Technology can help nonprofits manage rising operating costs when it removes a specific source of avoidable work—such as repeated data entry, manual reporting, or disconnected processes—and the full cost of the change is lower than the value it delivers. It is not an automatic cost-cutting measure: subscriptions, setup, migration, training, support, and staff time all count. Start by measuring one costly process, pilot a focused change, and scale only if the results justify it.
Why nonprofits are looking at technology and costs
Cost pressure and limited staff capacity make operational efficiency important, but survey findings describe respondents rather than every nonprofit. Sage’s 2025 Nonprofit Technology Impact Report says program participation and costs reached their highest levels in the report’s five-year survey history, and staffing had become the sector’s most pressing challenge. The report also found a gap between recognizing the value of data and using it: 85% of nonprofit respondents recognized the importance of metrics, while 9% considered their organizations highly data-driven.
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Those findings point to a practical opportunity: make routine work easier to complete and information easier to use. They do not show that buying software, adopting AI, or increasing a technology budget will automatically lower an individual organization’s costs.
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Which recurring tasks are good candidates for improvement?
Look for work that happens repeatedly, depends on manual handoffs, or requires staff to enter the same information in more than one place. In a 2026 survey by Momentive and Wakefield Research, 48% of executives at surveyed U.S. nonprofit and educational organizations cited repetitive administrative work as a top technology frustration; 42% cited manual data entry across platforms; and 41% cited difficulty accessing real-time data and reports. The survey covered 500 executives at organizations with at least $500,000 in annual revenue and was conducted May 1–14, 2026. These figures describe that survey’s respondents, not all nonprofits.
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- Repeated data entry: Map where donor, grant, finance, or program information is entered more than once. A suitable integration or a better-defined workflow may reduce duplication, but confirm that records remain accurate and usable.
- Recurring reports: Track the steps and staff hours needed to compile reports. A reporting change is useful only if the output is accurate, timely, and appropriate for the people who rely on it.
- Manual approvals and handoffs: Identify where requests wait for email follow-ups, paper forms, or unclear ownership. A workflow tool may help make responsibilities and status visible; the process itself may also need redesign.
- Disconnected records: If staff cannot readily find current grant, program, or operational information, assess whether better system connections or data practices would solve the problem. Do not assume that a new platform is necessary.
Start with the problem, not a product category. If a process is infrequent, already efficient, or unlikely to change, replacing its tools may cost more than leaving it alone.
How to calculate the full cost of a technology change
Compare the proposed change with the process as it currently works. Include cash expenses and the staff capacity needed to adopt and maintain it; a low subscription price can still conceal a costly implementation.
| Cost or value to assess | Questions to answer |
|---|---|
| Purchase or subscription | What is the price for the expected period of use, and what happens at renewal? |
| Setup and integration | Will configuration or connections to accounting, donor, grant, or program systems require paid help or staff time? |
| Migration and cleanup | What information must be moved, checked, deduplicated, or retained in the old system? |
| Training and adoption | Who needs training, how much time will it take, and how will staff learn the revised process? |
| Ongoing operation | Who will administer the tool, handle access and updates, support users, and review the workflow? |
| Security, privacy, and accessibility | Does the proposed service meet the organization’s requirements for sensitive information, accessible use, and appropriate controls? |
| Expected benefit | Which baseline measure should improve—staff hours, processing time, errors, delays, or access to needed information—and how will service quality be protected? |
Estimate the current process using a defined period and a consistent method. For example, record the staff hours spent preparing each recurring report over several cycles, including corrections and follow-up. Then estimate the corresponding effort during a pilot. Treat time freed up as capacity, not necessarily as cash savings: unless staffing or another expense changes, fewer hours on one task do not automatically reduce the budget.
ServiceNow’s 2024 nonprofit digital transformation report includes company economic modeling about potential mission funding and beneficiaries. Those modeled impacts are not measured savings for a particular organization or a forecast it should use as its own business case.
How to evaluate and pilot a change
- Map one process. Record who does each step, how often it occurs, how long it takes, what errors or delays arise, and which systems are involved.
- Set a baseline and a target. Choose a measure tied to the problem, such as hours per report, duplicate-entry steps, processing time, or time to retrieve grant information. Include a service-quality check so speed does not come at the expense of accuracy or constituent experience.
- Compare viable approaches. Assess workflow fit, integration, data export, accessibility, privacy and security controls, vendor support, training, migration, and total cost over the expected period of use. Include process changes or simpler improvements alongside new software where appropriate.
- Name an owner and scope the pilot. Assign someone responsible for coordination and ongoing administration. Define the users or workflow in scope, a realistic schedule, staff training, and a clear success measure before the trial begins.
- Review results and decide. Compare pilot results with the baseline, gather staff feedback, account for implementation time and costs, and decide whether to stop, adjust, or expand. If the pilot works, budget for renewals and ongoing administration and schedule reviews for unused features, overlapping licenses, and changing processes.
Implementation capacity is part of the cost calculation. The Chronicle of Philanthropy’s June 2025 account of a Clarion Research survey of more than 350 nonprofit leaders describes budget constraints, limited in-house expertise, and lack of time to vet and implement tools as common obstacles. In the same reporting, nearly 9 in 10 leaders said technology was vital to fundraising, while most said they spent less than 3% of their budgets on it. These are survey results, not a universal budget benchmark or a reason to spend more without a defined need.
Where budgets and automation fit
NTEN and Heller Consulting’s 2024 Nonprofit Digital Investments Report found that 54% of its survey respondents listed hardware and equipment among their technology-budget spending categories. That figure is the share of respondents reporting a category; it is not the share of nonprofit technology spending devoted to hardware, nor evidence that buying equipment reduces operating costs. Assess repair, reuse, and replacement timing against a specific operational need rather than treating new equipment as a default efficiency investment.
Automation, including AI-enabled features, may be worth testing when it addresses a defined task and staff can check its output. Estimate the time required for review, corrections, and oversight as well as any software or implementation expense. ServiceNow’s report describes digitally advanced organizations as emphasizing integrated workflows, automation, implementation plans, metrics, staff skills development, and resilient IT practices. These are useful evaluation dimensions from vendor-sponsored research, not proof that adopting any one practice will cause savings for every nonprofit.
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A cost-conscious technology decision begins with evidence about the organization’s own work. If a bounded pilot improves the chosen measure, protects service quality, and remains worthwhile after implementation and ongoing costs are counted, expansion may be justified. If the result is unclear, the workload shifts rather than shrinks, or staff cannot sustain the system, adjust or stop instead of scaling on the promise of projected savings.
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