Should your Non Profit Rent or Buy Database Software?

501c3 Non Profit Software Buying Tips

 

To be sure, how a 501c3 or 501c6 organization deploys and licenses database software is a critical decision in your nonprofit. In this article, we explore a question which may be applicable to your nonprofit database software licensing.

What Type of Non Profit Software is The Best Fit?

Cloud Based Software vs. On Premise Software 

In my train of thought, “Cloud based” software clients could be construed as “renters”.  And, conversely “On-premise” clients are conversely a “homeowner” type of client. Without question, “Cloud based” software systems have gained huge popularity in the last several years for 501c3 organizations and associations alike. And, rightfully so! Due to the nature of associations and nonprofits, it’s easy to be allured by the catch phrases and ease of deploying a cloud based solution. You hear it everywhere today, “With a cloud based solution your association can deploy a solution quicker and less ”. And, this is likely true for you too.

The Renter vs. Homeowner Choice

However, a “renter” and a “home owner” are distinctly different in terms of mentality.  Apartments/Condos/Duplexes all  serve a purpose in our society. And, buying a home is still for many considered an intricate part of achieving “ The American Dream”. Quite frankly, renting is a necessity for many transient individuals/families/students/retirees which need a temporary place to store their property (like your associations data) and provide a safe secure place to call home. For example, an apartment communities are usually very accommodating.  One will likely enjoy a huge expansive swimming pool, workout center, nice club house lounge area at the office, wonderful landscaping and sometimes a nice size park area for kids to play if the property caters to families.

The shared amenities can be quite attractive. The “shared amenities” are not it! There is more to substantiate the allure of going down this path. The renter does not have to worry about costs when the dishwasher breaks (at your kid’s birthday party), the a/c goes out ( in the heat of the summer) or a tornado comes through in the spring to destroy your roof. Finally, a renter usually pays less, signs a one year lease term, & you have way more than you could get if you had to buy.

A home owner is usually in it for the long haul, right? As a home owner you have  the choice to make changes to your existing structure (if and when your family needs change) like building a new room for your new little one or modifying an existing space to update it to the new trends, paint a room a different color, or update the outdoors with a nice garden to plant vegetables. And, at the end of the day, you likely will enjoy the build-up of equity.

Obviously, “home owners” have their pitfalls. When it breaks, you fix it. When it needs updating, you buy it. When the taxes come, you pay them. You get the idea!

Cloud Based Non Profit Software is Renting

For well over a decade now, “Cloud based” software vendors have enjoyed the limelight. As an association executive, it’s important to know if a “Cloud” based database system is really the right choice for your organization. Understanding your nonprofit needs in order to better understand which donor database or membership software system option is best for your company, is warranted. Choosing the right enterprise membership management system is integral to your business. Here are some benefits of cloud software to chew on:

  • Database efficiency:

Keeping member or supporter databases up-to-date can be a daunting task using installed software. When all data or files are stored online (in the cloud) files can be updated and shared remotely and easily. This means, no duplicate member lists or outdated email lists and no need to email or copy files onto USB sticks.

  • Saves time:

Instead of staff making changes to member contact information or membership status, with cloud solutions, your members and supporters can quickly and easily update their own membership or contact information. In addition, staff or volunteers can update websites and manage event registration remotely and easily.

  • Increased Collaboration:

Cloud software can facilitate easier collaboration. Many cloud systems also allow you to see previous versions, so you don’t need to worry about editors accidentally deleting important information.

  • Reduced Infrastructure and built-in backup:

Most nonprofits and membership organizations do not have the resources necessary to update their systems and software, often leading to outdated systems, crashing computers and security holes. With cloud-based software or systems, the “burden of maintenance” is shifted to the vendor. Their automatic updates, backup and tech support save time and effort previously required for updates and infrastructure maintenance. In addition, with cloud systems there should be limited downtime since they have back-up servers as well as expert support to manage and minimize service disruptions.

Your Choice in Non Profit Software Option

The decision to “Rent or Buy” is becoming less applicable. But, for some the question is still pertinent and will be for some time. Like all decisions, there are many factors involved in finding the best fit. We encourage our clients to review the pros and cons of each option before making your decision. To be clear, we do not believe that one or the other is right for every association today. We can help with understanding your unique needs and determining the “Smart Fit” for your nonprofit.

Please contact us today if you would like more information or would like help in selecting your next apartment or home!

501c3 Software Options for Non Profit

 

What No One Tells You About Technology Debt

Technology Debt

Do you remember Stanley, the Lending Tree Guy? If not, below you will find the video from the 90’s to refresh your memory:

[youtube]https://www.youtube.com/watch?v=PV_YAeXOSiw[/youtube]

While you may not be in financial debt like Stanley at your organization, you may be in similar form of debt, Technology debt, which is the topic we want to discuss today. In this article, I explain what technology debt is and the side effects of not addressing it in your nonprofit. 

The Impact on Technology Debt

For over the last decade, I have been in the business of providing technology solutions for nonprofits. And, in that window of time, we have had many conversations with clients about Technology Debt and the impact it has on the mission of an organization.

What is Technology Debt?

Technology debt entails not keeping your infrastructure on the latest and greatest version provided by your software vendors. For example, when you apply standard Microsoft updates and patches on Tuesday night, you’re paying the debt. When you upgrade to the latest version of your Association Management Software, you’re paying the debt. When you renew your subscription to your Social Media provider, your’ paying the debt.

In the last 5 years, we have all been witness (participant) of the huge paradigm shift in how organizations deploy and maintain software. In essence, we have moved from the “On Premise” methodology to the “Cloud Software” as the prevailing means by which nonprofit associations deploy and utilize software today.

The Impact of Technology debt payments:

  • No Integration: An unsupported infrastructure will likely not integrate with other systems
  • Frustration: Not paying your debt will increase frustration by your staff and members
  • Pain: Debt paid incrementally is easier than waiting 10 years
  • Lack of Service: By not keeping up with your debt, you will limit your ability to provide the necessary services to your members. Ex. Is your web site responsive? Is your database PCI compliant?
  • Costly Upgrades: With Technology debt, you likely are forced to make costly customizations which will impact your ability to upgrade if and when you decide to do so.

A Few Cloud Benefits:

  • Quick Release: The “Cloud” multi-tenant software allows associations to stay current as technology evolves and changes. The “Cloud” quick release cycle builds in your software updates.
  • Stay Current: The “Cloud” eliminates the propensity for organizations to get behind with technology (assuming the vendor is keeping up). You have no “choice” to delay.
  • Cash Flow: No more lump sums upfront. “Cloud” based solutions is that your organization can pay incrementally over the life of your subscription.

Because of our history with many leading CRM and Association Membership Systems, we have many organizations using “On Premise” solutions which they have not upgraded/enhanced/or fixed for years (and in some cases over a decade). In some cases, Nonprofit Executives argue, proudly claim they have saved thousands of dollars by not participating. Or, they make the claim that by not paying for Association Nonprofit Management Software Updates they avoided the pains of an upgrade. If you’re accomplishing your mission with your current software system (or your system has an update that will) then these statements couldn’t be farther from the truth!

Benefits of Staying Current:

If you are still using an “On Premise” solution, many software for nonprofits provide a Software Update Plan (Maintenance Plan). It’s optional, but don’t make the mistake of thinking you avoid the debt, you don’t!

  • Protection: You assure the organization of optimizing your system for peak performance while also protecting it against future technology changes (in and outside the code).
  • Mitigate Risk: You will know your organization is protected against downtime and incompatibility issues when an operating system or software is upgraded. Ex. PCI standards.
  • Manage Costs: Your organization will control the expenses by providing a predictable cost of ownership you can rely on and budget for. You will jeopardize the use of your system by avoiding major upgrades every 5 to 7 years. In fact, it will likely be a complete shock to know that you have to pay one lump sum rather than the incremental payments in a regular plan.
  • Grow Revenue: With new technologies, you are more likely to be afforded new tools which will increase engagement and membership activity. For example, a responsive web site for mobile payments and e-Commerce, private social networking, and marketing automation.

In summary, I believe that “On Premise Software” and “Cloud Software” has its appropriate place today in technology. This piece is not a position for one or the other. However, when you pay off your technology debt (on-premise via software updates or via the cloud), you win, and your customers win too.

If you would like to discuss the proper approach for your organization or sign up for a free assessment, please feel free to contact SmartThoughts. Until then, keep SmartThoughts in mind.