Magazine article Strategic Finance

How Nonprofits Use Online Technologies: Online Technology Can Be a Great Enabler for Nonprofit Organizations, but How They Leverage It Varies Depending on a Number of Factors

Magazine article Strategic Finance

How Nonprofits Use Online Technologies: Online Technology Can Be a Great Enabler for Nonprofit Organizations, but How They Leverage It Varies Depending on a Number of Factors

Article excerpt

According to the Comparative Nonprofit Sector Project at Johns Hopkins University, the nonprofit sector is the world's seventh largest economy. Referred to by some as the Third Sector, the nonprofit sector is as large as the global construction industry In the United States, 22% of the population volunteers its time, and 10% of Americans are employed in the nonprofit sector. And in Norway, which has the highest rate of volunteers, 52% of the adult population donates time.

We are all affected by the nonprofit industry-whether as employees, volunteers, members, donors, or simply part of the general public. As IMA[R] members, all of us want to help the organizations we work with achieve best practices in accounting, finance, and governance. Technology and its users play an integral role in this effort, and management accountants can help ensure that nonprofit organizations are utilizing these tools properly and following established best practices. Having a better understanding of how nonprofits use available technologies-and the various factors that influence that usage-will help that effort.

The annual "Blackbaud State of the Nonprofit Industry Survey" asks nonprofits around the world about their technology and Internet usage. More than 2,000 nonprofit organizations from 10 countries responded to the survey Respondents are asked the extent to which their nonprofit organizations use, provide, or conduct any of the following via the Internet: advocacy, campaigning, electronic newsletters, email, event registration, fundraising, member acquisition and management, online payments, polls/surveys, retail (sell goods online), search engine optimization, social networking, "sponsor me" or group fundraising, supporter profile updates, volunteer management, weblogs, and website analytics.

The results from the survey show that most organizations find traditional methods of fundraising, such as events and direct mailings, more effective than online methods such as social networking and search engine optimization. Respondents from all countries surveyed reported a significant gap between the importance of a single database of supporter information and their own organization's performance in achieving that goal.

SMALL VS. LARGE

While valuable, the results from the Blackbaud survey focus primarily on larger nonprofit organizations. For example, U.S. nonprofits that responded to the survey most often reported revenues in the $1 million-$24.9 million range. So how do smaller nonprofit organizations fare?

As part of a graduate research service learning project with my Master of Accountancy (MAcc) students, we received Blackbaud's permission to pose the technology-related survey question to all of the nonprofit organizations in the state of South Carolina. With the support of The Chapin Foundation, The Waccamaw Community Foundation, and the South Carolina Association of Nonprofit Organizations-the state branch of the National Council of Nonprofits-we disseminated the online survey to all nonprofits in South Carolina.

Two hundred thirty-four organizations responded. Most often they reported revenues between $250,000 and $2.4 million. Since the high point of this range is only 10% of the high point for the broadest size range in the Blackbaud survey, this sample provides a reasonable proxy for smaller U.S. nonprofits.

Students compared the results of the S.C. survey to the U.S. results of the Blackbaud survey to identify differences between small and large nonprofits in the U.S. By looking at the data from Blackbaud's global survey, we can also compare the results of the smaller nonprofits to the nonprofits in all respondent countries. …

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