FUNdraising Good Times
How to determine nonprofit software costs
Part two of a two part series
Software is at the heart of so many nonprofit functions. You can’t afford down time. And you don’t want to find out your new system won’t talk to an existing one after it’s up and running. What’s a nonprofit leader to do? In search of guidance, drugs we talked with Janna Finch of Software Advice, advice an online firm that reviews nonprofit technology.
Here’s her suggestion. “Many vendors have developed their products to integrate well with commonly used third-party software—especially accounting programs—so look for a list on their website or ask a sales rep. The vendor’s developers should also know which products integrate well, click which integrate with some work, and which don’t integrate at all. If the product you’re evaluating doesn’t work with the programs you need, you can choose to operate them independently, evaluate different software, or replace the software you’re currently using with something you know will work with the new software.”
It’s one thing to purchase software; it’s another to manage it. Finch reminded us that the type of person a nonprofit needs to manage their technology “depends on the complexity of the system, your organization’s needs, and whether or not the software is hosted on- or off-site. Usually, the larger the organization, the more complex its IT requirements.”
Yet with hosted services such as software as a service (SaaS), smaller organizations don’t have to worry about updates and keeping the system up and running. They now have access to high quality software without the maintenance responsibilities.
But there are still costs, and these are impacted by the pricing model you choose. According to Finch, “Both perpetual license and subscription pricing models have upfront costs, typically setup and data migration fees. Sometimes new equipment, such as credit card readers, is necessary and that’s also an upfront cost. With regard to the perpetual license model, the license fee is also considered an upfront cost.”
“Beyond upfront costs,” she continued, “you’ll have recurring costs to cover support and upgrades, or, in the case of subscription software, the monthly or annual subscription fee itself.”
There are also annual costs which Finch points out vary wildly depending on a nonprofit’s size and the complexity of its software. Here’s some benchmark information. “The Nonprofit Technology Network (NTEN) determined that the average nonprofit spends 3.2 percent of their budget on technology. The smallest nonprofits can expect to pay, at minimum, about $500 (onetime) for a fundraising and donor management program installed on one computer, or as little as $30 per month for hosted software. Factor in an additional 15 to 20 percent of the annual license cost toward training, support and other costs.”
Take the time to make an informed decision. You can compare software systems and learn more at www.SoftwareAdvice.com.
Copyright 2015– Mel and Pearl Shaw
Mel and Pearl Shaw position nonprofits, colleges and universities for fundraising success. For help with your fundraising, visit www.saadandshaw.com or call (901) 522-8727.