May 6, 2013

Nonprofit Innovation and the Cloud

Recently NTEN posed an interesting question to us: Is there a connection between cloud technology and innovation in nonprofit organizations? There’s no doubt that many organizations are using cloud technologies in innovative ways. But, more specifically, what links might we find between the unique aspects of cloud technology, and the conditions and success factors for innovation? This article explores that question.

In the past two years my organization, MAP for Nonprofits, has focused intensely on innovative uses of technology in the nonprofit sector. In 2012, MAP and Idealware completed an exciting research project to pave the way for nonprofits to use technology for service innovation in a manner that advances their missions. By surveying 180 Minnesota nonprofits and doing in-depth interviews with 13 of them, we identified a “Framework for Innovation,” describing the conditions and success factors for innovation. The research report Unleashing Innovation: Using Everyday Technology to Improve Nonprofit Services presents details of our findings and is available for download. The research and the pilot program could not be happening at a better time, unfolding against a backdrop of cultural and technology changes. These include:

  • A general shift from enterprise-centered technology to consumer-centered technology, resulting in a more satisfying and empowering end-user experience. This is positive for innovation because it increases individuals’ expectations for how technology ought to serve them.
  • Moving away from command-and-control management, toward organic/network organizational structures, which means innovative ideas can originate from outside of leadership, and have the chance to catch on through networks.
  • Abandoning the 9-to-5, Monday to Friday work day for a blend of work, family, social and civic life throughout the day and the week, intricately related to anytime-, anywhere-access to work tools and information. This shift provides motivation to look for new applications of technology.
  • The emergence of cloud services, which both fuels the other changes and is fueled by them. (see table below)

Cloud Technology: A Boon for Innovation?

Here are a few aspects of cloud technology that bode well for innovation.

1. Remote Access

Sharing resources in the cloud opens your doors to the best talent, regardless of location, and facilitates collaboration and easy sharing of ideas inside and outside the organization. Inspiration can shine in, and innovative ideas can be disseminated broadly.

2. Elasticity and scalability By reducing the upfront investment in servers or software development, cloud technology makes experimenting less expensive and the stakes of failure are lower. You can scale up or down on the fly, keeping costs tied closely to usage, and providing for a gradual ramping up.
3. High quality at low cost Cheap yet sophisticated Software as a Service (SaaS) tools abound; for example self-publishing, infographics creation, and mapping tools. As for infrastructure, analysis for some of our nonprofit clients has shown that the five-year cost of ownership for a server network is still less than cloud services, in many cases, but the gap is narrowing. Cloud computing offers productivity gains, which can be difficult to measure in terms of dollars, but nonetheless are a compelling reason for many organizations to move to the cloud.

Lessons from our Innovation Research and Consulting Experience

Our innovation research suggested that some myth busting is in order. People often think of innovation as futuristic, cutting-edge technology, but we found that many nonprofits are innovating with straightforward technologies. For example, HOWA Family Center switched from email to text messaging as a more effective way to communicate with teen mentors.

We also found that innovation can be low cost. Many nonprofits successfully use existing technology to innovate in subtle ways, implementing solutions that are often both low-cost and effective. For example, Community Thread is using free social media for volunteer engagement. One big success was using Facebook to recruit roughly 1500 volunteers for relief efforts during a 2011 flood.

A key recommendation from our research was to consider starting small. Starting with a small project can, potentially, provide a straightforward success that will help your organization embrace the idea of innovation. This lesson was a painful one for one of our pilot participants. Through the pilot process of soliciting input from across the organization, they realized that they had rolled out a big technology change before the organization was fully ready. For their next technology implementation, they have taken a more iterative approach, testing it first on a smaller scale.

Cloud Technology in our Innovation Pilot

The proliferation of cloud services can leave a nonprofit professional looking like a deer in headlights, unsure how to select the right service and evaluate ROI. That’s why one of our goals for the pilot program is to help organizations identify actionable ideas for applying technology to address organizational needs – ideas which are prioritized based upon feasibility and return on investment.

So far, simply bringing people together and guiding them through the Framework for Innovation has yielded positive results. Not surprisingly, peer interaction has been one of the most valuable components of the program, providing new, outside perspectives and a support network for leaders seeking innovation. One of our pilot cohorts is comprised of smaller organizations that are all using cloud services for file sharing, as well as a variety of SaaS (Software as a Service) products for communication, outreach and fundraising. In their first group meeting, they did a lot of comparing notes and jotting down names of products. They are hungry for ideas and eager to experiment.

Barriers Still Exist

Funding plays a role in what sort of innovation happens. Some funders are savvy to the cloud trend, such as the Greater Twin Cities United Way which helped to underwrite the cost of migration to the cloud for a number of MAP’s clients. However, many funders are still reluctant to provide ongoing operating funds for IT. Knowing they are more likely to get funding for a capital investment (read: server, custom development), some nonprofits are choosing that route over the cloud, even if it isn’t the best fit for their needs, and even if it hinders innovation.

Privacy and security concerns are also holding people back from cloud services. For IT professionals used to controlling system, application, and data security, moving to the cloud means giving up many of the existing best security practices, simply because they are not available in the cloud environment. Even though there are always risks involved with cloud solutions—from outages to security leaks—cloud-based defenses can be more robust, scalable, redundant, and cost-effective than anything most nonprofits could put into place locally. HIPAA compliance remains unclear: most cloud solutions hesitate to state they are HIPAA compliant, but can be made so by tweaking their Service Level Agreement.

One practical thing we’ve learned is that an organization’s internet speed can be a huge help or hindrance to making the best use of cloud technology, especially streaming media such as webinars and webcasts that require a lot of bandwidth, and also web-based CRM and data management tools. Through our pilot, one organization discovered significant bandwidth problems, which they were then able to fix. This resulted in improved productivity as well as better trust and buy-in from employees related to IT changes.

So, is there a connection between cloud technology and innovation in nonprofit organizations? Our research and early results from our pilot program suggest that cloud technology, together with some of the cultural shifts which are closely related to it, are throwing the doors wide open to innovation. Cloud technology offers a multitude of new, low-cost, low-risk tools. It remains for nonprofit leaders to understand those tools, make smart connections between organization needs and technology, and overcome barriers to innovation. Collaboration with peers may be the secret sauce that pulls this recipe together.

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Karen Graham
Karen is a sought-after speaker, trainer, writer, and consultant with expertise in technology leadership and innovation, nonprofit software, and digital strategy. As Idealware's executive director she leads a team of researchers, presenters, and writers who create technology information resources designed to help nonprofit leaders put their vision into action. Her past experience includes leading the technology consulting services and nonprofit technology learning and networking programs at MAP for Nonprofits, helping to build the nonprofit CRM/database solution provider thedatabank from a startup to a thriving software company, and various roles in arts and human services organizations. She holds an MBA in Nonprofit Management from the University of St. Thomas.
Interest Categories: Cloud
Tags: Cloud, nonprofit innovation