Nonprofits that embrace the right technology are better equipped to achieve their mission, run more efficiently, and stay ahead of the curve. 

But, building a solid budget for a nonprofit organization, aligning it with your goals, and figuring out if it’s worth the investment can feel overwhelming. This blog simplifiwa the process so you can spend less time worrying about the IT budget for your nonprofit organization, and more time focusing on what really matters: your mission.

Why is an IT Budget Important for Nonprofit Organizations?

An IT budget for a nonprofit organization is more than just a line item—it’s a plan that ensures you have the right technology to operate effectively and securely. Here’s why having an IT budget for your nonprofit organization matters:

1. Keeps Technology Running Smoothly
IT budgets help you allocate resources for regular maintenance, upgrades, and repairs. Without proper resource allocation, it can lead to outdated systems, downtime, and inefficiencies.

2. Supports Your Mission
Technology is critical to donation management, communicating with supporters, and allowing your staff to focus on what they do best. Your IT budget will make sure you have the right tools and tech to fulfill your mission effectively.

3. Prepares You for Unexpected Costs
Nonprofit technology issues, like hardware failures or cyberattacks, can come with hefty bills; it’s estimated that the average cost for a nonprofit to recover from a data breach is $2.75 million. A budget will ensure the right systems that minimize the impact of these surprises get put in place.

4. Prioritizes Spending
IT budgets for nonprofit organizations put funds toward essential tools like cloud solutions, data security, and software upgrades.

5. Protects Against Cyber Threats
Nonprofits are not immune to cyberattacks; 27% of all nonprofits have been affected by a cyber threat. An IT budget for your nonprofit organization allows for investments in security tools and training to safeguard sensitive data.

How Much of Your Budget Should You Allocate to IT?

Small nonprofits typically spend around 13.2% of their overall budgets on nonprofit technology, while larger organizations spend around 2.8%. The amount you allocate toward the latest technologies depends on your long-term objectives and needs.

What Key Components Should Be Included in a Nonprofit IT Budget?

A well-planned IT budget for your nonprofit organization covers all the bases for technology needs. Here are the key components to include in the IT budget for your nonprofit organization:

 

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1. Hardware

  • Computers, laptops, and mobile devices for staff.
  • Servers, printers, and other essential office equipment.
  • Replacement costs for aging hardware.

2. Software 

  • Licenses for essential programs like productivity tools, donor management, and accounting software.
  • Subscription costs for cloud-based IT services for nonprofits and collaboration tools.

3. Cybersecurity

  • Firewalls, antivirus software, and endpoint protection tools.
  • Costs for implementing zero trust security frameworks.
    Staff training on cybersecurity best practices.

4. Data Backup and Recovery

  • Cloud storage solutions for data backups.
  • Disaster recovery plans to protect against data loss.

5. Network and Internet

  • Internet service costs and upgrades for high-speed connections.
  • Networking equipment like routers and switches.

6. Compliance

7. IT Support and Maintenance

  • Managed IT services for nonprofits or in-house support staff.
  • Routine maintenance and troubleshooting.

8. Training and Development

  • IT training for staff to ensure they’re comfortable using tools and aware of security protocols.
  • Professional development for IT team members.

9. Future Planning

  • Budget for scaling nonprofit technology as your organization grows.
  • Investments in emerging tech that can enhance efficiency and impact.

How Can Nonprofits Assess Their Technology Needs?

Assessing nonprofit technology needs can help you invest in the right tools and solutions to support the IT budget for your nonprofit organization. Here’s how to do it:

Evaluate Current Nonprofit Technology

Start by taking inventory of your tools. List all hardware, software, and IT services for nonprofits currently in use. Identify any outdated or underperforming tech that needs replacement or upgrades.

You should also measure the ROI of your investments in the latest tools to see if you are allocating funds correctly. Estimate nonprofit technology costs and determine whether existing products generate ongoing value. 

For example, your current email marketing software might cost hundreds of dollars a month. However, this tool might prove worthwhile if it helps you attract new donors to your organization. 

Consider all the benefits nonprofit technology provides your organization when working out its value. For instance, a particular piece of software might not attract more donors but could still be worth the cost if it automates processes and saves time on manual tasks, such as issuing receipts or collecting donor contact details. 

Gather Input from Staff

Identify pain points from your team members and ask about tech challenges they face in their roles. Then, learn what tools they find most helpful or what they need to work more effectively.

 

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Review Data and Security Needs

Assess your data management strategies and evaluate how you store and manage donor or client information. As you examine security measures, check for gaps in your cybersecurity strategy, such as the need for zero-trust security or better encryption.

Consult an IT Professional

Work with an IT expert or managed service provider to conduct a nonprofit technology audit that analyzes your infrastructure and identifies any gaps. Get recommendations from the IT provider and leverage their expertise to determine the most effective solutions for your nonprofit.

Prioritize and Budget

Based on your IT audit and assessment, rank the needs of your IT budget. Focus on filling in critical gaps first, like outdated hardware or insufficient security. As you develop the budget, plan for the future by including scalable solutions to accommodate growth and evolving nonprofit technology requirements.

Why Do Nonprofits Struggle With Tech Budgeting?

When it comes to making an IT budget for your nonprofit organization, you might not have the resources to determine the correct infrastructure and tools, leading to an underinvestment in the latest nonprofit technology. For example, you won't maximize value from your tech spend if you choose the wrong customer relationship management (CRM) system or marketing platform. 

Another challenge you might run into is a lack of funding for nonprofit technology investments. Mid-sized companies spend between $50 million and $2 billion—around 4.1% of their revenue—on IT. 

However, 97% of nonprofits operate on budgets of less than $5 million a year, while 92% have budgets of less than $1 million. With little funds to spend on the IT budget for a nonprofit organization, many nonprofits might feel they have to settle for inferior technologies or rely on legacy systems that slow digital transformation.

How To Optimize Your Nonprofit Budget for Technology

Even if you lack the resources of larger companies or have fewer funds, you can still get more value from the IT budget for your nonprofit organization through strategic planning. Here are some ways to make your spending more effective.

Find Cost-Effective Solutions

Effective IT for your organization can fit into your nonprofit’s budget without breaking the bank. You don't need to invest in costly hardware and software to achieve your organizational goals or improve operations.

Some vendors offer discounts for nonprofits, helping you reduce your tech spending and generate value from the latest technologies. Salesforce, for example, provides its platform at a reduced price for eligible organizations through its Power of Us program. 

To make the IT budget for your nonprofit organization go further, you can also prioritize spending money on the resources you actually need. For example, removing enterprise-level features and functionalities from a software package will reduce monthly vendor subscription costs, allowing you to allocate funds toward other technologies. 

Virtualize On-Site Equipment

Moving in-house technologies like storage and networking solutions to the cloud can further lower the tech spending in the IT budget for your nonprofit organization. Though virtualizing data centers, servers, and other on-site equipment requires an investment, you could reduce labor and maintenance costs for physical devices and save money over time. A cloud vendor will do all the hard work for you, freeing up resources for your IT team. 

Migrating to the cloud involves strategic planning. You'll need to evaluate your current infrastructure and determine:

  • Which IT services for nonprofits to virtualize
  • How long the process will take
  • Whether you will encounter any roadblocks

As 53% of nonprofits planned to increase their cloud usage incrementally from 2023-2025, this type of digital transformation could pay off in the future and help you stay a step ahead of your peers. 

The Importance of Nonprofit IT Budget Optimization 

Nonprofits often lack resources and funds for nonprofit technology investments. That's why it's important to optimize the IT budget for your nonprofit organization and align it with your organizational goals. 

An IT-managed service provider (MSP) like Ripple can help you choose the right technologies for your nonprofit so you spend less time focusing on your IT and more on supporting your organization’s mission. As a result, you can improve your digital transformation efforts and increase the impact of your nonprofit’s goals.

Want to learn more about how Ripple can help you create the IT budget for your nonprofit organization? Reach out today to chat with Melissa—yes, we can tell you exactly who you’ll talk with—to discuss if your nonprofit needs additional IT strategy to better support your organization’s mission. 

Frequently Asked Questions

How can nonprofits minimize IT expenses without sacrificing quality?

Look for vendors that offer technologies at a reduced cost for nonprofits and only pay for the IT features you need. For long-term savings, consider moving on-premise equipment to the cloud. MSPs offering IT services for nonprofits can also help you maximize your expenses.

What cybersecurity measures should nonprofits budget for?

Nonprofits handle sensitive data, from donor information to client records, making cybersecurity a must-have in your budget. Here’s what to prioritize:

  • Zero trust security
  • Endpoint protection
  • Email threat protection
  • Data encryption
  • Multi-factor authentication (MFA)
  • Regular security assessments
  • Data backup and disaster recovery
  • Staff training

What should nonprofits prioritize when allocating their IT budget?

When it comes to allocating the IT budget for your nonprofit organization, prioritization is key. Focus on areas that directly impact your mission, security, and operational efficiency. Here’s what to prioritize:

  • Cybersecurity
  • Reliable Hardware
  • Cloud Solutions
  • Data Backup and Recovery
  • Mission-Critical Software
  • Staff Training
  • IT Support