Calculating budget and understanding ROI when investing in digital transformation

Advice for nonprofit organisations on how to ensure technological improvements that are cost-effective and ROI positive

We understand that every penny counts when an organisation chooses to invest in internal transformation, and stakeholders need you to be meticulous when budgeting for such projects. That is especially the case for nonprofits. We have therefore put together our seasoned advice on determining your budget, making sure that budget is put to the best possible use and calculating the intended outcome of your project.

How to determine budgets for your digital transformation project?

Knowing how much you should be investing in digital for your nonprofit is obviously a complicated topic; one that will vary greatly depending on your organisation and your mission.

The first point of call for most nonprofits will undoubtedly be consdering budget and fundraising cycles. You need to work out what you can afford to invest and when the best time of year to do so is. Especially if you’re a solo digital advocate who needs to get the buy-in of top level decision makers, timing your proposed project is everything.

Secondly, it helps to determine the potential end value of digital transformation for your nonprofit. Working out the return will help you identify the investment needed.

Most often, the return comes down to where the gaps are that you’re looking to fill…

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Where should the budget be spent to have the biggest impact?

First, consider your goals and the technological hurdles that are slowing your progress to achieving them.

For example, imagine your goal is increasing funds through encouraging a higher number of individuals to donate. Your current pain point is that it takes your team a long time to identify and reach out to suitable donors. You are therefore looking for technology that will help you cut down manual outreach processes by half, that could mean that you’re able to reach out to twice the volume of potential donors.

Take another example…

You’re looking to quickly engage volunteers and supporters in response to an ongoing crisis, but your volunteer database is complex and spread across multiple data banks, spreadsheets and the like. Technology enhancements would allow you to segment your database and group together your most active volunteers. As a result, you could quickly engage that ‘low hanging fruit’ segment for a fraction of the time and cost.

Once you have an idea of your own gaps and pain points, you can add numbers to your ideal outcome and work backwards from there based on an ROI that is acceptable to you…

How to calculate expected ROI from your digital transformation project?

In addition to going through the process above - to quantify expected new donations, volunteers engaged or manual hours saved, for example - we recommend having a look at Salesforce’s ROI calculator.

This calculator allows you to input details about your organisation and it generates guidance on the potential value you could get out of technical enhancements. Even if Salesforce isn’t going to be the way forward for you, it’s a good way to get you thinking about the time/money that you may need to put into technology and what you could get out of it.

Talk through the process with the experts

Our dedicated nonprofit team (4C 4U) are highly experienced at working with organisations to carve out the digital path that’s going to work best for their mission. Whether you’re still in the stage where you’re working out if technical change and digital transformation are right for your nonprofit, or if you know what you’re looking for but want to talk through the steps to get there - our door is always open. Fill in our quick contact form today and one of our experts will be in touch shortly.

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