Every organization will have to go through Digital Transformation of some kind. It’s no different with nonprofits. But there are a few key differences for nonprofits vs private companies.

Let’s explore the ADVANTAGES nonprofits can and should really exploit when undertaking Digital Transformation.

1. Nonprofits have something private companies don’t… a powerful compelling purpose staff are already passionate about. That same purpose can be tethered to Digital Transformation to propel the change faster and with greater power. I don’t care if you’re Google or Apple, nonprofit’s purpose will always be stronger.
2. Many nonprofits also benefit from a strong positive culture that’s more allows them to be more resilient to changes, keep their morale up, and persevere through hard times. People don’t just do their job. Their shared cause brings them closer together and they care for each other. They are more willing to stretch themselves and do multiple roles.
3. Nonprofits also have access to volunteer consultants and experts that private companies would have to pay for. They have the ability to fill their skill gaps with volunteers. This may include technical experts that volunteer their hours to achieve a specific change, talented board members, but also volunteer steering committees that can advise on Digital Transformation decisions.

However, there are also a number of equally critical DISADVANTAGES nonprofits have to manage and innovate around during Digital Transformation.

1. Limited budgets is the first and most obvious one. Nonprofits have very limited operational budgets. I always say nonprofits do the same work that private companies do but for half the budget, and this is no joke. Whether you look at operational, IT, and even marketing budgets… we have significantly less resources to accomplish the same work. That’s why nonprofits have to be more innovative and everyone wears multiple hats. Prioritization is critical.
2. One of the results of smaller budgets is that nonprofits cannot pay standard staff salaries. This often results in limited staff skills and capabilities. We often promote from within because recruiting skilled staff that are willing to get paid less then market rates is so difficult. Our training budgets to keep up with various changes (e.g. technology) is also limited. As a result, skill gaps are common. One way to manage this gap is to recruit proactively and continuously vs just when there is a gap.
3. Both of the above also create another key problem, technical debt. Limited budgets and skill gaps force nonprofits to delay their upgrade paths. Sales efforts are commonly prioritized over operational maintenance. Those choices always feel valid at the time… but they eventual result in poor stability / service and significant upgrade budget spikes when technical debt risks grow to threaten operations. Remember that avoiding this problem will always be cheaper then managing it when it gets too large.

It’s interesting to note that all 3 advantages grow out of the strong purpose that a nonprofit has… and all 3 disadvantages grow out of prioritization of budget and efforts.