"Weakened by outdated systems and delayed upgrades, nonprofits' failure to invest adequately in IT carries with it many costs, not the least of which is dependency on private technology vendors. This dependency goes by the wonky name of " technical debt," defined by writers for McKinsey as the "accumulation of all the technology work a company needs to do in the future.""
"The effects are legion: Many nonprofits use donor management systems from decades ago, databases patched across programs, and workflows dependent on staff memory and spreadsheets rather than reliable digital platforms. When key staff leave, much of the "glue" that holds systems together also disappears. The numbers highlight this fragility. According to a 2021 report by Salesforce, 76 percent of surveyed nonprofits say they lack a data strategy."
Nonprofits frequently operate with outdated IT systems, delayed upgrades, and insufficient investment, producing significant technical debt. Technical debt forces organizations to devote a large share of technology budgets to catch-up work, often between 20 and 40 percent. Thin margins exacerbate the burden for many nonprofit organizations. Legacy donor systems, patched databases, and spreadsheet-dependent workflows create operational fragility and reliance on staff memory. High staff turnover removes informal system knowledge. Many nonprofits lack coherent data strategies, and chronic underfunding compels reliance on private vendors for emergency fixes and compliance, enabling vendor extraction of value and mission drift.
Read at Non Profit News | Nonprofit Quarterly
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