Controlling the Interactive Purse Strings

By Donna Wilkins

On the whole, nonprofit organizations are spending more on interactive solutions this year. And with good reason. Integrated websites are elevating donations to holistic mission experiences. Fundraising platforms are empowering donors to support the charities they love in a manner that suits them best. Mobile and social developments are reaching more constituents and driving increased engagement.

But who is directing the strategy, and how are they deciding what to prioritize? Money doesn't grow on trees, after all, so strategic investment is paramount.

The Interactive Investment Benchmark Study from Charity Dynamics shows that in about a third of organizations (37 percent), interactive budget ownership goes straight to the top, owned by the executive director/CEO. Ownership by the fundraising (22 percent) and marketing (14 percent) departments is also fairly common.

When you dissect the data by organization revenue, the medium and large organizations ($5 million or more annually) tend to structure budget ownership differently. In these organizations, the executive director or CEO is less likely to own the budget (17 percent). Marketing, IT/operations and the chief information officer/chief technology officer are more likely to own the budget at 25 percent, 16 percent and 10 percent, respectively. Interestingly, ownership by the fundraising department holds steady at 22 percent.

In terms of how decision makers select their solutions, there are three leading approaches:

Priority rankings: A list of requirements are collected formally or informally and prioritized in to A-, B- or C-level importance. Features of potential solutions are weighed against these rankings with or without vendor participation. Used by 25 percent of respondents, this is the leading method of evaluation.
Competitive bids: Generally a request for proposal is issued detailing solution requirements and needs. Vendors are invited to respond with proposals and pricing, possibly with product demonstrations to convey solution capabilities.
ROI models: Often a component of the selection process, potential and expected multiyear return on solution adoption is projected and weighed against total cost of ownership. This includes not only solution expense, but adoption costs that may include deployment, staff training, new hires and more.