What's Happening?
Nonprofits are increasingly struggling with outdated information technology systems, leading to a dependency on private technology vendors. This dependency, known as 'technical debt,' results in nonprofits spending a significant portion of their budgets just to catch up on necessary technology upgrades. Many nonprofits operate with thin margins, making this burden even more pronounced. The reliance on private vendors often leads to vendor lock-in, where nonprofits face high setup costs and obstacles to data transfers, forcing them to sign contracts with little leverage. This situation is exacerbated by the acquisition of nonprofit-focused technology firms by private equity, which can lead to less competition and higher costs. Additionally, proprietary platforms can cause mission drift, as nonprofits optimize for metrics that serve vendors rather than their communities.
Why It's Important?
The dependency on private technology vendors poses significant risks to the nonprofit sector. Financial costs are one aspect, but the more damaging effect is the potential for tech-driven mission drift. Nonprofits may find themselves prioritizing metrics that serve vendors over their original missions, which can undermine their ability to serve communities effectively. Furthermore, the reliance on proprietary platforms can lead to structural dependency, where nonprofits are vulnerable to changes in pricing or withdrawal of discounts. This situation can result in 'digital eviction,' where nonprofits lose access to essential tools. The broader impact is that nonprofits, which are built to help communities, may end up sending resources upstream to private vendors, rather than investing in their missions.
What's Next?
To address these challenges, nonprofits are encouraged to invest in in-house technical skills and open-source software. By developing cooperative technology and shared platforms, nonprofits can reduce dependency on private vendors and maintain control over their data and systems. Organizations like the Nonprofit Technology Enterprise Network (NTEN) offer training and advocacy for nonprofit data rights, framing technology as an equity issue. Nonprofits can also form coalitions to document the human costs of vendor dependency and advocate for public or philanthropic investment in shared infrastructure. By reclaiming control over technology, nonprofits can ensure that their missions remain focused on community empowerment rather than private gain.
Beyond the Headlines
The issue of technology dependency in nonprofits highlights broader ethical and political dimensions. Decisions about technology are not just operational but are deeply political, affecting ownership, accountability, and mission. Nonprofit leaders can challenge the efficiency rhetoric that often enables privatization by focusing on community-driven outcomes. By investing in nonprofit-led, open-source, and cooperative systems, the sector can preserve autonomy and accountability, ensuring that technology serves the public good rather than private interests.
