Part Three: Creating a Technology Budget for Your Not-for-Profit
In the last blog in our not-for-profit technology series, we took a look at finding right tools for your organization. It’s always best to ask as many questions as possible to your technology vendors, to make sure you feel comfortable. Once you find the right tool – here comes the fun part. Finding the budget for it.
When you start setting a budget for your technology purchase, it’s important to be realistic. If you have the benefit of historical perspective, take a look at similar purchases in the past. Look at some of the biggest purchases that your organization has made, and examine the context those purchases were made in.
For example, you might come across a large expense in the past and think, “We’ve spent this much money before – I’m sure we can spend that money again.” While this may be true – it’s important to put things in context. Do your best to understand the “why” behind each large purchase before drawing such a bold conclusion.
Once you have a better idea of what you can realistically spend, this helps you to narrow your search even further.
PRO TIP: See if there is any wiggle room in the pricing. Ask for not-for-profit discounts or any other avenue to lower the overall cost. TechSoup is a great resource for discounts on software like Microsoft Office, Adobe Creative Suite, Quickbooks, and more.
Look for Alternatives
By this point, you’ve clearly identified the technology need that you’re facing as an organization. You’ve also identified several possible solutions that comes with a cost for your team.
To cut costs, this is a great time to start looking at possible alternatives to those solutions. You can look for free tools that help you accomplish the same outcome. While this might not be the ideal solution, the cost-savings could make this option worthwhile as a short-term solution.
The problem with free tools is that they are free the same way a puppy could be free. There might not be any upfront costs to get the puppy, but the cost of keeping the puppy long-term could really add up over time. The same is true for a lot of free tools in the market today. So be sure to add these to your considerations.
Another option you have available is to look at the tools that you team already has. If you’ve been in operation a few years, it’s likely that you have some subscriptions to various online tools – and many trial accounts. Take stock of what you have and see if you can solve the challenges you are facing with those existing tools. While this might feel like an inefficient solution – it’s worth trying if you can’t find any flexibility in your budget.
Calculate Your Productivity Metrics
One of the best ways to justify a purchase is by first calculating how productive you are without the tool, and then contrasting that with how productive you are with the tool.
This can be tricky, but it’s an important step to take. Here’s how you do it, but measuring your time:
- Identify some of your key performance indicators (KPIs). For example: sending out 20 emails.
- Break apart the tasks that lead up to that KPI. For example: writing copy, setting up segmented lists, or creating images to go with content).
- Time how long it takes you to accomplish each of those tasks and average that number. For example: writing copy takes 20 minutes, setting up segmented lists takes 8 minutes, and creating images takes 10 minutes.
What you’re left with is the average amount of time it takes to reach your KPIs. But why is this so important?
When you measure these things before a purchase, you are able to set a benchmark. Your next step is to jump on a free trial and start using those tools that you want to purchase.
Do the same exercise with this new tool in place: 1. identify KPIs, 2. break apart tasks, and 3. calculate the time it takes to complete each task.
Now you’re left with a new number – the average time it takes you to reach your KPI using the tool.
When the difference between these two numbers is large, it’s easier to justify the purchases – even on a shoe-string budget.
In the last part of this series we will be looking at how we can make the final decision and convince the decision makers of the organization to make the purchase.