Do Non-Profits Want Hosted Software?

Online Fundraising, eCRM

Do Non-Profits Want Hosted Software?

01.07.09 | Comments

Charlie Crystle leaves us with a funny piece of marketing data:

CC: Our research showed us that 85% of the non-profits did not want hosted software, they wanted desktop software. We developed a platform that merged the power of the desktop with web services. That was back in 2002.

I’m actually a fan of GiftWorks and it works very well for nonprofits in the developing world that may not be able to use a SaaS solution such as salesforce.com because they don’t have dependable Internet connections. That said, for US nonprofits, I suspect they have reasonable Internet connectivity so I don’t usually recommend GiftWorks if a SaaS solution is otherwise available. The information that Charlie Crystle shared in the interview is obviously six years behind. Anybody care to take a stab at the question of what percentage of nonprofits would not want hosted software in 2009? My guess is that it’s down to 50% now.

Tagged: Charlie Crystle, Giftworks, Sramana Mitra

Relevancy Ranking
Why did you post this???

(2 votes, average: 3.00 out of 5)

Loading ...

Comments

On 01.07.09 Travis said:

In 2002, I was working for a member of Congress in a rural/suburban district in Upstate New York. I remember talking to the campaign staff about deploying a new website and was shot down because our polls had only 32% of the voting population in the district had a home computer and an Internet connection.

Since then, I have followed the numbers and the census in that district. Currently the number of households with a home computer and Internet access is well over 80%. To your point, a lot has changed since 2002 regarding Internet access. I would venture to say that with widely accepted solutions on the market like SalesForce.com, the number is more like 35%.

On 01.07.09 Allan Benamer said:

Thanks, Travis, for your comment. So you think only 35% of US nonprofits won’t want hosted software? I guess you’re more sanguine about nonprofit capacity than I am. Any other guesses from the rest of you?

On 01.07.09 Jeremy Heffner said:

What I find in day to day work with the nonprofits we deal with at NPower PA, is that the SaaS model is quite foreign to nonprofits. It isn’t so much that they don’t want it, it’s that they don’t understand it — “You mean my donor database sits out there somewhere that I can’t point to?”. I think this stems from a lack of ongoing support to build trust in technology.

That being said, the percentage you’d get would be largely based on the way the question was formulated. I would peg it at 80% not realizing this new model existed as an option, and 50% not wanting it once it was explained.

On 01.07.09 Allan Benamer said:

Thanks for commenting, Jeremy. Yeah, I’ve noticed that nonprofit managers usually make the mistaken assumption that on-premise software is either more reliable or more secure than SaaS. They don’t drill down enough and worry about issues like business continuity (always a worry in NYC or California). That’s always been one of my major concerns. Have you ever tried discussing business continuity as part of your “sell” for SaaS solutions?

BTW, hope you keep up your blogging at http://nonprofitdata.org!

On 01.07.09 Iain said:

My non-profit is in the process of going fully Saas – it makes no sense for us to manage these systems in house. Ultimately it’s cheaper, more reliable and more efficient.

On 01.08.09 Tad Druart, Convio said:

"Nine out of ten companies plan to grow their use of software-as-a-service (SaaS) in the next year, according to a survey by Gartner." That came from a ComputerWorld article in December (http://www.itworld.com/saas/58645/gartner-saas-gr...That sentiment was echoed in a number of other outelts and in the continued interest in our multi-tenent , SaaS solution. As more IT professionals embrace the value of SaaS, and we do a better job of translating techno-speak into langauage that NP professionals understand, adoption could very well soar.

Open SaaS applications also increase the availability of cutting-edge technology to NPOs, without the hassle and worry of managing or supporting the infrastructure. More than a delivery model, it has become a growth engine driving results in fundraising, advocacy and communication; and by driving efficiency, effectiveness and productivity it is valued as a "cost-containment model" as well.

As you've said in the past and the comments here reflect the days of technology being a cost of donig business are behind us. Software and technology must help drive mission-value.

On 01.08.09 Allan Benamer said:

The big question is whether that 90% translates to nonprofits as well. I guess there's always some lag as nonprofits don't feel invited to the general tech party until they see a clear and distinct label that says "You [insert nonprofit name here] are invited to use this new technology." Right now, that ain't coming from Blackbaud. Tad's a lucky dog these days as Convio seems to have embraced SaaS fully using Salesforce no less. That's kind of a double SaaS solution. I'm hoping my favorite opensource fundraising vendor, MPower Open, can get into the act as well. And of course, we have to wait for the Big Dog, Blackbaud, to come to the table. Woof woof!

On 01.08.09 Patrick Shaw said:

Maybe Seattle is in a bubble – but a LOT of my customers are pretty jazzed about not having a server, not having to configure desktops, not having to manage backup and redundancy. And jazzed about being able to have their tech support (internal or external) able to help from afar.

And they don’t seem to care about local vs. hosted, either. I mean – all are careful about asking questions about security, redundancy and so on -but they ask those about local solutions, too. In a similar fashion – my customers aren’t asking for “what CMS should I use?” – because they ARE asking “how do YOU implement a CMS, and how can you support my use of it?”. Most don’t give a rip about which one – because they’ve figured out that there is a lot of great software available – either as a service or installed locally.

On 01.08.09 Ryan Scott said:

I think a better question is – does non-hosted software even make sense anymore? Especially in the case of non-profits who need everything from 24 hour online donations to automated donor management, social networking, and everything else that’s critical today, no, old fashioned software doesn’t make sense.

When you can combine the best features of the best sites and tools into a dynamic and useful SaaS web package that does everything you could want, is always current, and lets you share your data across your organization even if everyone is in different places, never deal with MIS problems or lose data – I can’t think of why software would be written any other way, except for reasons of inertia, or misinformation.

SaaS has made a lot of sense for a long time and has been going on for a while – this is barely a question anymore in many other industries. Back in 1995, I created an opt-in email management service online – SaaS. The lack of costs associated with distribution, installation, tech support allowed us to grow the company much more quickly than if we were dealing with the bulky physical reel-to-reel tapes of the industry we were replacing. We were able to spend all our time growing and selling the product. We only had to maintain one piece of software. And our customers never had to maintain anything. We were able to go through about 9 iterations of the software in 6 years without ever having to install it on someone else’s computer.

In fact, my current company uses nothing but SaaS. Everyone has to use google documents (shared online document editing), google sites (shared corporate information in a wiki format), google calendar (we can share calendars), and gmail.

This stuff works 99.99% of the time and is free. Do your desktop computers work 99.99% of the time? I guarantee you not. At my company we have no software problems. And since we switched to Macs, we have no computer problems. And since all our data is stored online, even if a computer fails, the employee can jump right onto a laptop and not miss a beat.

Our website combines features from all the best of breed sites into a non-profit management ‘mashup’ of sorts. That is, if we need to display a map, we use google maps. It would be insane to write our own mapping software when this is available for free and will always be updated. My company gets to take advantage of the 10’s of millions of dollars in research and development that went into google maps, for free. And further, this allows me to offer it to non-profits for free. Everybody wins. There’s thousands of these SaaS tools available, generally for free with collaborative features that are difficult or impossible in desktop software, and most of them have APIs, which means you can read and write information to them.

It’s hard to imagine software not working this way anymore.

On 01.08.09 Marion said:

I have had an interesting experience with nonprofits more than once on this subject when I was strongly recommending a SaaS solution for them. The response: We have a grant to BUY a donor database package and don't want to not use the grant by getting a SaaS application. I've suggested that they see about purchasing a multiyear subscription, etc., etc but this goes nowhere. They never seem to get that buying software for their desktop is not a onetime purchase.

On 01.08.09 Allan Benamer said:

Ryan and Patrick, I’ve been pushing for more SaaS and virtualized server solutions for nonprofits so I definitely share the same sentiments. However, do we really know what the general nonprofit sentiment is out there? Has NTEN ever done a study or does anyone know of any kind of survey measuring nonprofit IT director attitudes towards SaaS software?

On 01.09.09 Ryan Scott said:

Great points.

The message "You [insert nonprofit name here] are invited to use this new technology" is going to come from Causecast.org in about a month.

The idea is to provide all the web 2.0 tools, provide all the distribution, provide all the infrastructure from blogging all the way up to video hosting and social networking, in an environment where the orgs don't need to follow these technologies like geeks, or hire a staff of them. And to provide this, as much as possible, for free. In order to have the largest impact, the technology needs to be easy to use, free to use, and yes, the orgs need to be invited to use it.

On 01.09.09 jerheff said:

You're welcome. I think the culture of raising funds for discrete projects that stop and start is what fuels it. If you have to fundraise to acquire a new application, it's a set amount of money, not an ongoing stream to pay for the cost.

Business continuity is indeed a sell, but the organization that sees the need to spend time and money on planning for continuity often appreciates the SaaS model.

On 01.09.09 Jeremy Heffner said:

Hey Patrick —

Not sure about a Seattle bubble; but all too often we run into organizations looking to build out their Filemaker and Access databases. I don't think SaaS is on the radar of most organizations, although once they understand it, they embrace it.

On 01.10.09 Charlie Crystle said:

This is Charlie.

It's interesting to read the comments and to see great insights–as well as significant biases. When we started our bias was to build a hosted solution. But the nonprofit bias was for the desktop, so we chose to build a desktop-centric hybrid-web model. The company's bias has been to match the customers bias, which has been the desktop, but we're indeed seeing greater pull for hosted (though not dominant by any means). Selling against customer bias is pretty tough. (BTW–most of the 7,000 GiftWorks customers are in the US and have good connectivity).

My guess is that ease of use, features, quality, and customer service play a big part in the decision-making process. I'd submit that most nonprofits really just want the software to serve their needs. GiftWorks doesn't serve the needs of huge nonprofits–we don't scale to millions of records (a conscious choice) and it currently doesn't serve the needs of distributed teams. That said, it's great fundraising software that serves the needs of a good chunk of the sector, and will have some integrated web services starting this month. ..(continued)

On 01.10.09 Charlie Crystle said:

(cont.) Thanks for listening. After 7 years, I've decided to resign as CEO (announcement is coming–serious burnout) and am now just a board member. The company will be led by Mary Pat Donnellon, who has led the GiftWorks effort for a year and is very passionate about serving nonprofits. I love the nonprofit community–it's great to work with people trying to have positive impact on the world.

On 01.10.09 Allan Benamer said:

Charlie, thanks for coming in. Sorry to hear you're leaving GiftWorks, stick around the sector though. You're doing great work. I hope you consider making a SaaS version of Giftworks in the long run. I agree with you though, I certainly have my biases and it's good that you note them. I think long-time readers of this blog know I'm a pain in the ass regarding SaaS vs. on-premise solutions so I think they take my agita with a grain of salt. I just worry more about the delivery method of software than the software itself.

That said, you're right about those sales issues. You can't "force" non-profits to one particular type of solution (even if you think it's the right one). That's not the way nonprofits think about their fundraising software. However, I hope in some tiny way with my blog some nonprofit managers will at least rethink their existing bias in favor of mine. I'm sure you'll agree that from a maintenance point of view on the part of a software vendor, a SaaS solution is much easier to update and support than on-premise software.

On 01.10.09 Allan Benamer said:

Marion, sorry for the delay in putting up your comment. For whatever reason, IntenseDebate (the new software I installed to moderate comments on the blog) thought your comment was spam which it most assuredly is not. I hear you though about the difficulties in changing the terms of a grant to fit the SaaS model. Grantmakers and grant administrators don't usually keep up on IT trends so they don't understand that maintenance costs are associated with software EVEN if it's on-premise. For instance, Blackbaud charges licensing and support fees per year. It has to be budgeted in and woe to the non-savvy IT Director who forgets to put that number into their budget or their grant request.

On 01.11.09 Charlie Crystle said:

Thanks.

If your computer goes down and you are using SAAS, then you switch to another computer and log in, correct? But that computer must have a browser installed, and it probably does. The solution is the same in a desktop-app environment. Computer goes down, you switch to another one with GiftWorks and you're good to go. My point is that there currently are tradeoffs on both approaches.

Ideally, your data is replicated in real time–perhaps to the cloud, perhaps across other desktops in a peer system, perhaps to a series of backup servers. Perhaps your app is similarly available–if a desktop app, then hosted at a Citrix farm, or running on any number of machines, OR running as a web app in parallel with the desktop app, and your data is both online and behind the firewall. That last combination might nail all points–data available regardlessof app uptime, accessible through whatever app interface is needed or available.

On 01.11.09 Charlie Crystle said:

(continued) BTW–my work will be on consulting to tech companies (rent a CEO), but my main focus will be on getting universal healthcare in my state of PA through a single-payer system. The Obama plan won't get us there, and costs will still go up for businesses/nonprofits/schools,etc while failing to cover everyone. So I'm still working with a lot of nonprofits this year. GiftWorks is in great hands, I'm happy to say.

On 01.13.09 Allan Benamer said:

Charlie, the idea of running a regular on-premise app on a Citrix farm AND a SaaS app on top of it seems to me to be fairly wasteful and expensive. In a world of limited resources, I'd think both the vendor and the user community for such an app would end up relying on one over the other. It wouldn't really guarantee more uptime either because if your Internet connection goes down, you'd lose access to both your virtual server and your Web application. Clearly, the best move would be to have a small offline app to do data entry in case the Internet connection goes down. Also, from a user training perspective, we'd have to hope that both UIs were fairly similar.

On 01.14.09 Laura Quinn said:

A little late to the party, but… a few thoughts here, based on our research. As others have said, I think there's two questions – what do nonprofits want, and what SHOULD they want?

There's good reasons for wanting an installed systems, particularly if you compare the actual hosted vs. actual installed systems available. Things like mail merges, querying, reporting, and generally easy to use interfaces are easier to build in an installed system, so often those systems are stronger in those areas. You also have more control and often more options over what you can do to the system, if it's installed on your own network. Just to put that out there to weigh against the many pros of hosted systems that folks have already mentioned (that I agree with, by and large).

I do find, though, that many of the folks that say they want an installed system don't have good reasons for wanting one. They often mention things like security or wanting to own their data as reasons they don't want a hosted system… which are not well founded reasons, in my mind.

On 01.14.09 Allan Benamer said:

Thanks Laura. I think you hit the nail on the head here. There are things I want to say in a prescriptive manner about how nonprofits should use technology and there are things that are just descriptive. It's clear that both myself and quite a few of the commenters here are advocates of hosted solutions. Of course, Charlie, when selling his software, has to live in the world of the possible. That's the big disconnect here. It's not entirely the case that vendors are reluctant to make a change to SaaS (although thankfully Convio seems to have negotiated the transition), it's also a problem that originates from nonprofits themselves. Customer bias can be a powerful factor in software purchases. I'm just hoping that the general consensus on this blog and elsewhere in the nptech world will at least force nonprofit managers to rethink their biases. I believe that most people already use hosted solutions for the most part if they have personal e-mail accounts on Yahoo, Gmail, AOL or Microsoft. They just have to extend that thinking to cover their other interactions with software.

That said, I'm a huge supporter of Laura's efforts at Idealware and have in the past donated to her organization. Just so you readers know, we have never collaborated on research together.. It just so happens that we have a tendency to reach similar conclusions more often than not.

On 01.14.09 Allan Benamer said:

Thanks Laura. I think you hit the nail on the head here. There are things I want to say in a prescriptive manner about how nonprofits should use technology and there are things that are just descriptive. It’s clear that both myself and quite a few of the commenters here are advocates of hosted solutions. Of course, Charlie, when selling his software, has to live in the world of the possible. That’s the big disconnect here. It’s not entirely the case that vendors are reluctant to make a change to SaaS (although thankfully Convio seems to have negotiated the transition), it’s also a problem that originates from nonprofits themselves. Customer bias can be a powerful factor in software purchases. I’m just hoping that the general consensus on this blog and elsewhere in the nptech world will at least force nonprofit managers to rethink their biases. I believe that most people already use hosted solutions for the most part if they have personal e-mail accounts on Yahoo, Gmail, AOL or Microsoft. They just have to extend that thinking to cover their other interactions with software.

That said, I’m a huge supporter of Laura’s efforts at Idealware and have in the past donated to her organization. Just so you readers know, we have never collaborated on research together.. It just so happens that we have a tendency to reach similar conclusions more often than not.

On 01.15.09 Charlie Crystle said:

Right–not what I was saying. Nevermind…gotta run.

On 11.12.09 imergent258 said:

It's cool that you are putting your passion for writing to good, I am in the same situation and it was long overdue! I'll subscribe to your feed, thanks again.

On 11.12.09 content filtering said:

Thank you for this precious post. I like the way you present the post.Very clear and useful for a newbie like me. Keep blogging. Looking forward to reading your next post.

speak up

Add your comment below, or trackback from your own site.

Subscribe to these comments.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>