Does Bad Software Hurt Nonprofits?
The short answer is yes. If your data-tracking systems need their own organization charts or binders full of complicated instructions, then your software infrastructure is definitely broken.
Recently I visited one of our partners in California to review its software systems. It's a large nonprofit with chapters throughout the United States, and its software infrastructure is very typical: Salesforce, PayPal, Eventbrite, MailChimp, Square, Quickbooks, etc. We identified six critical systems that didn't work together.
The cherry on top was when I discovered that those six different systems didn't communicate — at all. This sophisticated nonprofit was manually inputting and managing all of its data by hand, which resulted in messy data and immense staff burden. What century is it? How did nonprofits get stuck in 1999, and how do we get them out?
This nonprofit isn't unique. In fact, the above scenario is all too common. It starts by having huge amounts of available data that is difficult to decipher, often entered incorrectly, and due to poor quality software, it quickly becomes impossible to find actionable information in a sea of messy code. We're living in 2015 where nearly everyone lives online and advanced technology has become a seamless part of our daily lives. We must do better.
What is good software?
Good software makes your life easier. You should look forward to using your donor database. That's a weird thought, huh? The experience should be painless, fun and surprising.
Great software makes technology invisible. It tells you what you need to know before you ask, gives you actions instead of riddles, and you should be able to learn it intuitively without training. In fact, we have a test called the Intern Test that helps us quickly determine whether our software is well-designed. It goes like this" "An untrained intern must be able to figure out any task in our system within 10 minutes and without coaching" because anything less would be poorly designed software.
Design With Impact
User experience is the field in software development dedicated to making technology intuitive, painless and efficient. It’s much more than just “design,” and in my opinion, it’s the most important part of any system. You can have the most powerful software in the world, but it’s useless if you can’t use it well.
Nonprofit software is notoriously among the worst when it comes to user experience. Our investors thought we were pranking them when we showed screenshots of a competitor. It's not just about looks either; it's about quantifying the damage caused when your system betrays you by requiring hours of valuable staff time on tasks that can be completed in minutes.
Image: Here's a quick "napkin estimate" to give you a sense of impact, but I recommend doing your own calculations. The results are surprising.
How your data got messy
In the 1990s, software came on CDs and was physically installed on a computer. Millennials have no idea what I’m talking about, but most of you can relate. Storing your donor database on a local system had lots of drawbacks: Data could be easily lost, software had to updated manually, and you had to enter all of your data manually because systems couldn’t communicate. This meant that nonprofits needed several data “silos” that functioned largely independently of each other and required an expert to use properly. Millennials can’t even fathom the codes you needed to memorize to run reports …
The biggest problem with these silo systems is that it’s incredibly difficult to extract useful data and it’s even harder still to draw correlations between different systems. This makes it incredibly challenging to analyze data in any meaningful way. I’ve spent untold hours cursing nonprofit software for this reason. How could such expensive software do so little? Why did I have to spend weeks learning systems that yielded so little value? I suppose it was the best we could do in the 1990s.
Cloud-based software (aka 'the Internet')
Now (in 2015) we’re finally getting “cloud-based software,” which is just a fancy way of saying “we finally stopped selling software on CDs and joined the 21st century.” It’s astonishing to me that so many nonprofit tech companies are still making a big deal out of something they should have done 10 years ago. Welcome to the Internet! Glad you decided to join us.
Don’t be fooled by buzzwords like “cloud-based software.” The fact that they were selling CD-based software anytime after 2005 should be appalling. It’s grossly negligent, but profitable.
What went wrong?
Badly managed corporations with small visions — I'm calling them out. This isn't aimed at any specific company but rather at the nonprofit software industry as a whole. Here are some examples of abusive practices:
- Making data as hard as possible to export in order to make it prohibitively expensive to switch systems ("maximizing switching costs")
- Requiring long contracts with punitive clauses ("locking in customers")
- Coming up with absurd justifications for taking a large cut from all online donations ("donation skimming")
- Overcharging for software that costs a fraction as much in other industries ("abusive pricing")
- Making software intentionally hard to use so nonprofits must pay for expensive training ("maximizing profits")
I could continue at length, but I hope you get the idea. There are some very ugly business practices in the nonprofit software industry, which is especially grotesque when you consider who loses.
What are we doing about it?
The first challenge is to connect all of your supporter data in one place and then make that data beautiful, intuitive and powerful. Once we've fixed that critical infrastructure, we have achieve awe-inspiring things in philanthropy.