<nettime> Rethinking Technology in the Non-Profit Arena

["geert lovink" <geert@xs4all.nl>]

From: "Jonathan Peizer" <JPeizer@sorosny.org>
Sent: Thursday, February 15, 2001 5:05 AM
Subject: Rethinking Technology in the Non-Profit Arena

This article focuses on the strategic differences underlying non-profit &
for-profit IT investment and explains the differences in the cycle of
benefit each derives. It outlines a strategy for rethinking technology
deployment in the non-profit arena given this reality by focusing on some
new technology initiatives that have only recently become available. Other
articles can be found at: http://www.soros.org/internet/index.html

RGDS

JP

----

Rethinking Technology in the Non-Profit Arena: Strategic Differences & New
Models of Deployment
By Jonathan Peizer

Deployment of technology in the non-profit and for-profit sectors is similar
in many respects. However, it fundamentally differs in some important ways
as well. From the strategic planning perspective many non-profits define
their mission and view organizational capacity building differently than
their for-profit counterparts. This impacts significantly on success and
level of information technology ("IT") deployment. Keep in mind the
differences outlined are generalized for the two sectors. Individual
organizations in both sectors may differ in approach.

The overarching strategic goals for deploying technology in both the
commercial and non-profit sector are similar. They involve effectively
meeting mission objectives by increasing efficiency and productivity and/or
reducing overhead costs. Tactically, the deployment of software, hardware
and training are similar as well. For example, implementing software in
either the for-profit or non-profit environment still entails the basic
project lifecycle of design, programming, data conversion, testing,
documentation and training. More handholding and user support is generally
required in the non-profit sector for reasons outlined later in this
article, but the various elements underlying a technology deployment are the
same. What differs are the two sectors' approaches to IT strategy. This
article outlines the differences and offers a number of newly emerging
models of IT deployment in the non-profit arena designed to better deal with
these differences.

Interpreting The Mission

Successful commercial entities have clearly defined bottom line goals and
objective measurements to determine if they have met them. Strategies to
meet these objectives tend to be just as crisp and clear. By contrast,
successful non-profits often have missions that are subjective and open to
interpretation, even by the staff who carry them out. Objective metrics are
also difficult to come by because success is often dependent on the extent
to which individual lives are affected over the long term. It's no surprise
therefore that non-profit strategies flowing from the mission tend also to
be subject to interpretation and difficult to measure.

This difference has clear ramifications on IT deployment, particularly on
the software development and implementation process. The building blocks of
successful software deployment are dependent upon clear business and
technical requirements that adequately define needs. Commercial operations
often have this clarity of vision and the requisite business and technical
requirements to go along with them. If they do not, they make the capital
investments in training and development to insure they get them. Non-profits
start out with a more complicated set of issues related to software
development because their business and technical requirements tend to be
more subjective as well. In most non-profits, implementing accounting
systems is one of the easier IT software deployments. That is because
accounting systems do follow clear AICPA standards. Implementing
mission-based systems is significantly more difficult because of the
subjectivity of any standard rule base. In the binary world of 1's and 0's
clear requirements are an imperative. Non-profits therefore need more time
and resources than for-profits do to insure their requirements can be
adequately refined before achieving a successful software implementation.
Unfortunately, they tend to invest less in the necessary resources.

There is another element of organizational psychology that is an outgrowth
of the interpretable mission and the humanistic approach to management NGOs
take that directly impacts the deployment of IT. IT implementation efforts
are usually rather disciplined affairs. Their success is dependent upon
significant personal investment by both the users and technical
implementers. Without this discipline, there are many places where a
technology effort can go significantly wrong and cause an expensive train
wreck. Non-profits are more likely to manage by stakeholder consensus then
for-profits do. The opinions of skeptics who interpret the needs differently
in this environment may be given more weight than their for-profit
counterparts even if they have less experience with successful technology
deployments. In my experience, a well-placed skeptic in a non-profit
technology deployment has far more potential to derail the effort than one
in a commercial context. There are only two effective ways of
short-circuiting this problem. One is to engage in the same management
approach that for-profits take to such dissent after a decision has been
made. The second is to focus on systems deployment only with that part of
the constituency that wants to implement new systems and to bring the
skeptics in once a success is achieved.

Investing in Capacity

Commercial entities and non-profits view strategic investment in
organizational capacity very differently on the administrative side of their
organizations. Unfortunately, this is where the technology component usually
lies. Commercial entities understand that to use technology strategically to
meet objectives they must make the appropriate investment in organizational
infrastructure. This investment is viewed as one of the critical components
necessary to achieve IT related goals. By contrast, investment in
infrastructure in the form of administrative support has historically been
viewed by the non-profit sector as, at best, a necessary evil.

Given the choice between upgrading a computer and inoculating ten more
children, most non-profits opt for the latter, much more compelling need.
Most do so even if choosing the computer might result in feeding or
inoculating 100 more children one year down the road, simply because the
current need is so pressing and mission focused. This attitude is reinforced
by funders who support specific non-profit projects that meet their
guidelines while doing their utmost to limit funding of overhead or
administrative costs. Few funders support IT capacity building for
non-profits as a portfolio item. Even fewer support non-profits
experimentation or R&D with technologies that might prove unsuccessful. On
the other hand appropriate capacity building and R&D funding is a staple of
IT deployment in the commercial context.
Commercial entities have been investing in technologies since the 60's to
support their back office functions. In recent years new technologies have
facilitated adoption of mission critical applications (sales, marketing,
customer service, etc.) by the front office of many businesses. These
technologies have been more easily adopted by the commercial sector not just
because they are willing to invest more but because they have already had a
long history of technology use and the efficiencies it afforded them. By
contrast, non-profits have not had this history. The expense of technology
to fulfill back office functions was often seen as a luxury and
supplementary to meeting strategic mission objectives. Now that
mission-critical technology components are available to non-profits, their
lack of historical use of these tools makes them more reticent to invest in
adopting them.

If one had to rate the most important components of technology deployment in
terms of software, hardware, personnel and training, personnel would
probably rate first or at least tie with training. Technology personnel are
generally much more expensive than other non-profit staff. While they are a
critical component of any IT deployment, often non-profits' donors do not
make the appropriate investments in them. This rather dangerous strategy
puts any hardware or software investment in significant jeopardy in terms of
both implementation and future maintenance. Ironically, this problem is
directly related to the commercial sector's understanding of how important
technology personnel are to successful IT deployment. By valuing their skill
sets so highly they drive up their market price.
There is an inherent catch-22 involved in NGO reticence to build capacity
that it cannot support presently, even if it results in enhanced operation
that might support the capacity in future. Lack of IT capacity often leaves
senior management in the non-profit sector without a technology advocate in
the organization. Many commercial entities launch into new technology
initiatives because they have the staff on hand to design, sell and execute
an initiative internally. Unless senior management in a non-profit have this
understanding or can rely on a non-tech advocate to sell a technology
approach, new initiatives simply do not occur except where current
technology is so outdated that it begs for change. Technology efforts are
often reactive rather than proactive in the non-profit sector.

Training as a Capacity Issue

User training also rates far higher in the successful deployment of
technology than either hardware or software. Commercial entities tend to
view IT training as just another critical component of proper investment in
the successful deployment of technology initiatives. By contrast,
non-profits have a hard time justifying training in anything but issues
directly related to their mission. Aside from funding, time is the other
critical element in shortest supply in the non-profit environment. The
following profile is similar in most successful non-profits: dedicated,
overworked and underpaid people who see their work as a mission rather than
a job.

Non-profit personnel will often complain they simply do not have time for
supplementary training. This is particularly true for technology training
which is often not intuitive, unfamiliar, scary to the computer phobic and
not clearly related to meeting the mission. Non-profits often have very high
turnover because salaries by necessity are lower than in the commercial
sector. There is often little strategic thought given to career advancement
initiatives. So people move on to more lucrative careers in the private
sector or better jobs at other non-profits. Investing in training in this
environment often has the additional negative of expending limited resources
on people who might not be around to use it for the benefit of the
organization. While this is a very shortsighted strategic approach, it is
not surprising given the limited exposure of most non-profits to the
benefits of technology in enhancing their core mission objectives. There
tends to be the mistaken belief that simply having the new hardware or
software is enough without investing in the requisite training to
incorporate it effectively into one's job function. Proper training in the
use of technology is an imperative. In fact, any investment without it as
key component is a waste of both time and money. Documenting a process
correctly (e.g. written training) also ensures that if staff turn over,
another person can more easily pick up the task.

The Cycle of IT Investment & Benefit

The same inducements that drive for-profit entities to invest strategically
in technology are not there for non-profits. Commercial entities invest in
technology to meet clear objectives and generate more revenue. This allows
them to reinvest in order to achieve even greater efficiencies and revenue
growth. There is a clear cycle of benefit that reinforces proactive
investment in technology.

By contrast, non-profits that invest in technology may very well become more
productive and efficient, but this does not necessarily translate into
generating revenue to continue making IT investments. Unfortunately, these
investments often need to be continuous once made because of the pace of
change. Non-profits may attract more donors because of their efficiency or
efficacy but not necessarily more dollars to support their technology
investment. Those who understand they can use technology to generate
sustainable income may also encounter the problem of funders who indicate
they want to see sustainability, but conversely cannot support social
ventures that generate income. If a non-profit can generate savings or
income from technology investment, and can justify even further efficiencies
from future investment, it is best to reinvest any internal gain. The
alternative is relying on outside funders to support this activity. They
tend to do so only if the technology investment is directly related to
fulfilling the objective of a project they wish to support.

Rethinking Non-Profit IT Investment

There will always be well-funded non-profits or non-profits that see
technology as a way to achieving their objectives most effectively. They
will make the appropriate investments and commitments to it. But these
represent the vast minority of a very large global sector, many of whom
share similar issues and missions across geographic boundaries. Lower entry
costs, and more mission-related technology applications like the Internet
will influence a larger majority of non-profits to embrace at least some
investment in it, certainly more so than when IT investment was primarily a
back office function. However, it is too much to expect that the majority of
non-profits will start making the proper technology investments to build the
appropriate IT capacity internally. Twenty years from now, technology and
technologists will still be costly items for a significant proportion of the
non-profit sector to afford.

Even if the cycle of benefit differs between non-profit and for-profit
technology investment, it is still important for non-profits to make these
investments if they allow them to work more effectively and efficiently to
meet their missions. Because the differences with for-profit IT investment
lie in some key strategic thinking related to capacity building and mission
definition, alternative paradigms must be sought to address and leverage
these differences effectively. If much of the problem lies with limitations
of investment in IT capacity building within a non-profit organization, then
solutions that foster the development of IT capacity outside of individual
NGOs should be seriously examined.
Non-profits are influenced by "trusted source" relationships with other
organizations in their sectors who share their missions and beliefs. They
are also influenced by the interests of their funders. The nature of many
non-profits to trust their peer organizations and share resources needs to
be better understood and leveraged by both non-profits and their funders in
the IT space. Sharing resources not only reduces the costs of IT deployment,
but naturally creates a set of standardized requirements, making
implementations that much easier.

NGO IT Support Organizations

Related to capacity building and training, the fairly recent emergence of
organizations like the APC, NPower, Compumentor, Netcorps, Project Alchemy,
Harbinger, etc. all bode well for non-profit technology assistance. These
organizations are themselves NGOs dedicated to providing different forms of
IT assistance from technical support to training to application hosting for
various sectors and geographies of non-profit groups. The better
organizations are staffed by highly competent technologists and associated
skill sets. The interesting twist here is that as NGOs, they have the trust
of non-profits who trust that they are sensitive and understanding of their
needs. Because these groups operate on sustainability (rather than profit)
paradigms, overhead is lower and therefore IT assistance to non-profits is
provided at lower costs. These organizations can demonstrate solid examples
of effective IT use to their client constituencies in a compelling manner
that they both understand and relate to. Unfortunately, the same
trusted-source relationships are not as easy with for-profit IT service
providers because the profit versus mission focus tends to create a certain
arms-length relationship.

Funders are much more likely to support IT funding for non-profit technology
assistance groups whose mission it is to provide this service to hundreds of
non-profits. It is far less costly and more efficient than funding hundreds
of individual organizational requests to build IT capacity. These
organizations represent a natural distribution channel to insure that online
shareable resources created for the non-profit environment reach large,
medium, small and grassroots organizations worldwide.

Application Service Providers (ASPs)

The emergence of ASPs dedicated to developing and hosting software on the
Internet that dispersed constituencies in an organization can access for a
reasonable fee is also an important IT development for non-profits. It
enables them to forego costly up-front investments in technical
infrastructure to deploy a viable system internally. It may also allow them
to more effectively share resources across organizations. The ASP paradigm
offers another interesting benefit as well. Some organizations get hung up
in the design component of their software development effort. They point to
their uniqueness as a reason for defining requirements that are so
sophisticated that only costly and complicated systems can meet them. The
nature of an ASP's ability to share information across even a dispersed
organization may necessitate less sophisticated requirements in the first
place. The lower entry costs also provide a compelling argument for
standardizing some needs around what the system offers in order to accrue
its many other benefits. By contrast, if an organization is paying a
substantial amount up-front for an in-house software development effort,
there is far less impetus to settle for anything less than 100% conformance
to requirements however over-individualized or complicated.

There are issues still to resolve in the ASP approach including privacy,
security, bandwidth, offline clients, customization, ASP switching and
training. However, a number of the non-profit technical support
organizations also have ASP projects in various stages of development using
open source tools and licenses that allow the type of flexibility required.
This coupled with their other support and training services offer a
compelling and interesting future for better IT adoption by the non-profit
sector.

Content and Resource Aggregation

Another interesting development is non-profit sites that aggregate content,
for non-profit constituencies like oneworld.org, mediachannel.org and
civilrights.org. A number of other excellent examples exist of non-profits
sharing content on line and linking to form sectoral hubs that people can
enter regardless of what single site in that sector they visit.

Specialty IT information support, services and online tools for NGOs
provided by sites such as helping.org, techsoup.org, npower.org,
socialecology.org, techrocks.org and others are a hybrid aspect of all these
phenomena aggregating various online IT support services to the non-profit
sector.
What all of these efforts have in common is that they are managed by
non-profit organizations which understand the impact of technology and have
invested in developing resources on line to help similar constituencies.
They are using the Internet's natural collaborative tendencies to leverage
IT deployment across their various sectors and for the benefit of many
organizations, not just themselves.

Summary

Taken as a whole, all these new structures offer non-profits a way to invest
much less significant amounts up front to access stable and reliable IT
software, infrastructure, training and support services. Just as important,
it allows them to share information and organize effectively across
organizations. I say invest less. Investment and commitment is still very
much required.

Funders as well should be seriously cognizant and supportive of the
aggregation efforts, online software tools and IT support organizations
currently working or being developed. They provide cost-effective funding
opportunities to foster significant systemic change in the way non-profits
take better advantage of IT to meet their mission objectives. While not a
panacea for solving the non-profit technology investment conundrum, it
certainly affords a practical alternative to the current paradigms that
require significant internal capacity building as a prerequisite.

Most of the efforts already mentioned are still disjointed, or more
accurately tied to particular sectors and geographies. They are not
necessarily well 'marketed' to all the constituencies that could benefit
from them. Moreover subsidies for many organizations to take advantage of
these services are still required. Technology is not intuitive to many
non-profit organizations. They need support in the form of subsidies to try
the services before deciding how and if they will prioritize and incorporate
them into their organizational mix.

To really create an effective non-profit IT deployment alternative, all the
efforts need to be more interconnected. The various NGO IT support
organizations need to be better linked and extended into a national and then
international network. The online tools and ASPs that currently exist could
then be better marketed and distributed through them to local constituencies
with the necessary training and support services provided.

Funder support has a significant influence on non-profit organizational
behavior. If it is understood that funding support for capacity building in
the IT sector is focused on non-profit technology providers of low cost
services and free shared resources, non-profits will more than likely
gravitate towards them. This in turn will reinforce the providers and their
offerings and create even richer services to the constituents through this
shared approach. The difficulty for funders is deciding who the best
providers are in this nascent industry and what organizations still really
deserve individual IT investment. There will also certainly be (as there are
now) for-profit players with appropriate sensitivity to non-profit needs
that participate in this evolution.

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