Non-Profit Tech Blog

NPower posted a white paper on February 22, 2006 to Techsoup called Selecting the Right Technology Vendor. It’s an article purporting to show how a nonprofit should select a technology vendor. Unfortunately, the paper is pretty useless in helping the smaller nonprofit select its FIRST technology vendor. This is because the paper assumes the vendor will be selected on a single-project basis and it ignores participation on the part of the nonprofit’s board of directors and worse, completely nonprofit funding mechanisms and how that can affect the timing of a technology purchase. Is it me or am I getting tired of reading consultant-generated white paper’s that are, consciously or not, grounded in the assumptions of private industry? The nonprofit sector deserves better than this.

Generally speaking, the first technology vendor that nonprofits tend to select are network and desktop support vendors. It’s the first step towards hiring a full-time technical person. Believe it or not, I’ve seen non-profits in the $10 million revenue range still have ONLY a network and desktop support vendor. Yes, I know this is horribly bad IT and fiscal practice (that vendor is in there for life) but nonprofits simply aren’t being told the right kind of advice. NPower’s paper simply continues that trend.

Ok, getting down to business. Let’s assume ACME Nonprofit has finally decided to move away from its donated PCs, cobbled together switches and using “WORKGROUP” as its Microsoft Workgroup name. It’s decided to move to a fairly standard 3 server network setup – Exchange, a file server and a Windows domain/print server, TCP/IP, and a fleet of computers. Oh yeah, let’s throw in an Internet connection as well. And they’re not going to stick the servers in a closet, this time ACME’s leaders promise.

Ideally, what the small nonprofit should do is reach out towards the private sector to find a board member who can help oversee the installation of that nonprofit’s first network and fleet of desktops. Use your board members – I can’t stress this strongly enough. They helped mentor your nonprofit’s leader and they can certainly find someone in the business community to help them grow into this next stage of organizational life.

The worst thing you can do at this point is to build the network without a fleet of PCs. Nonprofits are constrained financially by the need to account for the funds spent on any one particular program. For instance, if $100k was supposed to be spent by ACME Nonprofit on the Books for Homeless Pandas program, any computers purchased for the employees on that project have to be funded by that $100k. This is called restricted funding, funds are earmarked at the behest of the grantor and cannot be spent on any other purpose.

All the other computers in the network may end up being purchased out of a different set of funds. No problem, you say, that shouldn’t matter when you buy the computers. Aye, there’s the rub. The Books for Homeless Pandas program gets its funds on a different schedule than the money for Clothes for Needy Aardvarks Project which also comprises ACME Nonprofit. So… when ACME goes to spend the money on a fleet of PCs, ACME ends up buying TWO sets of computers, one in September and one the next January simply because ACME had restricted funding which meant you couldn’t move the money around in order to cover a shortfall of cash flow in September. This is VERY VERY common in nonprofits. In my mind, restricted funding is THE biggest business-based obstacle to good network engineering in nonprofits. It stymies the ability of the network administrator to adequately plan a network based on a standardized fleet PC. This is what ultimately drives system administrators bonkers as every PC in their fleet is at different stages of entropy straying away from multiply mastered images. TRANSLATION of last sentence: Think of a mechanic trying to fix a fleet of 50 cars, all of them different from each other. That’s mechanic hell and that’s what happens to sys admins at nonprofits.

So how do people get around this issue? This requires a fairly complicated set of financial practices that eventually abstract the financials so that even though the restrictions are still held, they don’t affect the cash flow scenarios of your project. Talk to your CFO, arrange for a leasing arrangement so that your CFO can arrange to supplement project funding with unrestricted funds temporarily to bridge any gaps during parts of the fiscal year. Most large fleet purchases have fairly decent leasing terms. I do NOT suggest purchasing leases with a balloon payment at the end. They’re difficult to plan for since funding sources can change multiple times within the life of a lease.

Restricted funding is an issue not only concerning a purchase of a PC fleet but it can form hidden variables in the decision making matrix for any nonprofit IT Director. Looking at the NPower report just made me chuckle when they presented a decision matrix that seemed to be in a Platonic ideal of 100% unrestricted funding and with limited resources to actually follow through on a very thorough evaluation process.

So here are my following recommendations on selecting a nonprofit’s FIRST technology vendor:

1. Get your board involved — setting up a simple network is not a challenge for the average techie but it means the world to a smaller non-profit. You get real deliverables at the end of this project, shiny new servers, blinking lights, etc. There’s real deliverables here when the ED sends the first e-mail out as a big THANK YOU to the board member who arranged for the installation.
2. Get your CFO involved – ensure that the fiscal stars and planets align before the purchase is made.
3. Get a fleet of PCs for the network — don’t do this via donated computers. TCO is very bad on donated machines and will not allow you to implement organization-wide strategies toward IT. If every machine is different, you can’t cannibalize parts to minimize downtime, you have to ask incoming support vendors to learn the quirks of every machine type your organization has in its fleet. That’s even more money in the vendor’s pocket.