We’ve yet to come across any industry that will balk at the opportunity to save money. For 501c3 nonprofit organizations in particular, though, finding opportunities to cut costs isn’t merely a way to increase profits—it’s a way to stay afloat.
When it comes time to consider very large capital expenses like IT upgrades, then, the conversation often comes down to one factor and one factor alone: cost. (After serving the DC nonprofit community for over two decades, we’ve seen this happen over and over again.)
But here’s the thing: when you’re talking about saving on your IT upgrades, there are two very distinct areas you need to consider: short-term expenditures, and long-term costs. Unfortunately, there is often a give-and-take—cutting immediate out-of-pocket costs too drastically often results in costly losses of productivity down the line, and saving in the long run often demands higher up-front investments.
Let’s explore a few hypothetical scenarios to demonstrate how different decisions can end up affecting your nonprofit and its ability to serve your mission:
Scenario 1: Laptop Upgrade
A Maryland-based charity needs 10 new laptops to outfit a portion of its staff. Rather than purchasing new machines, the charity opts for refurbished laptops that should still have the basic capabilities needed.
- Short-Term: The charity saves around $4,000 on hardware and software, and therefore remains within their annual budget.
- Long-Term: 12 months down the road, overall performance on three of these machines slows to the point where staff members are losing hours of productivity each month. One of the refurbished machines has stopped working altogether, and another seems to be heading in the same direction.
Scenario 2: Data Backup Upgrade
A Virginia-based hospice organization knows they need to protect and back up their sensitive data. They feel that they can only afford the low-level option that costs $0.50/GB of data, rather than the more comprehensive disaster recovery solution at $2/GB.
- Short-Term: The organization enjoys a low monthly invoice, and doesn’t experience any trouble recovering lost files.
- Long-Term: The server that hosts their primary database crashes. Since their solution is the low-level backup option, the organization needs to order a new server, have it shipped, and then upload their data from a hard drive that is shipped separately from their provider’s datacenter. The process—even expedited—takes 3 days, during which the company could essentially only function with pen and paper.
Scenario 3: Server Upgrade
A 30-person research institute has two servers that are teetering on their end-of-life. Rather than proceeding with an upgrade project, they chose to move their entire network to a cloud environment.
- Short-Term: The institute has a one-time $7,500 data migration project to pay for, and invests a touch over $5,000 each month in cloud desktops—more than they were paying previously for managed services on an ongoing basis.
- Long-Term: Rather than investing $40,000 of capital every 4 years in a server upgrade project, the institute has no servers to maintain, has significantly extended the life of their workstations, and simply pays their predictable ongoing monthly fees.
As you can see, choosing the right path with your IT upgrade is a fairly complex and strategic undertaking; rather than simply cutting your up-front investment, you have to take into account how IT affects your overall operations. The main questions to ask yourself is this:
How critical are your IT systems to the advancement of your mission?
If your nonprofit could not serve its mission without the help of your technology, you need to do the best you can to focus your efforts on getting a good return on your investments, not just shaving money off of your invoices.
If, however, you could accomplish the majority of your daily tasks without even logging into a computer, you’ll do just fine by putting the absolute minimum amount of money into your upgrades (from the devices you buy to the support packages you subscribe to).
All in all, make sure you take the time to explore all of the benefits and risks before you make any big decision regarding your technology. You may feel as though your options are slim, but with the right research and the right technology partner, your nonprofit will find a way to thrive no matter the constraints at hand.