Article by Dan Pennell, CEO of WMtek

Non-profit organizations are not always known for their cutting-edge use of technology.  In recent years, however, WMtek has seen a number of organizations push hard to get outside their comfort zone with time and money spent on web initiatives. Some have spent unprecedented percentages of their organizational budgets in an attempt to shore up their public-facing website and embrace new web-based technologies that will allow them to raise more money online and increase their recruiting efforts.  At the onset, this seems good. Are we finally getting ahead of the technology curve?  Maybe, but there seem to be some speed bumps that exist before you get to the high-speed straightaway you are hoping for.

Speed Bump #1: We aren't being as aggressive as we think we are.

What percentage of your annual operating budget is exclusively dedicated to digital marketing and technology initiatives?  Your organization is probably spending a higher percentage than ever before, but truth be known, it may still be a significantly lower percentage than most enterprise companies. According to a 2014 Gartner report the average was 10.2% with 50% of companies planning for an increase in 2015.  It is assumed that companies whose exclusive use of web-initiatives is based on forward facing engagement activities such as sales and recruitment spend a much higher percentage of their annual budget than manufacturing or business-to-business corporations.

In addition, Gartner reports that enterprise organizations are investing more aggressively in their public-websites. This has resulted in total expenditures of $500 billion annually on digital initiatives, as well as 19% more annually on corporate websites than on digital advertising (such as Google Adwords, etc).

What does this mean for us?  Let's put it into perspective.

If your organization grosses $30m annually, an equivelantly sized secular firm would be spending at least $3m every year just to stay on par with minimum growth expectations.  But you aren't a secular firm, so you should be spending less, right?  Maybe, but not necessarily. If you are a Missionary Sending Agency whose primary activities include fundraising and recruiting, it could be argued your digital marketing and web-based technologies budget should be as high as 15% of gross income.  

The reality is, Christian non-profits have traditionally spent a much smaller percentage of their annual operating budget on digital marketing and web-based initiatives. In fact many still favor project-based, extra-budget fundraising to cover costs of their web-based initiatives rather than allocating a percentage of their annual operating budget for these efforts. 

Why is this a problem?

For starters, funding an aggressive web-initiative this way may be comparable to purchasing a race car and not having enough money left for fuel, maintenance, drivers or a pit crew.  It’s a great car, but it’s not going to accomplish anything without an always-on support staff and budget.  

So, how do we know if we are being aggressive?  

It kind of depends on our measuring stick. For many organizations, they are certainly being very aggressive if you measure current efforts against their own past.  But, if the measuring stick is industry averages it appears that most are still failing to show up on race day.

Speed Bump #2: Our leaders aren't in the driver's seat.

Technology exists to serve ministry, not the other way around.  And, no one is in a better position to insure this than the leadership of your organization. Gartner's 2014 CEO Survey found that digital marketing was the No. 1-ranked CEO priority for strategic business growth investment during the next five years.  

If secular companies are using their aggressive technology-enabled strategies as the #1 source of raising capital, shouldn’t nonprofits follow suit? 

A simple reality for many nonprofits is that mid-level managers, marketing teams and boots-on-the-ground workers are dreaming of aggressive technology initiatives but feel disconnected from the vision cast by the organization's leadership.  It’s true that a passionate IT or Marketing leader is sometimes able to instigate some forward movement within an organization and many of the projects we work on begin this way.  Sadly these initiatives suffer from top-level stakeholders who don’t fully understand what the organization stands to gain or even why the initiatives are being pursued in the first place. The outcome can sometimes be top-level leaders considering a technology project to be a failure before it is even hatched, and the incubator (source of long-term funding) is unplugged before results are even possible.  This can be a huge setback for the organization. In fact, we’ve seen some incredibly talented mid-level leaders depart prematurely because of this dynamic.  To overcome this it is imparitive for the leadership of the organization to become proactive in understanding and advocating for the role technology will play in the growth of the organization.
Speed Bump #3: NPO's keep trying to be technology firms.

Great organizations are using smartly refined outsourcing strategies to accomplish their technological goals. On average, enterprise companies outsource more than 50% of their annual budget (average 10% of revenue). Again, if your ministry has a gross income of $30m you should be outsourcing at least $1.5m every year toward fulfillment of  digital marketing and web-based technology initiatives.  This does not include costs for hosting, servers, IT staff, security, etc. It is the cost of your initiatives.

Why is this a speed bump?  

It is our take away that Christian non-profits tend to spend a far lower percentage of their overall budget on web-based initiatives than the business sector.  They also tend to spend a far lower percentage of whatever budget they do have on outsourcing.  In short, ministries hesitate when it comes to outsourcing their technology initiatives.  This could be a warning sign that we (in the ministry realm) have not discovered a powerful secret that is driving growth and limiting long-term captial expenditure risk in the business sector. 

In conclusion, is it possible to find success with web-based initiatives even though these speed bumps exist?

Absolutely, but first your organization must define the measuring stick for success. It will be important for your ministry to be educated from the inside out on how to plan for and evaluate the initiatives we take on.  As with everything you manage it is important to not become overwhelmed.  If your organization struggles in one or more of these areas, consider pulling together an off-site meeting with leaders and stakeholders for an open discussion. Draft a plan to address these critical areas one at a time and set benchmarks for progress.  

One more tip.

If your ready to tackle this challenge, but not sure where to start - call WMtek. It's what we do. Together we can leverage the powerful technologies of our age to accomplish great good for the Kingdom of God.

About the Author

Dan Pennell is the founder and CEO of WMtek. A primary focus for Dan is consulting with NPO's to identify organizational challenges and implement solutions, especially in the area of business workflow and enterprise-wide technological deployment. If you are interested in bringing Dan to your organization for consultation please fill out the form below and we will be in touch with you shortly. Thanks!

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