How Technical Debt Could be Hurting Your Nonprofit’s Mission, and How to Pay it Off

Today’s ever-evolving technology platforms provide various industries the opportunity to streamline processes and reduce manual work; however, some nonprofits can feel left behind. It can be difficult to keep up, and organizations may put off technology investments until it’s too late. This is a result of limited resources, the stigma around nonprofit overhead, and the need for a quick solution without the proper foundations in place. This technical debt can cause larger issues down the road, when systems become increasingly outdated and result in your organization spending more time on manual processes than your cause.

What is technical debt?

Technical Debt is a term that “describes the cumulative consequences of cutting corners in software development”. However, it can also encompass the reliance on legacy systems that have become outdated or patch-worked, resulting in challenging issues for any organization. A common example of this is a nonprofit’s payment processing solutions. For example, a nonprofit might use PayPal and have multiple merchant accounts with various providers, while using one software for accepting online donations, another for events, and a third or fourth for recurring transactions. Not all of these systems likely integrate, resulting in manual batch uploading, reconciliation and receipting. The outcome of this disjointed system is your staff and volunteers spending more time on operations and administration rather than your mission.

Developing technical debt: why nonprofits let systems slide

For many nonprofits, once a system is in place, it’s difficult to move away from it. Many organizations also rely on outdated tech that was not designed to scale to their evolving needs. According to NTEN’s report on Nonprofit Technology Staffing and Investments Report, only 20% of nonprofits recognize that technology is an investment in their mission. Meanwhile, for-profit organizations prioritize growth and scaling through technology, regularly investing in new tools. This demonstrates the stigma around nonprofit overhead, and how the pressures to keep costs low from the community and donors impacts tech investment. Unfortunately, this makes nonprofits increasingly susceptible to technical debt as opposed to their for-profit peers. Since there is immense pressure on nonprofits to put as much of their donations as possible towards their cause and running their services, there is little room left to keep technology up to date, let alone make improvements.

Once nonprofits get behind, it’s hard to catch up. Forbes discusses how neglecting your technology to save time and resources will ultimately slow your organization’s effectiveness over time. “Time gained now is time lost later,” they state. Delaying technology updates can mean when your organization can eventually afford an update, it’s so massive it becomes extremely daunting and can be hard to get-buy in from your executive team and board. The time and cost can build up quickly between consultants, new software, and data migrations. It can also result in a larger hit financially in terms of potential loss of donors. Moving vendors can mean loss of data, as some software and payment providers charge for each donor profile you move. Additionally, you’ll likely need a consultant or developer to do the back-end work, plus the time needed to get staff and volunteers up to speed.

Technical debt becomes too cumbersome and needs to be paid off when the cost of working with it from one day to the next outweighs the cost of fixing it, or when the system holds you back. Unfortunately, due to the stigma around overhead and a lack of resources, many nonprofits continue to work with a system that isn’t doing them any favors, but they can’t get buy-in to make changes.

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How to pay off technical debt

  1. Understand technical debt. Knowing where your organization has gone wrong in the past will help you identify where your team cut corners just to get by, determine the priority of what needs to be addressed, and prevent issues from being made in the future.
  2. Identify a legacy problem. If you can best pinpoint where your time and resources are being lost, you can better find the solution. Is your tax receipting system outdated? Do you manually upload an Excel spreadsheet from your software to your CRM? Once you’ve determined where the leak is coming from, you can patch the hole.
  3. Get buy-in. Getting approval from your boss and the board can be challenging. Especially, if your organization is among the 50% of nonprofits in NTEN’s report that state “Leadership makes technology decisions based on standard levels according to industry/sector information and gathers input from technology staff/consultant before making final decision.” This means multiple levels of approval, and if you want to try something new, you’re going to need to provide a strong case. Get your team onboard by building credibility, creating a strong business case, and demonstrating success. One of the great things about the nonprofit community is organizations’ willingness to help one another. Reaching out to similar-sized nonprofits to see how they solved their problems is an excellent way to find solutions, and provide a success story to your stakeholders.
  4. Updating legacy systems. Bring in the right people to help you move forward, whether that be consultants, volunteers with technical experience, or staff. Weigh your options and compare them to your long-term goals. Once you’ve made a decision and have your team onboard, move forward, but be willing to pivot and implement the best solutions to avoid incurring technical debt in the future.

Streamlining and scaling processes through new tech

So, you’ve identified your technical debt and worked out a path forward. Maybe you’ve worked with a consultant to outline your weak points, and received recommendations on the best solutions that meet your needs. As you explore your options, be sure to consider scalability in future decisions. As you grow, you want your tech to be able to grow with you. Your investment shouldn’t just meet your organizations needs today, but your needs in 5, or 10 years. When looking for new technology, knowing the facts is important to ensure that you can keep your organization’s long-term goals in mind. Make sure you ask the right questions.

Questions to ask your payment provider before signing on

  1. Rates: Make sure there are no additional charges on the rates they quote. For example, ‘Do rates go higher if card not present, international or reward/brand cards are used?’
  2. Integrations: Do they integrate with the software you are currently using or are hoping to use? Will they work closely with your software provider ensure seamless processing? These questions are key to eliminating manual processes, as you want to utilize as much automation as possible, and avoid possible technical debt in the future.
  3. Volumes: Do the rates increase if your organization processes higher volumes? At iATS the rates do not change whether you process $100 per month or $100,000 per month.
  4. Recurring and ACH: Are there additional fees to accept recurring and ACH transactions?
  5. Gateway and merchant account fees: Payment service providers like iATS provide both the gateway and merchant account, and don’t charge additional fees. This is not the case for all providers.
  6. Payment Schedule: When do you receive your funds? With aggregators like Stripe and PayPal, your funds can be held for weeks, or require a manual push to be deposited into your bank account. At iATS, you will receive deposits within 24-48 hours for Visa, MasterCard and Amex.
  7. Customer Care: Are you able to speak to someone and will they charge you extra fees for support? As a nonprofit, your team doesn’t have time to wait for hours for support, only to get in contact with someone who doesn’t understand the nonprofit industry.
  8. Set up fees and cancellation fees: Make sure you won’t be charged set up or cancellation fees and confirm if you have a fixed term contract.
  9. Fraud Tools: Do they charge additional fees for fraud tools that help protect your organization? Many payment processing companies work primarily with for profit companies. This means their fraud tools are based on the type of fraud that targets for profits. At iATS, our fraud tools are specifically designed to protect nonprofits.
  10. Data Portability: Some processors charge for each donor profile you migrate. iATS does not charge for recurring data portability, should you need to close down your account. We release your data at no cost as we believe it belongs to your organization. Ask other providers if they charge for data migrations and if they will release your data if you ever leave.

 

Does IT or Technology-responsible staff participate in strategic and planning discussion with the executive team?

           TechRespondants

Provided by NTEN, image and question from 2017 Nonprofit technology Staffing and Investments Report

 

Consolidating technology to avoid future technical debt

Maintaining systems is challenging, but what makes maintenance even more difficult, and is a common issue for nonprofits, is maintaining multiple systems. The chance of slipping into technical debt is much higher when your team is forced to keep up with various platforms that are each aging uniquely and require various forms of upkeep. By choosing software that offers a variety of functionalities and integrations, you can focus on getting the most out of a single solution rather than being spread thin across platforms. Programs like Salesforce or CiviCRM provide nonprofit solutions decrease manual efforts due to their payment integrations, applications, and auto-imports. Once you have full suite software solution, you can also choose an integrated payment solution that allows you to maintain only one payment integration, while making reconciliation easier on your finance team.

Embracing new tech to meet your goals

Another reason legacy systems can be slow to replace is simple: it works. In any company, staff can be hesitant to move away from something they know, but ultimately technology can help you reach your goals. By embracing a system that may require a learning curve, but will result in streamlined donations with fewer manual processes, your team will have more time to dedicate to what’s important: your mission.

 

 

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