Why Not-for-Profits are facing fast-growing IT expenses – and what they can do about it

Why Not-for-Profits are facing fast-growing IT expenses – and what they can do about it


To accomplish their organizational goals, not-for-profits (NFPs) need to be focused on their mission and allocate their resources primarily upon those efforts. While information technology initially helps nonprofits grow, many NFPs experience that IT-related maintenance and administration costs rise as the numbers of employees, services, and beneficiaries increase.

In order for NFPs to rein in expanding IT costs, it’s important to first identify and address the drivers of these expenses. They include::

  1. Stakeholders constantly require bigger, better, and faster infrastructure.
  2. Internally, everyone from in-house administrators to field workers to volunteers require more IT services to accomplish their tasks and coordinate with one another. Externally, clients or benefactors seek service delivery by way of an experience that mirrors what they receive in the for-profit sector: more digital, more mobile, more convenient. Regulators and oversight bodies require more transparency, more accountability, and more compliance. These ever-greater requirements mean that more infrastructure must be built — be it in-house or cloud-based — to support them.

  3. More IT infrastructure means more things to maintain and support
  4. Burgeoning infrastructure increases costs for IT maintenance (system patches, software upgrades, network performance analytics, and user support) to ensure consistent delivery of those services. Costs include both tools/solutions (like asset management software or trouble ticketing solutions) and the staff needed to perform the tasks or support the user base.

  5. Larger systems mean wider areas to watch over and secure.
  6. More monitoring and security software tools need to be purchased, installed, and integrated into existing systems, while more time must be spent by staff to identify, analyze and report on performance issues or security breaches.

  7. It’s expensive to compete against for-profits for high-demand IT professionals.
  8. In a virtually full-employment economy, the specialists required to render IT services are difficult to attract, expensive to compensate, and challenging to retain. This in turn may drive higher spending on recruitment firms, legal fees, employee benefits, paid time off, employee wellness perks, and facility upgrades.

  9. Keeping up with the shifting IT landscape is resource-intensive and distracts from their core mission.
  10. Organizations with their own IT departments always need to have staff with the right mix of IT skills to reflect the ever-changing IT landscape. Because of the challenges in recruiting as noted in #4 above, NFPs are often forced into providing the training for existing staff to acquire these skills and are put into the difficult place of having to evaluate their performance after training. Training and/or certifications can be expensive both in terms of dollar cost as well as the time taken away from everyday functions provided by IT staff.

The cost/benefits of Managed IT Service Providers

Since NFPs are not IT companies, budgets allocated for additional servers, software, and IT staff are arguably better spent on servicing their beneficiaries. Does this mean that they have to give up on the benefits that IT departments provide? The answer to that is ‘no’ — if they turn to managed IT services providers (MSPs) for their information technology needs.

Why is an MSP the most cost-effective option for NFPs? Because, in many ways, MSPs were purpose-built to address the needs of organizations whose primary focus is not on information technology. By providing a complete solution to dozens of clients at a time, MSPs can achieve economies of scale from a cost perspective, efficiencies from an operations perspective, and a broad range of expertise from a staff perspective. This enables NFPs to access a level of technology and skill that would be virtually unachievable on their own.

Let’s address the cost issues we enumerated earlier one by one. A reliable MSP...

  1. ...reduces the need to invest in costly infrastructure.
  2. IT service providers have the technology and processes in place to accommodate your requirements. If you need more bandwidth or storage capacity, you can simply contact your MSP to make adjustments for you. In short, growth pains are a thing of the past once you hire a service provider.

  3. ...provides IT maintenance services at a fraction of the cost.
  4. All the time-intensive and low-value tasks involved with patch management, software upgrades, network analytics, and service ticket handling will be taken care of by the MSP. Thanks to those aforementioned economies of scale, large MSPs are able to take care of all those things for you as inclusions within very affordable service packages.

  5. ...always uses the most up-to-date monitoring and data security tools.
  6. MSPs know that customer trust is their greatest asset. This is why they pull all the stops to always have the latest, most powerful, most secure, and expertly maintained technology. Regardless of how large the systems entrusted to them get, topnotch MSPs are able to protect these around-the-clock. as well as provide you with access to 24/7/365 live-answered technical support.

  7. ...has the expert personnel needed to accomplish IT-related tasks.
  8. Leave everyday tasks like maintenance, monitoring, support, backups, and cyber-security to the experts so that your IT staff can focus on strategic initiatives, such as digitally transforming the client/beneficiary experience. The best part? Your MSP is ready to help you with that part, too!

  9. ...keeps up with the shifting IT landscape as part of its core competency.
  10. Keeping abreast of incremental or disruptive technological advancements, looming cyberthreat developments, and complex data regulations is all in a day’s work for leading MSPs, helping you to avoid costly mistakes and enabling you to move more quickly on important new initiatives.

It’s not an all-or-nothing proposition

With an MSP, you can streamline your IT department — or you can outsource it entirely so that you can focus completely on your mission. It’s your choice. And as you grow or pivot to new challenges, you can add the services you need — and only when you need them.

All MSPs are not created equal, however, so look for an MSP partner who has a proven record of service delivery, experience directly within the charity/NFP sector, and a pricing model that helps you leverage their expertise to multiply the value you receive from information technology.

Here’s the bottom line: Beneficiaries lose out when nonprofits over-extend and overspend on IT. At XBASE, many of our NFP customers receive fully managed IT services for half the annual cost of a single IT Director in Toronto.

But don’t take our word for it - here’s what YMCA Canada has to say:

“Staying on top of the latest technology is becoming more and more important for us, and XBASE is trusted to help us stay current with the technology we need to operate. We believe that XBASE delivers great value, and has done so for years.”

Rustam Adigamov
IT Manager
YMCA Canada

To learn more about which strategy is best for your organization, drop us a line. Our consultants have the expertise your nonprofit needs to reduce IT costs while still fulfilling your operational requirements.

Like This Article?

Sign up below and once a month we'll send you a roundup of our most popular posts