Laura Quinn's blog

The Predictive Power of Plausible ROI

By Laura Quinn, February 15, 2012

Most nonprofits seems to associate a look at Return on Investment with measuring the success of a project after the fact--sort of like outcomes measurement, but with money involved. But in my experience in the corporate sphere--where I spent about five years doing technology consulting with Accenture and other firms prior to moving to the nonprofit realm--ROI is more often used as a predictive tool to look at the possible returns prior to starting a project.

Personally, I think ROI is far easier to approach in this context, and very useful for thinking through all sorts of projects. As every number (both investment and returns) is an estimate, it's not a precise measurement of return, but rather a thought experiment to see the plausibility of actually seeing returns.

Example? Let's say Idealware is evaluating whether it should invest in a document management system, which, in fact, it is--we're looking at PowerPoint slide management systems, a specialized market if there ever was one. We want to think through whether it makes sense to spend $2,000 a year on the system, and an ROI analysis is really helpful in this situation.

First, we brainstorm all the possible costs associated with the system: money, staff time, hardware, etc. Then, we estimate some plausible numbers--for instance, it seems reasonable that it would take about 24 person-hours to set up the system, four hours to train the two people using it, etc.--and assign a dollar value to these hours. None of these numbers is super precise, but they're all in the right ballpark.

Then we brainstorm all the possible ways the system might save us money. How much time would we save in creating new presentations that reuse some slides? How often do we do that? Would it save printing or other costs? Is there a quality increase, and if so, how could we plausibly quantify that--maybe by attracting two more training clients based on the quality increase?

And then we compare. It's useful to put this all in an Excel spreadsheet so you can play with your estimates. You may find that some of the estimates you feel least confident about don't matter much to your final outcome anyway, so you don't need to worry about them.

On the other hand, you'll often find that the entire ROI hings on one or two things. In our case, for example, it mostly comes down to the the number of new trainings we think we're going to create per year. That's not an easy number to estimate, but we can see where we would break even and decide if it's plausible. If we start to make money back after we create five new trainings, that's an easy decision -- we would definely do that. But if the break even is at 30 new trainings, that's a harder decision, and we need to think carefully through what to expect. If it's at 200 trainings, forget it, there's no way that's a plausible investment.

There's a lot of power in the thought process. Just taking an hour to think though a software decision in a quantitative way like this can be hugely useful, regardless of the actual outcome of your numbers.

Blackbaud, Convio, and the Nonprofit Software Market

By Laura Quinn, January 19, 2012

So as you've likely heard by now, Blackbaud has plans to aquire Convio. As two of only a handful of big companies in the nonprofit technology space, this is big news. But what does it mean? There's been a lot of concern and speculation.

Peter Campbell, an Idealware blogger and board member, said: "It seems to me that if I'm looking for an eCRM or DonorDB for a mid-sized org that can't afford to gamble its fundraising system on some clever startup, I have a range of products to choose from, but I'll be sending the RFPs all in one envelope to the same address. Am I wrong about that?"

Gavin Clabaugh said: "It seems a perennial truth that, after the nuptials, merged companies kill the decent products, roll out the crap, and try to tell you that you're all the better for it. One need only look at the undead things called "Computer Associates" or "Symantec" to see the hideous results of such a zombie wedding... Perhaps this won't happen here... Who knows, Blackbaud might just be the better for it, and perhaps their customers will be too... I doubt it, but who knows. They might be the rare exception that proofs the rule."

At Idealware, our job isn't to try to predict the future, but to do impartial research. So for us, it's too early to have specific data. But there's one related piece of research I'd love to do if I had unlimited time and money: Does it help or hurt the nonprofit sector to have big vendors making real money?

This aquisition makes it clear that the financial market cares about what's going on, at least somewhat, with nonprofit software. Is this good or bad for nonprofits? I could see the data lining up either way. I think the nonprofit sector is quick to judge that bigger companies with more financial motives are likely to do worse things, and maybe Blackbaud will -- but they'll also have more revenue with which to try new things, or the ability to support one product (like something for small nonprofits) that doesn't sustain itself with revenue from a product that does.

And it's definitely good news for nonprofits that it's possible to make a living creating software for nonprofits -- after all, we'd have fewer software choices if no one could support themselves creating them. So to my mind, however this aquisition turns out, it's an indicator about something good in the marketplace itself, which is that solid vendors can make enough money from nonprofits to create viable products.

Is Facebook Doomed to Die?

By Laura Quinn, January 13, 2012

The website i09 has an interesting article: Is Facebook Really Doomed to Die?

They ask a number of experts what the think the fate of Facebook will be, with answers ranging from "it will be gone in a matter of years" to a contention that it will "replace regular email and instant messaging as the main way that people communicate with their friends," becoming kind of "the Ma Bell of the 21st Century."

This is all interesting speculation, but what does it mean for nonprofits? I would argue, strongly that it means nothing. It doesn't mean anything at all.

You can't do any effective communication decision making now based on what might or might not happen with Facebook in a few years. This is the type of article that gets nonprofits scared about investing any effort in social media: Why start if it's just going to be gone in a year? Or, alternately, deciding foolishly to give up email or print mail to devote more time to Facebook: Why not? It's Ma Bell of the 21st Century!

But, honestly, what else might change in a couple of years? Likely, stuff that you've never even considered will be diffferent. So all you can do technology-wise is look at what's useful now and what's likely to continue to be useful in a year from now if things continue in a typical direction. Cross your fingers, and prepare to handle changes as they come.

There's No Such Thing As a Technology Funder

By Laura Quinn, January 10, 2012

We get asked all the time, "My organization wants to do this really important/ cool/ necessary technology project -- where can I find a technology funder to give me a grant for it?"

Unfortunately, there's no such beast. I'm not aware of any funder that looks to fund technology projects specifically. (This probably saddens us as much, or more, than it does you, as pretty much every project we're trying to fund is a technology project).

Instead of looking for the mythical technology funder, look to those who support your cause, and talk to them about how the project will help you better fulfill your mission. For instance, consider:

Can you make the case to a current funder that the technology will help you do the things they already care about, either better or more effectively?
Do you have major donors who would consider funding a technology project? It's a nice, tangible thing to support, especially for donors out of the business world who generally understand just how important technology is.
Can you include it as a piece of a bigger proposal -- for instance, that your website redesign is part of a new advocacy project, as it will help you to reach out?
Can you interest local banks or corporate consulting firms? Local firms like to support local nonprofits, so they might be a source for small grants or volunteer experts.

Be creative and be persistant. Funding for technology isn't a lost cause, but seaching for an ideal "technology funder" is likely to lead you down the wrong path.

Follow Chris's Alaskan Adventures

By Laura Quinn, August 3, 2011

Chris Bernard, Idealware's Senior Editor, is on one heck of an Alaskan trip. In addition to his full time job at Idealware, he's writing a book (Chasing Alaska, Lyons Press, Spring 2013) about his own ancestor, Joe Bernard, who was an actual, honest-to-goodness arctic explorer, and the Alaska that Chris finds as he follows in Joe's footsteps. So yes, he's a pretty busy guy.

He's currently in Alaska, on, I believe stop two or three of about a twenty-stop trip. He's taking planes, boats, and driving overland, including going several places it's only possible to get to via float plane. He's working on a commercial fishing boat, walking trap lines with a hunter, going to a bunch of historical societies -- and as he goes, interviewing about fifty people.

So it should be an amazing three-week trip. Follow his adventures (on this trip, and as the book unfolds) on his blog, also called Chasing Alaska.

Waiting for Holograms

By Laura Quinn, August 1, 2011

A lot of people ask me what I see coming up next in the world of nonprofit technology. I admit it: I'm not a very good pundit, and I don't like making prognostications. So my routine answer is "holographic software." It's mostly a joke, but I also often follow it up to explain that the things that are likely to have the biggest impact are the things we can't even conceptualize today.

More concerningly, though, a number of nonprofits are trying to see the future in order to make today's decisions. In conducting trainings I get questions that are variations on this theme all the time. So for instance, "Is it worth investing in a donor management system now, when things are changing so fast?" "If we try to get started with mobile texting now, is it likely that people will have moved on to something else before we get up and running?"

I have several answers to this. First, things don't move THAT fast. Absolutely, things change, but markets generally change over the course of years rather than months or weeks. In fact, I expected myself that Idealware's reports and articles would go out of date faster -- but even an article that's three years old is generally still sound in terms of the general shape of the market and the core considerations.

Secondly, thinking this way is only going to drive you nuts. Unless you're talking about things on the very cutting edge maturing (like, say, integrating social media activity into a CRM system), I don't think you can predict what's likely to happen in the technology world accurately enough to make decisions based on it. In fact, I'd say that the more rapid changes are likely to be the most radical... and thus the ones that you're least likely to be able to predict.

In short, it's pointless to wait for the world of technology to stop changing in order to make your software decisions. You're simply not going to be able to select a system that will absolutely work for you ten years from now. All you can do is make the best decision you can based on the information you have now. And then to actually budget to be able to select a new system and move your data every four or five years, if that's necessary.

Or you can wait for holographic software to emerge. I hear it's going to change everything.

Want (old) grants management usage data?

By Laura Quinn, July 6, 2011

Way back in 2007, Idealware conducted a survey of foundation grants managers as a kickoff to our first Consumers Guide to Grants Management Software. As many as 311 grants managers provided information about their current software, rating both the perceived importance and the effectiveness of this software at handling a list of 30 grants management software attributes.

You can see our summary of the results online.

It's pretty old now, but we got a request for the raw data, so we thought we'd "free" the anonymized results. Want to see what folks had to say for yourself? The data, in Excel form, is online.

By the way, we're updating that Consumers Guide to Grants Management Software and will have a new report to release later this year. Stay tuned.

An Online Communications Rule of Thirds?

By Laura Quinn, May 31, 2011

Way back in 2008, I blogged about balancing your time and money between websites, email, and social media. I hypothesized a rule of thirds: that you should spend about a third of your energy and money on your website, a third on email communications, and a third on "online outreach". Note that I say "money and energy" -- whether we're talking about time or money or both depends on the organization. You could hire a consultant to do it all -- which would then cost a lot but take little time on your part-- or you could do it all in house -- which would cost less but take a lot of time.

Is this "rule of thirds" still valid? Stephen Blyth asked us this question on Facebook, provoking a lot of thought over here as to what we would recommend, and, in fact, what we do ourselves. The decision was that we do indeed think it's still a useful rule of thumb, at least in thinking through what you're actually doing, and what you want to prioritize.

To help you think it through, here's what it looks like here at Idealware:

Website Communication: The time we spend on our website varies a lot by what resources we have going out, but probably averages about one to two hours per week to update and add content (that doesn't include actually writing the articles, of course -- we spend way more time on those!). We look at website analytics as a separate process -- maybe about two hours per month there. We then plan on a small enhancement phase to create new features about a twice a year-- at maybe $1000 in consulting fees and maybe eight hours each time. The website platform itself we use is free and open source. So if we count our time over here as, say, $30/hour, that comes to about $5500 per year. Wow, it adds up, huh?
Broadcast Email: What about email? There, we average about two hours a week in figuring out our email schedule, actually creating and sending emails, managing our list, checking stats to see what worked, etc. Stephen in his question pointed out that organizations really ought to be doing testing and experimenting with email, as well as just sending them. I agree... but we're not doing that much. We really should be strateging different subject lines, trying a different format every once in while, and then tracking. So let's add in about 4 hours a month to do that. Plus the actual cost of our broadcast email tool -- about $150/month for our volume of emails. So that comes to about $6000, again counting our time at $30/hour.
Outline Outreach: And then there's online outreach. For us, that primiarly means posting and trying to build community through Facebook, Twitter, general listening, and experimenting -- we spend 4 to 5 hours a week on that, but no money. We're not doing anything with Google Ads, though I'd like to be (we're still waiting, hopefully, for a Google Grant). I'm not sure how to account for our blog in this -- we use it as much to provide content towards our mission as to actually do outreach. We probably spend about three hours a week on that, including staff posts -- let's say one of those hours goes to outreach. So that's about $8000, with our time at $30/hour.

So what does that come to? Roughly 30% of our online communication resources to our website and our email communication, and then about 40% to our social media and online outreach.

Not too far from a rule of thirds... What does it look like for you?

Encouraging Grantmakers to Spread Technology Information

By Laura Quinn, April 25, 2011

ZeroDivide recently released a great report with recommendations to strengthen the quality and quantity of technology-related grantmaking for social impact It's a really interesting look at what 41 funders and 13 technology service providers (including me!) had to say about technology grant-making, including a lot of concerns about how and why to do it.

We've been working with grantmakers for quite a while now -- we've had the privilege to be funded by a number actively support technology education and knowledge sharing, and we've also been working to increase funders' comfort level with providing support in this area (for instance, our free "Raising Your Network's Technology IQ" seminar walks through a number of free and low cost ways to provide technology help to a network of grantees).

There's some great stuff in the ZeroDivide report -- it echoes a number of the things we've been hearing ourselves. For instance,

A lot of funders are investing very little in any kind of technology for grantees
Funders are uncertain of how to move forward to do more -- in many cases, they feel like they don't understand tech enough to invest
Grantmakers are unsure how to strategically invest in and measure technology work
There's a great unmet demand for technology related service providers (like us!)

I'd add, though, one more, important thing that we've found at Idealware: funders don't understand the critical role that they could have in connecting nonprofits to useful resources. The nonprofit sector is very diffuse, but most organizations are funded by some foundation. In turn, the foundation sector is somewhat more connected (through national and state grant making organizations). Thus, if information passed to foundations would generally find its way to nonprofits, we could dramatically increase the amount of information and resources that nonprofits have at their disposal.

Take, for instance, the fact that TechSoup offers software at a steep discount. In our trainings, we find that generally somewhere around a third of the room has not heard of TechSoup. At all. Most foundations, however, are aware of TechSoup – many just haven’t thought about, or aren’t comfortable with, the idea of passing the information on to their grantees.

In fact, most funders, in our experience, don't pass on information to grantees. What’s more, the majority that we've talked to have no ongoing communication beyond grant logistics. They're uncomfortable recommending resources, feel that grantees might consider their recommendation to be an implication that using that resource is a requirement of the grant, and feel it isn't part of their role to support (or interfere in) "operational" things.

These are serious concerns, but in my mind, they allow some tactical challenges to override a huge strategic opportunity to strengthen the nonprofit sector. Something as simple as a monthly eNewsletter from a funder to their grantees could rounds up several resources, reports, or other things that the foundation thinks might be useful. This eNews would take little time, and provide a structure in which funders could easily pass on resources without implying that every grantee should immediately put them to use (the newsletter could even provide assurances that the links are informational only, and there won't be a grantee quiz later).

And if funders are uncomfortable finding or recommending useful resources, there are a number of trusted organizations that could provide a "resource of the month." Perhaps BoardSource, CompassPoint, or other support organizations would be willing to provide such a service -- I'd be really surprised if they weren't. Certainly we at Idealware would love to provide one or multiple links to technology resources a month -- just let us know!

QR codes for Nonprofits

By Laura Quinn, January 20, 2011

Seen one of these codes? It's called a QR code. It's a kind of bar code -- so just like a grocery checkout bar code, a computer can scan it to automatically receive information. In this case, though, it's coding a website address, and it can be scanned by smart phones. If you have a Droid, for instance, you can simply take a picture of this code with your camera, and it will automatically take you to the Idealware homepage on your phone. Nifty, huh? This will work with most smart phones, though for some of them you'll need to download an application to be able to read the code.

We're seeing more of these codes in public these days -- they're being used especially on billboards and in magazines, essentially taking the "click for more information" idea and turning it into "snap with your phone for more information." For instance, I can potentially take a picture of a QR code on a movie poster in the subway in order to go to a website that has more intriguing information about the movie.

Nonprofits are starting to use QR codes as well. There's some interesting possibilities -- not just in ads, but also for direct mail and to create virtual tours.

They're free to create-- do a google search on "QR codes" and you'll find half-a-dozen websites that will generate the code for you for free for a particular website address or piece of text. So the only cost associated is the printing, and if you're creating an ad or direct mail, you're likely printing anyway.

So for instance, you could add the image of code to your newsletter that would allow people to easily get to a webpage to sign up for your eNewsletter instead. Or a direct mail piece code could provide easily access to your online donation functionality. A museum could put a QR code next to each displayed piece to allow people to view much more detailed online than could practically be displayed.

Of course, your constituents will need to have a smart phone to use it, and will need to have some idea what the QR code is and what to do with it. It's still not particularly mainstream for that reason -- it's only going to reach a particular segment of the population. But as the population becomes more likely to have a smart phone and be savvy with it, it's likely to grow in usage.

How would you use a QR code with your organization?