The Hidden Costs of Free Software

At a nonprofit technology conference I attended at the beginning of the summer there was a lot of hallway buzz about donor management systems. Everyone wanted to learn more about free or inexpensive software. Free software sounds like a good deal and many of these systems offer solid functionality; one or more of these systems may be the right choice for your organization.  But proceed with caution.  You may have to write checks for some or all of the following.

Data Integration

It is likely that at some point you will want to import to or export from your data management system.  You might need a one-time upload if there is data in a system (including Excel spreadsheets) that could be the starting point for your new database.  Thinking further ahead, you might need to upload a donation batch for the total dollars collected from an event to your accounting system. The details don’t need to be exported but it would be very convenient to have an automated sync and avoid entering the donations in both systems.  The donor management software might include integration, or connections, to standard accounting software packages such as QuickBooks but the vendor may charge for other types of exports or for the first-time import.  Be sure to ask what integration is included with the software and what has to be purchased separately.

Customization or Configuration

Purchased software usually allows for some amount of customization or configuration. At the most basic level you can change field names to reflect terms you use and that make sense to your organization.  But if you need to change more than the basics and believe you will want to add fields or change screen formats you may need to pay for that.  The vendor may offer customization services or you may be able to hire a local programming expert. And there will continue to be costs in order to maintain these customizations over time.  Find out what is easy to configure in the system and what changes may require more expertise than you have in-house. Ask the vendor about their fees for customization services and investigate consultants who may offer more competitive rates.

Training and Support

Software training and support options vary considerably by type and price.  You may be able to select training or support levels sometimes labelled as bronze/silver/gold.  These may range from free webinars to on-site training, and from support documentation to unlimited and immediate technical response. Most vendors provide training at the start of the project but we know there are staff changes so ask about training options and costs for new personnel.  Is training available on-line for free?  Will you have to pay for webinars?  Be sure to know how you will be charged when you call or e-mail for technical support. Is there a charge per incident or do you have a flat rate for a year?  Training and support may be included for the first year with purchase options for subsequent years.  Confirm your understanding of these costs to ensure accurate future budgets.      

Hardware and Infrastructure

Buying new equipment or upgrading what you have can be costly so check that the new software will work on the organization’s computers and mobile devices.  If the software is not cloud-based there may be additional costs for a faster server and you will probably need to pay someone who can install updates so you remain current with vendor’s improvements.

There are several free or inexpensive systems that can really improve your organization’s ability to capture, understand and use data.  Just be sure you understand the total cost of owning the system so you can avoid sticker shock. 

Ilona Sher is partnering with Armstrong McGuire to assist nonprofits with the selection and integration of new donor management software.  She brings 30 years of exceptional analytical, quantitative and team development experience to this work. Click here to request more information or to arrange for a preliminary meeting to discuss your needs. 


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