The Good and Bad of Tech Companies in the Nonprofit Sector
There are so many tech companies in the nonprofit sector — and they touch every aspect of development from major gifts to events, with the added inclusion of ChatGPT. Tech is a double-edged sword. It means exceedingly fast growth and new opportunities coming faster than professionals and nonprofit leaders can absorb. Of course, it provides challenges and opportunities, but we must first get our heads around the fracturing from the past.
Not too many years ago, there were several companies in the space with the biggest market share, most of which were CRM companies. For instance, Blackbaud was the most notable. But times have changed. Now we have companies that offer generative AI, predictive analytics and, all the while, the promise is of more and better. “Lean on tech” seems to be the current ethos.
So, what does that do in the nonprofit sector and beyond? It makes things astounding. For instance, marketers can barely keep up with all the changes behind the scenes of promoting on social media. Further, with more sophisticated technology comes more opportunities to hack donor information. Here’s the scoop: The overwhelm is real. That said, nonprofit leaders need to face the realities. Tech isn’t going anywhere. So understanding the pros and cons helps.
Pros for Technology and Nonprofits
One of the most important things nonprofit leaders need to do is to get a handle — even at 50,000 feet — on the power of technology. Once leaders and fundraisers understand the benefits, they can thoughtfully integrate it into their organizations. With that said, what genuine benefits, such as expansion, does tech offer nonprofits?
1. Increased Visibility
Although I appreciate technology, I do not believe nonprofits need to go mindlessly into it. However, there are some benefits, and one of them is visibility. Marketers know they have to get the brand out in front of people, and technology helps accomplish it. Social media management, as well as predictive and data analytics abilities allow nonprofits to increase outreach and engagement. But it takes a concerted effort. You have to know your goals and get the know-how to use the tools well.
2. Capacity Building
One of the great promises of technology is the ability to increase nonprofit capacity. For instance, cloud-based solutions and even smart tech streamlining workflows and answering simple and repetitive donor questions benefit the sector. The fact is that technology can support people and make things easier. But nonprofit leaders must bring in the right technology based on their needs. For example, if you have a large team, looking at tech to improve workflows may well be something that makes sense. Still, knowing what you need at your nonprofit and what you don't takes careful consideration. Is a data lake a solution for your organization?
3. Data-Driven Decision-Making
One of the biggest benefits of technology for nonprofits is that it provides data and metrics for more thoughtful decision-making. Yes, experience matters. One of the things that many tech evangelists love to promote is that experience doesn't matter so long as you have the data. Not true. Nonprofits do need experienced professionals to grow their organizations. But technology allows for much greater measurable information so leaders can make better and more informed decisions.
Technology Cons for Nonprofits
1. Risk of Disparity
Ignoring technology and not making investments in it risks the livelihood of nonprofits. The fact is that nonprofits are investing in tech and leveraging its power and potential. Again, I understand how overwhelming technology is and how it requires a culture of learning for everyone on a team, from top to bottom. So, what's the easiest solution to understand what you need? A simple solution is to hire a tech consultant with fundraising experience.
2. Ensuring Mission Alignment
One of the biggest things to remember with technology is that the values of tech companies may not be a nonprofit's values. For example, in this polarized climate, tech companies may support values and missions within their companies that don't align with a particular nonprofit's mission and values. So, when deciding to invest in technology — even for a CRM — doing due diligence to determine if the company aligns with the values and mission of a nonprofit is critical.
3. Addressing Bias
Finally, we have the topic of bias as a challenge for nonprofit tech. One of the biggest issues is that the data used for algorithms to learn about data sets is biased as it's coded by typically white males who are predominant in the tech sector. Therefore, nonprofits have to challenge tech companies about any bias in the data sets used. An excellent approach for nonprofits to ensure the ethical integration of technology in their nonprofits is to partner with ethical tech consultants before they sign contracts with tech providers.
Technology is overwhelming. I think it's essential we don't drink the Kool-Aid, so to speak, and believe that technology offers us a rosy vision of what nonprofits can do. No, everything comes with challenges, and while tech is excellent, it has many cons aside from just the ones highlighted in this article. However, ignoring tech is just as bad and not the right approach for thriving nonprofits. As with everything, balance, due diligence, and reflection are necessary to bring new platforms into an organization.
The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.
Paul D’Alessandro, J.D., CFRE, is a vice president at Innovest Portfolio Solutions. He is also the founder of High Impact Nonprofit Advisors (HNA), and D’Alessandro Inc. (DAI), which is a fundraising and strategic management consulting company. With more than 30 years of experience in the philanthropic sector, he’s the author of “The Future of Fundraising: How Philanthropy’s Future is Here with Donors Dictating the Terms.”
He has worked with hundreds of nonprofits to raise more than $1 billion dollars for his clients in the U.S. and abroad. In addition, as a nonprofit and business expert — who is also a practicing attorney — Paul has worked with high-level global philanthropists, vetting and negotiating their strategic gifts to charitable causes. Paul understands that today’s environment requires innovation and fresh thinking, which is why he launched HNA to train and coach leaders who want to make a difference in the world.