce an absolute must for nonprofit organizations. Leaders should carefully evaluate the needs of their organization before making a decision in this area, as CRM solutions are significant investments that will shape a nonprofit’s workflows and processes for years to come. By working with an experienced partner for system design and implementation, nonprofits can avoid common missteps such as underutilization and poor technology integration. When implemented effectively, a CRM tool can both reduce costs (by automating previously manual processes) and increase revenue (by streamlining fundraising activities and providing actionable insights from donor data).

DATA GOVERNANCE: According to a 2024 NTEN report, data and data systems have seen more investment from nonprofit organizations than any other technology recently, with 43% of survey respondents describing these areas as the “most important” for their organizations in 2023 and 2024. As nonprofits collect increasing amounts of constituent and donor information, proper data governance becomes essential, not only for operational efficiency but also for risk management. It can be time-consuming and costly to establish robust data governance frameworks, but it is typically far more expensive to ignore this need until problems arise due to poor data management. Such problems may include a large number of duplicate records, inconsistent reporting and regulatory compliance infractions, among others.

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CYBERSECURITY: Security came in second on NTEN’s list of 2023 and 2024 investments, and 90% of nonprofit leaders say that cybersecurity concerns have a “significant” influence on their organizations’ decisions regarding new tech investments. Like data governance, cybersecurity is an area in which the initial ROI may be difficult to see, but where the eventual consequences of underinvestment can be catastrophic. In the past, nonprofits may not have been seen as rich targets for cyberattacks, but hackers are increasingly taking aim at any organization that stores valuable data (such as donors’ financial information). Nonprofits must prioritize essential security measures such as multifactor authentication, endpoint protection and ongoing staff training.

CLOUD SOLUTIONS: Cloud computing has become a staple of IT operations for organizations in nearly all sectors, and the model has evolved significantly over the past decade. According to the 2024 State of the Cloud Report from Flexera, 89%  of organizations now have a multicloud strategy that relies on resources from several public and private clouds. For nonprofits in particular, cloud-based solutions can offer significant advantages of both flexibility and cost management. Rather than requiring organizations to make large investments in on-premises infrastructure, cloud solutions offer them the ability to scale their technology resources in response to actual use. Additionally, cloud resources require significantly less day-to-day management — a boon for nonprofits with limited IT staff.

Learn how CDW can enable
your organization to manage donor data.

Maria Geiser

CDW Expert
Maria Geiser is a CDW Contributor.