Lets face it, technology can be very expensive. This makes budgeting for technology a challenge. It isn’t uncommon for a key piece of technology to cost a month’s salary. Things like powerful computers, projectors, cameras, software, and other services can quickly add up. This is true for your nonprofit just as it is for every business.
1) Make Technology a Program Expense
First we need to start thinking about budgeting for technology differently. It’s not a capital expense, but a program line item. A decade ago most technology purchases were considered capital expenses and we would fund them during those campaigns. If you were renovating an office, moving, or expanding, you would be expected to do a fundraising campaign to cover those costs, and technology would be part of that. Yet the world has changed around us.
This change in the world has woven technology into our lives, work, and communities like never before. Understanding this shift helps us see why it is now a program expense. For example, if you have a fundraising committee and they use an email campaign tool and a donor management tool, those are program expenses.
2) Share Expenses between Programs
The second shift comes to the breakdown of these expenses. Most of the tools and technologies in your nonprofit get used for a myriad of different things. Due to this, we should be budgeting for technology that way. My suggestion is to have a technology expense breakdown spreadsheet that you use to manage the expenses (here is a free template to use).
This makes both the fundraising easier for your technology, and is more honest in your reporting for the actual cost of your various programs. If you have a $1 million dollar budget with $150,000 of overhead that isn’t included in your program expenses, it artificially lowers the cost of your programs.
Instead you should view your technology as tools used for your programs. If you are buying food, printing materials, or renting space for your programs it shows up in the budget. Yet your membership software is nowhere to be found – yet it is how you track events, communications, and reach out to your volunteers.
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